The Biden administration is cracking down on health insurers for not adhering to federal law, which mandates equal access to mental health care alongside other forms of medical care.
The administration has introduced new regulations designed to ensure compliance by insurance companies, and it’s warning of substantial fines if they fail to comply. However, insurers are maintaining their innocence and, with support from some major U.S. corporations, argue that the Biden administration’s plan might exacerbate an already challenging issue.
This conflict arises at a time when mental health care needs in America are at an all-time high due to a surge driven by the pandemic, which shows no signs of abating.
Neera Tanden, head of President Joe Biden’s domestic policy council, stated, “We always hope for collaboration, but the rule has sticks as well.” She expressed hope that insurers would change their behavior without the need for penalties but affirmed the administration’s commitment to fully enforcing the parity law.
These “sticks” include daily fines of $100 per policyholder if insurers do not close the purported loopholes they use to limit payments for mental health care. According to the administration, these tactics involve requiring doctors to seek insurers’ approval before delivering care, offering lower reimbursement rates for mental health providers, and deliberately restricting the number of in-network physicians available to patients.
In response, insurance companies argue that they are being unfairly scapegoated. They claim they are already making significant efforts to expand access to care, such as utilizing telehealth, expanding provider networks, and increasing payments to providers. They are also working on better integrating mental health into primary care. However, they highlight the severe shortage of qualified mental health care providers in the U.S., with almost half of the population living in areas with a shortage of mental health workers, according to the Kaiser Family Foundation.
The Biden administration cites a 2022 report to Congress from the Health and Human Services, Labor, and Treasury departments, revealing that none of the 156 insurance plans and issuers studied were in compliance with the 2008 law requiring them to assess their compliance.
The core issue, according to advocates of the Biden regulations, is that insurers are cutting down on mental health reimbursement to save costs. Senator Chris Murphy (D-Conn.) commented, “The insurers are cracking down on mental health reimbursement in order to save money.”
The mental health care needs of Americans reached alarming levels during the Covid-19 pandemic. Over a third of adults reported symptoms of anxiety or depression during the pandemic, and 90% of U.S. adults believe the nation is in a mental health crisis, according to the Kaiser Family Foundation. Suicide rates also saw a significant increase, the highest in decades.
However, access to mental health care has not kept pace with these needs. Estimates suggest that over half of adults with mental illnesses do not receive treatment. For conditions like opioid use disorder, only one in five adults received medication treatment in 2021.
Historically, the U.S. health care system treated mental and physical health care differently, and insurers did not typically cover mental health care until after World War II. The American Psychiatric Association’s Maureen Maguire emphasized that stigma played a significant role in discouraging individuals from seeking help for mental health issues.
Efforts to address this issue date back to President John F. Kennedy in 1961 and gained momentum in the 1990s at the state level. President Bill Clinton signed the Mental Health Parity Act in 1996, and President George W. Bush followed with the Mental Health Parity and Addiction Equity Act in 2008, which required insurers to cover mental health on par with physical health care.
The proposed regulations from the Biden administration, currently open for public comment until October 2, aim to ensure insurers analyze their coverage to guarantee equal access to mental health care based on outcomes. They would also address issues like “ghost networks,” where there are insufficient mental health providers in-network, forcing subscribers to go out of network and incur additional costs.
While the insurance industry acknowledges the need for equal access to mental health care, they argue that workforce shortages are the primary barrier to expanding access. They stress that they are already taking measures to address these challenges, such as increasing telehealth coverage and integrating mental health care with primary care.
The ERISA Industry Committee, representing large employers’ benefit interests, along with some major corporations, has joined insurers in requesting an extension of the comment period on the proposed rules. They express concerns that the rules could create burdens for providers, insurers, and patients, potentially hindering access to care unintentionally.
