Home Health The struggle to expand insurance coverage

The struggle to expand insurance coverage


In a 54-page report to Congress in January, three federal agencies describe how difficult it has been to get health insurance plans and issuers to follow a 14-year-old federal law aimed at eliminating discrimination in coverage of mental health care.

On April 27, the U.S. Department of Labor, Department of Health and Human Services and Department of the Treasury came together to enlist the public’s help in holding the insurance industry accountable. Top administrators announced new efforts to educate people about their rights under the Mental Health Parity and Addiction Equity Act of 2008.

The landmark law mandates mental health parity in insurance coverage, meaning that coverage of mental health disorders such as depression and schizophrenia cannot be more restrictive than what generally is available for medical conditions such as diabetes and heart disease.

The law applies to health plans and health insurance issuers, including most employer-provided health plans and individual plans purchased through state and federal health insurance exchanges. Self-insured, private employers with 50 or fewer employees are among the few exceptions.

Across the U.S., nearly 1 in 5 adults — 52.9 million people in 2020 — live with a mental illness, according to the National Institute of Mental Health, which estimates prevalence is even higher among adolescents. The coronavirus pandemic has exacerbated the situation, creating what President Joe Biden recently called “an unprecedented mental health crisis.”

“Communities of color, frontline workers, health care workers, and individuals with eating disorders have been disproportionately impacted, and the rate of depression across the country has more than tripled compared to rates in 2019,” Biden stated in a proclamation on April 29, in advance of National Mental Health Awareness Month in May.

While the goals of the mental health parity law seem straightforward, achieving them is complicated, partly because factors outside insurance companies’ and employers’ control can hinder progress.

For example, in some parts of the country, and in less densely populated areas in particular, there are not enough psychiatrists, therapists and other types of mental health professionals to meet the needs of local residents. And those shortages could worsen in the coming years, data from the National Center for Health Workforce Analysis, part of the U.S. Health Resources & Services Administration, show.

The center predicts a nationwide shortage of psychiatrists by 2030, because not enough clinicians are entering the field to replace those who will retire. Projections also point to a shortage of addiction counselors by 2030.

Another hurdle to achieving parity: Many mental health professionals do not accept insurance. For example, psychiatrists’ acceptance rates for all types of insurance were much lower in 2009-10 than for physicians in other specialties, finds a 2014 study published in JAMA Psychiatry.

The American Hospital Association lays much of the blame for the lack of parity on insurance companies. The advocacy organization, which represents nearly 5,000 hospitals, health care systems, networks and other health care providers, has urged Congress to take action to force compliance. Its recommendations include imposing financial penalties and giving the Department of Labor the authority to pursue third parties that violate the law when providing administrative services to health plans.

“More than a decade after the passage of a federal mental health and addiction parity law, hospitals and health systems still face numerous barriers in securing appropriate reimbursement from insurance companies, which continue to violate these laws and impose other administrative roadblocks that prevent patients from receiving needed care,” the hospital association asserts in a written statement submitted in February to a Congressional committee investigating improvements to mental health care.

Insurance officials have said they need more specific guidance in implementing the law — a point echoed by the departments of Labor, Health and Human Services and the Treasury in their report to Congress early this year.

The heads of those agencies note in the report that the law gives health plans and issuers “great latitude” in determining what constitutes a mental health benefit, which, in turn, “results in different standards for parity from plan to plan and state to state.”

“We have long advocated — and continue to do so — for the administration to provide more clarity around what constitutes compliance and better support to assist with compliance,” Kris Haltmeyer, vice president of policy analysis for the Blue Cross Blue Shield Association, told HealthPayerIntelligence, a media organization that covers issues affecting health payers, such as insurance companies.

The national push to improve insurance coverage of mental health care began decades ago. The Mental Health Parity and Addiction Equity Act of 2008 actually expands an older law, the Mental Health Parity Act of 1996. The earlier version of the law “required group health plans with fifty or more employees that offered mental health benefits to apply the same lifetime and annual dollar limits to mental health coverage as those applied to coverage for medical/surgical benefits,” scholars write in “A Political History of Federal Mental Health and Addiction Insurance Parity,” published in 2010 in The Milbank Quarterly, an academic journal.

“Research indicates, however, that health plans circumvented the law by tightening restrictions on the number of hospital days and outpatient visits for mental health services,” the authors write.

Many Americans might not be aware there is a mental health parity law. Only 4% of adults who participated in a survey commissioned by the American Psychological Association in 2014 reported knowing about the law. More than 1,000 people completed the online survey.

The federal government’s new public education efforts aim to boost awareness and help people recognize potential violations. They also offer detailed directions on how and where to report them, considering a multitude of state and federal agencies share enforcement responsibilities, depending on the type of health plan a person has.

To help journalists understand and report on mental health parity, we have gathered and summarized research and reports investigating the issue. It’s important to note these are just a sampling of the scholarly literature and other resources associated with the Mental Health Parity and Addiction Equity Act.

The peer-reviewed studies we highlight below focus on cost disparities — differences in what patients pay for mental health services as opposed to medical and surgical care. We will add new research as it is published.

For additional context, check out our roundups of research on student mental health and COVID-19, racial disparities in opioid addiction treatment and integrated health care.

Key reports and resources

Realizing Parity, Reducing Stigma, and Raising Awareness: Increasing Access to Mental Health and Substance Use Disorder Coverage
Report to Congress from U.S. Department of Labor Secretary Martin J. Walsh, Department of Health and Human Services Secretary Xavier Becerra and Department of the Treasury Secretary Janet L. Yellen, January 2022.

The Mental Health Parity and Addiction Equity Act of 2008 requires the U.S. Department of Labor every two years to submit reports to Congress on health plans’ and insurance issuers’ compliance with the law. In 2022, two other federal agencies involved in enforcing the law — the Department of Health and Human Services and Department of the Treasury — joined the Department of Labor as authors of the report. The newest report is more than twice as long as the biannual reports the labor department submitted in 2020 and 2018,

The 54-page document covers a lot of ground, but one of its main takeaways is this: Because many health plans and health insurance issuers are still not following the parity law, federal officials want more power to enforce it. Their role, historically, has been to offer guidance. However, “feedback from stakeholders makes it clear that compliance assistance alone is not sufficient, and a greater emphasis on proactive enforcement is required,” agency officials write.

They add that “additional tools that serve as a strong deterrent could greatly incentivize compliance and help individuals avoid having to challenge discriminatory practices in the first place. [The Employee Benefits Security Administration] believes that authority for [the Department of Labor] to assess civil monetary penalties for parity violations has the potential to greatly strengthen the protections of [the Mental Health Parity and Addiction Equity Act of 2008].”

Also new in this year’s report: A discussion of the federal Consolidated Appropriations Act, 2021, which, among other things, amends the parity law to require health plans and health insurance issuers to conduct analyses comparing the limitations they place on mental health and physical health benefits. (This FAQ document from the U.S. Department of Labor further explains those new rules.) Those analyses must be made available to the three federal agencies upon request.

State Parity Implementation Survey
Parity Track, 2022.

Parity Track, a national coalition of mental health advocacy groups and other health-related organizations, monitors the country’s progress toward mental health parity. Journalists can use the website’s interactive database to check on parity-related activities — new legislation and legal action, for example — in individual states and at the federal level. The website provides a variety of other resources, including a “parity glossary,” which explains common health care terms such as coinsurance, outpatient care and reason codes.

The project was founded in 2014 by the chief sponsor of the federal parity law, former Congressman Patrick J. Kennedy, who has spoken openly about his personal struggle with bipolar disorder and drug and alcohol abuse.

Addiction and Mental Health vs. Physical Health: Widening Disparities in Network Use and Provider Reimbursement
Stoddard Davenport, Travis J. “T.J.” Gray and Stephen P. Melek. Report from Milliman Inc., November 2019.

This report from the global consulting firm Milliman Inc. demonstrates disparities in people’s access to mental health and physical health care. It indicates patients see clinicians outside their health plan network for treatment of mental health and substance use disorders much more often than they do for medical care. The 140-page report, commissioned by the nonprofit Mental Health Treatment and Research Institute, also reveals substantial differences in reimbursement rates for care provided by mental health professionals and physical health professionals.

Milliman’s analysis relies largely on data collected from two national research databases: the IBM Watson MarketScan Commercial Claims and Encounters Database and the Milliman Consolidated Health Cost Guidelines Databases. Researchers examined health insurance claims from 37 million employees and their dependents covered by commercial preferred provider organization, or PPO, health plans from 2013 to 2017.

They learned that adults seeking treatment for substance use disorders in 2017 went to out-of-network providers 9.5 times more often than did people who went to physicians for primary care that year. In 11 states — Idaho, Iowa, Maine, Massachusetts, Minnesota, New Hampshire, North Carolina, Oregon, Tennessee, Vermont and Washington — reimbursement rates for primary care office visits were more than 50% higher than for office visits related to mental health care.

Cost disparities in treating physical and mental health

Cost-Sharing Disparities for Out-of-Network Care for Adults With Behavioral Health Conditions
Wendy Yi Xu, Chi Song, Yiting Li and Sheldon Michael Retchin. JAMA Network Open, 2019.

This study examines the financial burden associated with seeking mental health care from out-of-network clinicians and facilities in the U.S. People seeking mental health care often go to out-of-network providers because “access to timely care can still be challenging for patients in private health plans who have behavioral conditions, especially when narrow networks include an insufficient number of specialists,” researchers write.

They compared the out-of-pocket cost of using private health insurance to get mental health care with the out-of-pocket cost of getting treated for diabetes and congestive heart failure. They learned that adults with mental health conditions, alcohol use disorders and drug use disorders were much more likely to receive out-of-network care than were adults with diabetes or congestive heart failure.

Of those groups, individuals with congestive heart failure tended to pay the most for their care. However, individuals who received care for mental health conditions, alcohol use disorders and drug use disorders had higher out-of-network costs specifically. The paper explains those costs in detail.

The findings are based on an analysis of insurance claims data for the years 2012 to 2017, retrieved from the IBM Watson MarketScan Commercial Claims and Encounters Database. The study focuses on adults aged 18 to 64 years enrolled in employer-sponsored insurance plans. The study sample comprises 3.2 million adults with mental health conditions, 294,550 with alcohol use disorders, 321, 535 with drug use disorders, 178,701 with congestive heart failure and 1.4 million with diabetes.

“Steeper cost-sharing payments, such as higher deductibles and higher coinsurance rates, are typically required for care from [out-of-network] providers,” the researchers write. “Cost sharing for [out-of-network] care represents a substantial financial burden to patients with behavioral conditions, and it may be an important sign of network inadequacy that requires more scrutiny from policy makers.”

Insurance Barriers to Substance Use Disorder Treatment After Passage of Mental Health and Addiction Parity Laws and the Affordable Care Act: A Qualitative Analysis
Julia Dickson-Gomez; et al. Drug and Alcohol Dependence Reports, June 2022.

Researchers conducted in-depth interviews with 150 mental health professionals who work for substance abuse treatment programs in Connecticut, Kentucky and Wisconsin. The information they gathered offers insights into the hurdles patients face in obtaining personalized treatment and the reasons many mental health care providers do not accept insurance.

“Almost all providers reported that navigating insurance to pay for [substance use disorder] treatment was a confusing and time-consuming process, and what kind of insurance a patient had in large part determined what kind of treatment he or she could receive,” the researchers write. “Part of the reason that [substance use disorder] treatment is matched to patients’ insurance rather than to their needs is because there is a wide variation in what insurance covers among plans within and between states.”

For example, Medicaid plans in Kentucky and Connecticut did not cover methadone treatment at the start of the study period, which spans from 2018 to 2020, the researchers write. Wisconsin Medicaid did not cover residential treatment or medically supervised detoxification from opioids.

Medicaid programs and private insurance plans often do not cover treatments not considered medically necessary, providers said. A provider in Wisconsin explained why that is problematic.

“[T]he reason why a lot of people can’t stop using is when you stop using you go through withdrawal … And it’s awful, and painful, and uncomfortable,” the provider told researchers. “And you go present at a hospital, and a hospital is going to say, ‘Well we’re not going to admit you.’ If it’s opiate withdrawal, it’s not medically necessary to treat it because you will not die from it.”

The researchers write that it is tough to reach parity when mental health services have no obvious counterpart in physical health services. This “can lead to seemingly arbitrary decisions” about the rate at which insurance covers services such as “peer support,” which includes group therapy.

Providers also complained about the amount of work that goes into filing insurance claims.

“Many participants said that billing Medicaid was a full-time job and that claims were routinely denied and needed to be appealed, creating significant administrative burdens and hardship for [substance use disorder] treatment programs,” the researchers write, pointing out that providers face similar hurdles with private insurance.

“This sense of always having to fight to get paid can help fuel burnout and feelings of being stigmatized for treating a stigmatized disease,” the researchers add.

The Mental Health Parity and Addiction Equity Act Evaluation Study: Child and Adolescent Behavioral Health Service Expenditures and Utilization
Eryn Piper Block, Haiyong Xu, Francisca Azocar and Susan L. Ettner. Health Economics, December 2020.

Children gained greater access to specialized mental health services without an increase in out-of-pocket costs after the Mental Health Parity and Addiction Equity Act of 2008 took effect, this study suggests.

Researchers investigated mental health expenses and service for about 1 million children aged 4 to 17 years enrolled in health plans from large employers that contract with one health plan vendor for both medical and mental health benefits.

The researchers examined data for 2008 to 2013 extracted from four administrative databased provided by Optum, a subsidiary of UnitedHealth Group and one of the country’s largest Managed Behavioral Healthcare Organizations. The data show that mental health care costs rose after the parity law took effect because employees and their families sought more mental health care and insurance plans began paying for more treatment. There were “substantial increases in plan expenditures and utilization rates for all but the most intensive treatment types without a commensurate increase in patient [out-of-pocket] expenditures,” the researchers write.

Changes in utilization rates were primarily for less intensive treatment — for instance, medication management, individual psychotherapy and family psychotherapy. While the researchers find mixed results for more intensive treatment options, those results were not statistically significant.

The Journalist’s Resource is part of the Mental Health Parity Collaborative, a group of news organizations that are covering challenges and solutions to accessing mental health care in the U.S. The collaborators on this project include The Carter Center, The Center for Public Integrity, and newsrooms in Arizona, California, Georgia, Illinois, Pennsylvania, and Texas.