The Biden administration is targeting health insurance companies for disregarding a federal law that mandates equal coverage for mental health care and other medical care.

The proposed regulations from the administration aim to ensure that insurance companies comply. They have also warned of significant penalties for non-compliance. However, insurers are denying any wrongdoing and, supported by major American companies, are arguing that the plan put forth by the Biden administration may exacerbate an already difficult issue.

The conflict arises as the demand for mental health care among Americans remains at record levels, due to a continuous increase caused by the pandemic.

“We strive for cooperation, but there are consequences in place,” stated Neera Tanden, the leader of President Joe Biden’s council for domestic policy, in an interview with POLITICO. “Our intention is for insurance companies to modify their actions without resorting to consequences, however, we will still vigorously enforce the law of parity.”

The sticks consist of penalties of $100 per day for each policyholder if insurance companies fail to eliminate tactics that the administration claims they are using to restrict their coverage for mental health treatment. These tactics include making doctors obtain approval from insurers before providing care, offering lower reimbursement rates for mental health providers, and actively attempting to decrease the number of in-network physicians accessible to patients.

Biden has been accused by insurance companies of unfairly blaming them for healthcare issues. The companies argue that they are already utilizing technology, such as telehealth, to improve access to care, expand their networks of providers, and increase payments to those providers. They are also striving to better incorporate mental health into primary care.

According to Craig Smith, a partner at law firm Hogan Lovells and former general counsel for Florida’s Agency for Health Care Administration, there is no easy solution to matching the number of mental health providers with physical health providers. Regulations and statutes may be put in place, but government oversight and enforcement cannot magically solve this challenge.

The main problem, according to insurance companies, is the shortage of qualified mental health professionals. Research from the health policy group KFF shows that almost half of the American population resides in an area with a scarcity of mental health workers.

However, the White House refers to a report sent to Congress in 2022 by the Health and Human Services, Labor, and Treasury departments. This report revealed that out of the 156 insurance plans and issuers examined, none were adhering to the regulations that mandate them to assess their adherence to the 2008 legislation.

According to supporters of the Biden rules, the issue is relatively straightforward.

Senator stated that the insurance companies are tightening their policies on mental health coverage as a cost-saving measure.Chris Murphy (D-Conn.).

their own struggles.

The outbreak of Covid-19 highlighted concerns surrounding mental health and substance abuse disorders, as fears about the virus and enforced isolation from government-imposed lockdowns worsened these conditions.

KFF reported that over 33% of adults experienced symptoms of anxiety or depression amidst the pandemic, while 90% of American adults believe that the country is facing a mental health crisis.

The latest data from the Centers for Disease Control and Prevention shows that suicide rates have increased significantly, reaching 14.1 per 100,000 individuals in 2021, which is the highest in decades.

However, there has been a delay in receiving access to healthcare.

The most recent information from HHS suggests that over half of adults with mental illness do not receive treatment. Treatment rates may be even lower for substance use disorders, such as opioid use disorder – only 1 in 5 U.S. adults received medication treatment for it in 2021, according to the latest data from the National Institute on Drug Abuse.

According to experts, stigma is a common factor in barriers to receiving treatment for mental health and substance use disorders, although the specific obstacles may differ depending on the condition.

In the past, the healthcare system in the United States had separate approaches to treating mental and physical health. Mental health care was not typically included in insurance coverage until after World War II. According to Colleen Barry, dean of Cornell University’s Brooks School of Public Policy, insurance coverage was initially divided and disconnected from the larger system.

Maureen Maguire, associate director of parity implementation and enforcement policy for the American Psychiatric Association, stated that mental health was often neglected in the realm of healthcare. It carried a stigma and individuals were hesitant to seek treatment. If they couldn’t access help, they were reluctant to admit it.

For many years, administrations have placed a high importance on enhancing access to healthcare.

In 1961, John F. Kennedy became the first president to make significant efforts towards achieving equality for mental health. He advocated for the health insurance provider for federal employees to provide equal coverage for mental health care as they did for other forms of care, as it had previously been limited.

According to Barry’s research, attempts to increase parity were primarily focused on the state level from the 1990s and before.

In 1996, former President Bill Clinton signed the Mental Health Parity Act which mandated that plans provide equal coverage for mental health, but only in regards to yearly or lifetime benefit limits.

In 2008, the Mental Health Parity and Addiction Equity Act was signed by then-President George W. Bush. Its main sponsor in the House, former Representative Patrick Kennedy (D-R.I.), drew upon his personal experiences with mental illness to persuade fellow lawmakers to back the act.

The legislation required that deductibles, co-pays, and treatment limitations for mental health care be equal to those for physical health care. Its passage was celebrated as a major victory.

After choosing to not run for another term in 2010, Kennedy, who is the youngest child of former Senator Ted Kennedy (D-Mass.), has dedicated himself to ensuring the effectiveness of his legislation.

“The ongoing battle over the years, which emphasizes the significance of these regulations, centers on discriminatory medical management practices implemented by payers,” he stated. “It is considerably more difficult to address the various methods in which insurance companies can restrict access.”

The latest suggested rules, by HHS and the Treasury and Labor agencies, are available for the public to provide feedback until October 2nd.

If this proposal is approved, insurers will be required to review their policies to guarantee that individuals have equal access to mental health treatment based on their results.

Companies must evaluate their response to doctors’ requests for authorizing treatments for mental illness, as opposed to physical illnesses. Additionally, they should conduct audits of their provider networks and review their reimbursement rates for out-of-network providers.

JoAnn Volk, co-director of the Center on Health Insurance Reforms at Georgetown University, stated that this is a task that the issuers and plans should have been carrying out themselves to guarantee compliance.

Biden’s proposal addresses a significant issue known as “ghost networks,” which refers to the insufficient number of mental health providers who accept insurance. This often results in subscribers having to go outside of their network and pay additional costs.

The regulation would additionally determine the circumstances in which health insurance policies cannot demand doctors to seek approval before prescribing medication or performing a procedure, or hinder patients from accessing mental health and substance abuse treatment.

Insurance companies may be subjected to penalties of $100 per day per individual for not providing equivalent coverage for mental health services.

However, implementing this may prove to be difficult and it is uncertain how strict the administration would enforce it. Past enforcement has primarily focused on cooperation rather than punishment.

Due to limited resources, the Department of Labor has not been able to effectively enforce current regulations. As a result, Murphy is advocating for new legislation to address this issue.

Insurers’ ally

Insurance companies acknowledge the importance of ensuring equal access to mental health services as compared to physical health services.

However, according to AHIP, the organization that lobbies for insurance companies, the situation is not as straightforward as Biden presents it. They argue that shortages in the workforce are the root cause of barriers to receiving care.

According to a statement from AHIP spokesperson Kristine Grow, access to mental health services has been difficult due to a shortage of clinicians. This has led health insurance providers to implement programs and strategies in order to expand networks and improve access.

The organization stated that their objectives involve expanding telehealth services and combining physical and mental health care. They also cite an increase in mental health care utilization since the implementation of the 2008 legislation as proof of its effectiveness.

The insurance companies have a valuable supporter in advocating for their position: the businesses that purchase insurance policies.

In the previous month, the ERISA Industry Committee, which advocates for the benefit interests of large employers and includes some of the largest corporations in America, teamed up with AHIP to request an extension of the comment period for the proposed regulations from administration officials.

The companies and their insurance providers cautioned that the regulations may impose excessive responsibilities on healthcare providers, insurers, and patients, potentially hindering access to treatment unintentionally.