Biden administration finalizes rule to strengthen mental health parity law

The Biden Administration said on Monday it had finalized a regulation to help ensure that the 175 million Americans with private health insurance have access to affordable mental health services.

The 2008 Mental Health Parity and Addiction Equity Act already requires insurers and corporate-backed health plans to provide access and payment structures for mental health care services on par with other medical services.

In practice, that is often not the case, with less than half of U.S. adults with mental illness able to access care in 2020, while nearly 70% of children cannot receive treatment, according to studies cited by the administration.

That is partly due to a lack of mental health providers being sufficiently covered by insurance plans, leading patients to pay high out-of-pocket costs or to give up on care.

"The rule targets this network adequacy problem and recognizes that low pay for mental health providers is a major cause of network inadequacy," said Dr. Jared Skillings, chief of professional practice at the American Psychological Association.

"While some insurance companies may claim network inadequacy is primarily due to a workforce shortage. We disagree."

The final rule, proposed last summer, is aimed at closing the gaps by requiring health insurers to evaluate which mental health providers' services are covered by their plans, how much those providers are paid, as well as on how often they require or deny prior authorizations for coverage.

Where needed, such requirements may push health plans to add mental health providers to networks, according to a senior administration official. Most of the new regulation will take effect in 2026.

Patients enrolled in private health plans paid an average $1,500 per year in out-of-pocket costs for mental health care, White House domestic policy adviser Neera Tanden said in a briefing.

Often that is because they seek coverage from out-of-network providers, she said.

"It shouldn't be harder for you to find a provider that can treat your eating disorder than it is to find a provider who can treat your ulcer," said Lisa Gomez, Assistant Secretary at the U.S. Department of Labor.

The Department of Labor regulates corporate-sponsored health plans under the 1974 Employee Retirement Income Security Act, or ERISA.

The ERISA Industry Committee, a trade council representing U.S. employers sponsoring large health plans, in October submitted comments to the Department of Labor, arguing that the rule would create an additional cost burden for employer-sponsored health plans and increase healthcare costs for enrollees.

In a statement on Monday, the committee said the potential impact of the change is concerning and goes far beyond what Congress intended in its laws.

"We will consider all possibilities to prevent further harm to employers offering behavioral health benefits, and the employees and families who count on them, up to and including litigation," Melissa Bartlett, senior vice president of health policy for the committee, said in a statement.