Biden administration finalizes rule raising mental health coverage standards for private plans

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Mental Health Coverage Gets a Major Boost

The Biden administration has finalized a regulation aimed at enhancing mental health parity, ensuring that mental health care coverage for 175 million Americans with private health insurance matches the standards of physical health care. This move strengthens the Mental Health Parity and Addiction Equity Act (MHPAEA), which has been in place for almost 16 years but has often been disregarded by health insurers.

A Needed Reform

For too long, Americans have faced significant obstacles in accessing mental health and substance use disorder treatments. Despite the law mandating parity, health insurers have frequently created barriers, such as restrictive prior authorizations and narrower networks, making these essential services harder to obtain. The new regulation addresses these issues by implementing several key requirements.

Improving Access and Reducing Costs

Enhanced Coverage The rule mandates that mental health and substance use disorder services within private insurance plans must be covered at a level equivalent to physical health benefits. This includes integrating additional mental health and substance use professionals into provider networks and streamlining administrative processes for providers to deliver care.

No Loopholes The regulation closes a loophole that previously exempted non-federal governmental health plans, such as those offered to state and local government employees. This adjustment compels more than 200 additional health plans to comply with MHPAEA, providing critical protections to 120,000 consumers.

Freeing Up Providers Health plans must evaluate their provider networks, reimbursement rates for out-of-network services, and the frequency of prior authorization requirements and approvals under current plans. The outcomes of these evaluations will show where plans are failing to meet the law’s requirements and where changes are needed.

Eliminating Red Tape The rule prohibits health plans from using more restrictive prior authorization, or other medical management techniques, or narrower networks to make it harder for people to access mental health and substance use disorder benefits than their medical benefits. It also requires health plans to use similar factors in setting out-of-network payment rates for mental health and substance use disorder providers as they do for medical providers.

Breaking Down Barriers

The new regulation is a significant step towards ensuring that mental health care is treated equally to other health care services. President Joe Biden emphasized that there is no justification for treating a broken arm differently than a mental health issue. Vice President Kamala Harris, who has long been committed to improving mental health care access, highlighted the historical investment in youth mental health and the transformative impact of this rule.

Implementation and Compliance

The enforcement of the rule will be the responsibility of the Departments of Labor, Treasury, and Health and Human Services. These departments will aid plans in achieving compliance, noting that some provisions will not come into effect until January 2026. The rule clarifies insurers' responsibilities and ensures that mental health care is health care, period.

Implications and Challenges

While the rule is expected to significantly expand access and lower costs for mental health and substance use disorder treatments, some concerns have been raised by employer associations. The ERISA Industry Committee expressed concerns that the changes might be so burdensome that some employers may be forced to reevaluate the type and extent of their plan coverage. The Association for Health Insurance Plans (AHIP) warned that the proposed changes might lead to unintended consequences affecting the availability of mental and substance use disorder treatment.

Conclusion

The Biden administration’s final rule is a milestone in the ongoing efforts to ensure equal access to mental health care. By closing loopholes, enhancing coverage, and streamlining processes, this regulation aims to dismantle barriers that have long hindered Americans from receiving the care they need. As President Biden states, “Mental health care is health care. There is no reason that breaking your arm should be treated differently than having a mental health condition.”

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