Federal government tries again to ensure insurers pay for mental health care

Rule will take effect 60 days after announcement

The Biden administration announced in early September 2024 the finalization of a significant new regulation aimed at ensuring that health insurers cover and pay for mental health care on equal footing with physical health conditions.

The move is part of a broader federal effort to address long-standing issues of inadequate mental health coverage for millions of Americans, despite existing laws that mandate parity – or equality – between mental and physical health services.

The regulation, first proposed last year by the Departments of Health and Human Services, Labor, and Treasury, is designed to close gaps in mental health care coverage. The lack of regulation has left many people with conditions such as anxiety, bipolar disorder, depression, and addiction struggling to access affordable care.

Lisa Gomez, assistant secretary for employee benefits security at the U.S. Department of Labor, emphasized the importance of the new rules during a press conference.

“It’s simple: It shouldn’t be harder for you to get care when you feel depressed than getting care when you have back pain,” Gomez 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 that can treat your ulcer.”

The updated regulation compels insurers to act on studies they were already required to conduct, ensuring they provide the same level of coverage for mental health conditions as they do for other medical issues.

It also prohibits the use of more restrictive prior authorization practices for mental health care and addresses loopholes that previously allowed state and local government-sponsored plans to skirt the rules.

However, the new regulation does not introduce new enforcement measures. When pressed on how the administration would ensure compliance, officials suggested that competitive pressures within the insurance market would encourage companies to offer more comprehensive behavioral health benefits. These pressures have historically not worked to change the behavior of insurers.

Efforts to enforce mental health parity laws have a long history. Congress first passed the Mental Health Parity Act in 1996, with major updates in 2008 and 2020. Despite these measures, some insurers still do not fully comply with the law.

As Gomez pointed out, “People living with mental health and substance use disorders continue to face greater barriers when seeking benefits for those conditions and disorders under their plan and coverage than when seeking benefits for medical and surgical conditions. That’s not fair, it’s not right, and it’s against the law.”

The Biden administration’s rules have sparked some controversy. While there is general bipartisan support for improving mental health parity, some Republicans argue the regulation overreaches.

Rep. Virginia Foxx (R-N.C.), chair of the House Committee on Education and Labor, criticized the move as burdensome and ineffective.

“For over a year, we’ve been telling the Biden-Harris administration that these rules will not work,” Foxx said. “They are too vague and burdensome; they overregulate instead of allowing health plans to build robust networks; and they will increase premiums for employees already facing high health care costs.

Despite the pushback, the Biden administration views the new rule as part of a broader strategy to improve access to mental health care.

ice President Kamala Harris framed the regulation as part of a comprehensive effort to transform mental health care in the U.S. “President Biden and I are committed to ensuring that every person in our country has the mental health care they need to thrive,” Harris said.

“Today, we are building on this lifesaving and life-changing work by announcing the finalization of a historic rule that will expand mental health care across our nation so more of our loved ones, neighbors, coworkers, and classmates receive the care they deserve.”

The finalized rule will take effect at least 60 days after its official announcement.