Biden Administration Issues Final Rule for Mental Health Parity

As part of a final rule from President Joseph R. Biden to strengthen the Mental Health Parity and Addiction Equity Act (MHPAEA), health plans cannot use prior authorization or other medical management tools for mental health and substance abuse that are stricter than those used for medical benefits.

Additionally, health plans also have to use similar factors in setting out-of-network payment rates for mental health and substance abuse providers as they do for medical providers.

“Mental health care is healthcare. But for far too many Americans, critical care and treatments are out of reach,” Biden said in a statement. "Today, my Administration is taking action to address our nation’s mental health crisis by ensuring mental health coverage will be covered at the same level as other health care for Americans.”

In 2020, Congress made changes to MHPAEA, which was originally enacted in 2008, that required health plans to conduct comparative analyses to make sure that they are not making it harder for enrollees to access mental health and substance use benefits. Plans also required to evaluate their provider networks, how much they pay out-of-network providers, and how often they require and deny prior authorizations.

The rule also closes a loophole that had exempted non-federal government health plans from compliance. Now, 200 additional health plans with a total of 120,000 consumers, have to comply with MHPAEA.

Three-quarters of Americans think mental health issues are treated worse than physical health issues in the United States, according to a survey from West Health and Gallup that was released in May 2024. This survey also asked respondents to evaluate how well the healthcare system deals with mental health conditions. Only 1% of U.S. adults grade its ability to address mental health issues as an A, 8% as a B, and 27% as a C. The remaining majority, 57%, grade it as a D or F. In the Gallup survey, respondents said affordability (52%) and difficulty in finding a provider (42%) were the top two barriers to obtaining treatment.

A survey from KFF and released in August 2024 found the share of adults saying they received mental health counseling in the past year increased from 10% in 2019 to 13% in 2022. Additionally, the share of adults reporting they took prescription medication for mental health conditions increased from 16% to 19% during the same period. The share of younger people who received care has increased 45%.

But many patients end up going outside their insurer’s network to access care. Patients went out-of-network 3.5 times more often to see a behavioral health clinician than a medical/surgical clinician, 8.9 times more often to see a psychiatrist, 10.6 times more often to see a psychologist, finds a recent survey by RTI International.

“These numbers demonstrate that in-network care is insufficient, and forcing patients out of network is more expensive for them, and shifts the burden for finding quality care and qualified providers to patients and families. This is wrong and adds a further burden to individuals and families who are already challenged by the need for this care,” according to a statement from The Kennedy Forum, an organization co-founded by former Congressman Patrick J. Kennedy to address mental health and substance abuse disorders.

The United States will spend an estimated $477.5 billion in avoidable and unnecessary expenses related to mental health inequities in 2024, according to a May 2024 study by the Deloitte Health Equity Institute and the School of Global Health at Meharry Medical College. This analysis predicts that there could be $14 trillion in excess mental health spending by 2040. This analysis looked at spending related to mental health issues, including productivity-related losses stemming from absenteeism, emergency room use, chronic health conditions related to mental health and premature death.

“Parity supports tens of millions of Americans who seek help each year, strengthening our families, communities, workforce, and economy. I’m so grateful to the Biden-Harris Administration for this Parity Rule, so that individuals and families can get better access to mental health and substance use disorder care,” Patrick J. Kennedy said in a statement.