On Friday, the Obama administration will issue long-awaited final rules requiring all private American insurance plans — in the individual, group, and employer markets — to cover mental health treatments on equal footing with more traditional physical medical care. The new rules are the final step in implementing the 2008 Wellstone-Domenici Mental Health Parity and Addiction Equity Act and add to Affordable Care Act requirements that will extend mental health benefits to millions of Americans for the first time, making the regulations one of the single biggest expansions of mental health coverage in American history.
U.S. mental health and addiction treatment services are prohibitively expensive. In fact, over half of the 28.1 million Americans with mental illnesses who didn’t pursue treatment in 2011 said that high costs were their primary barrier to care. A big part of the reason that out-of-pocket costs for mental health care are so high is that private insurance companies offer very low reimbursement rates for those services, leading many psychiatrists to simply refuse private insurance and passing costs onto consumers.
The Mental Health Parity Act was meant in large part to address that disparity by making insurers cover mental health treatment as they would other types of medical care. But as advocates have pointed out, regulatory holes in the law have made its implementation nearly impossible. The new rules announced on Friday will finally address those gaps.
“This is kind of the final word on parity,” said one administration official on a conference call with reporters.
According to the New York Times, the rule will prohibit all insurance policies from charging co-payments and deductibles for mental health benefits in a more restrictive way than they do for surgical and other medical care. It will also stop insurers from placing more prohibitive caps on the number of times a patient with a mental illness can visit a doctor’s office, or the number of days they can stay in a hospital, than they do for other types of care.
The regulations will further define how parity rules must be applied to outpatient and residential mental health services — particularly important for addiction and rehabilitative care. For instance, an insurer cannot limit a recovering addict’s rehab facility options to a narrow geographic location if it doesn’t already place similar restrictions on other types of medical care under the new rules.
Obama administration officials also told reporters that the regulations are the final item on the list of 23 executive actions that the president said he would take in order to curb gun violence after last year’s tragic mass shooting at a Connecticut elementary school. The perpetrator of that crime, Adam Lanza, had a history of mental illness.
Health and Human Services Secretary Kathleen Sebelius is slated to announce the new rules at a mental health conference in Atlanta, Georgia later Friday, where she will be accompanied by former First Lady Rosalynn Carter.