Why Do Insurance Companies Treat Mental Health Differently than Physical Health

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why do insurance companies treat mental health differently

When it comes to well-being, our mental health is as important as physical health. Unfortunately, health insurance marketplace companies have not always seen it that way. In the past and today, many health insurance companies provide better coverage for physical illness than they do for mental health disorders.

In 2008, a law passed called “the Paul Wellstone and Pete Domenici Mental Health and Addiction Equity Act (also known as federal parity law and mental health parity law) requires coverage of services for behavioral health, mental health, and substance abuse treatment and use disorders to be comparable to physical health coverage.

Yet, many people are not aware that such a law exists or how it affects them. However, a survey conducted in 2014 found that more than 90 percent of Americans were unfamiliar with this law.

This guide will help you understand why insurance companies treat mental health differently. Plus, you’ll also learn what you need to know about the mental health insurance coverage about the mental health parity law.

How and why do insurance companies treat mental health differently?

Below are the two main reasons for the said questions:

Inadequate Provider Network

Parity laws mean nothing without “network adequacy,” that is, whether a plan has the right number of in-network providers to meet the plan’s member needs in a geographic area. 

When there is an inadequate number of professionals with health insurance companies to provide mental health care in a given area, they discriminate against people needing that care. 

That network forces health plan and members to:

  • Wait for a long time before getting treatment

  • Travel long distances to see an in-network provider

  • See a mental health professional outside of their network at a high cost

Studies revealed that network adequacy for mental health treatment is a real issue. A report published in 2019 found that a behavioral health office visit is over five times more likely to be out-of-network than a primary care appointment. 

Another report published by NAMI also found that people face more difficulty finding in-network providers and insurance for mental health care facilities than general medical care.

Unreasonable criteria to qualify for coverage

In addition to inadequate mental health provider networks, many health plans and insurance companies also use restrictive standards to limit coverage for mental health care. It often includes criteria that plan members must meet to qualify for coverage or treatment. 

Such standards make it extremely difficult to get treatment covered unless a plan member is very ill.

What does federal parity law do?

This law requires insurance companies to treat mental health, behavioral health, and substance abuse disorder coverage equal to medical coverage. That means the best insurance companies must treat financial requirements equally. 

For example, an insurer doesn’t have the right to charge a $40 copay for office visits to a mental health professional if it only charges a $20 copay for most medical office visits.

Federal parity law also covers non-financial treatment limits. Before, limits on the number of mental health visits allowed in a year were common. This law has essentially eliminated such annual limits. However, it doesn’t prohibit the insurance company from implementing limits related to medical necessity.

Who should I talk to if I think my insurance company is violating the parity law?

If you have genuine concerns that your health benefits plan is not complying with parity law, ask your HR department for a summary of benefits to better understand your coverage. You can also contact your insurance company directly. Your HR department can give you all the information about your coverage and may put you in touch with a healthcare advocate who can then assist you in appealing.

If you don’t have a human resource department or your employer doesn’t provide your insurance, you can directly speak with the insurance company. If you got your insurance through an insurance exchange, you could get help from your state insurance commissioner.

If you still have concerns or wish to file a parity complaint, visit the U.S. Department of Health and Human Services, where you can find the appropriate agency.

5 Barriers to Mental Health Treatment and Access to Care

Financial Barriers to Mental Health Treatment

One of the most formidable barriers to mental health treatment is the financial burden associated with accessing services. Mental health care often requires frequent therapy sessions, medications, and possibly hospitalizations, all of which can be costly. 

Even in countries with established healthcare systems, mental health care might not be fully covered by an insurance plan, leaving individuals to shoulder the financial burden themselves. This financial strain can dissuade people from seeking help, exacerbating their conditions and perpetuating a cycle of untreated mental illnesses.

Lack of Mental Health Care Professionals and Services

The scarcity of mental health care professionals and services is another critical barrier to accessing treatment. In many regions, there is an acute shortage of trained mental health professionals such as psychologists, psychiatrists, and therapists. 

This shortage results in long waiting lists and limited availability of appointments, leaving individuals without timely care. 

Mental health services might be concentrated in urban areas, creating geographical disparities that hinder access for those in rural or underserved communities.

Limited Availability of Mental Health Education and Awareness

Lack of education and awareness about mental health issues compounds the problem. Many individuals do not have a clear understanding of mental health conditions, their symptoms, and the available treatments. 

This lack of knowledge can lead to delayed or misinformed decisions regarding seeking help. A comprehensive mental health education initiative is crucial to disseminate accurate information, reduce stigma, and promote early intervention for mental health needs.

Social Stigma of Mental Health Treatment and Conditions

Stigma remains one of the most pervasive barriers to mental health care access. 

Societal attitudes that equate mental illness with weakness or instability deter individuals from openly discussing their struggles and seeking treatment. This stigma is perpetuated by media portrayal and cultural norms, making it challenging for individuals to disclose their conditions and access the support they need. 

Addressing stigma requires a multifaceted approach that involves public campaigns, education, and health management programs and fostering empathetic and supportive communities.

Racial Barriers to Mental Health Care Access and Treatment

Racial and ethnic disparities in mental health care access are deeply concerning. Minority groups often face unique challenges, including cultural barriers, language barriers, and discrimination. 

These factors can lead to distrust of the healthcare system and prevent individuals from seeking care. Moreover, mental health care approaches may not be culturally sensitive or tailored to the specific needs of these communities, further alienating them from appropriate treatment options.

Final Thoughts 

Barriers to your health insurance plans and coverage for mental health treatment still exist. But plan members are fighting back. If you feel you have been unfairly denied coverage for mental health treatment by your insurance company, you are not alone. You can contact the resources mentioned above. They will help you appeal coverage denials.

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