When it comes to well-being, our mental health is as important as physical health. Unfortunately, insurance 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-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 do insurance companies treat mental health differently? Plus, you’ll also learn what you need to know about mental health 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 force plan 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 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 mental health care facilities than general medical care.
Unreasonable criteria to qualify for coverage
In addition to inadequate mental health provider networks, health 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 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 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 health care 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.
Barriers to health insurance 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.