Biden admin to require mental health coverage parity

The Biden administration is finalizing a sweeping expansion of regulations that require insurers to cover mental health and addiction care on the same terms as other care.

Administration officials said insurers have flouted a 2008 law requiring so-called mental health parity — and are expanding the rules, with potential fines for violators. However, the administration’s decision is expected to draw legal challenges from the industry.

“This final rule will stop the industry evasion that has led millions of people to pay for care even when they have insurance,” said Neera Tanden, head of President Joe Biden’s Domestic Policy Council, on a call with reporters ahead of Monday’s announcement. “No one should have to drain their savings or go into debt to get help for themselves or their loved ones. President Biden and the vice president believe mental health is health.”

The move is likely to impact millions of Americans and comes as the nation faces a worsening mental health crisis. Most people with substance use disorder and mental health conditions, for instance, don’t get treatment, according to many estimates.

The new rules, some of which will go into effect next year, also give Vice President Kamala Harris a new administration measure to tout on the campaign trail, as expanding access to mental health care is broadly popular.

Other parts of the regulations — from HHS and the Treasury and Labor departments — that require more work will go into effect when insurance plans renew in 2026, senior administration officials said.

While the full regulations haven’t been released, senior administration officials said they are largely in line with what the White House proposed last year.

Officials said the rules reinforce that insurers can't use tools like prior authorization and standards determining out-of-network payment rates for mental health that are more restrictive than for other types of care.

They said the regulations would also mandate that insurers address material differences in access to care for mental health and substance use disorder care. The White House has pointed to a 2022 report to Congress from HHS, Labor and Treasury that found that not one of the 156 insurance plans and issuers studied followed requirements to measure their compliance with the 2008 law.

Tanden previously told POLITICO that while the administration hopes for a collaborative approach to enforcement “without the sticks,” it will “fully enforce the parity law.”

That will likely face significant backlash from insurers, who have argued that they are being unfairly targeted.

AHIP, the lobbying group for insurers, has said that workforce shortages are the main reason for barriers to such care. Other insurers, like the Blue Cross Blue Shield Association, have argued the regulations could have unintended consequences, including putting patient safety at risk by potentially forcing plans to accept lower-quality providers. BCBSA called for a more “comprehensive approach” that would address workforce shortages, licensing and other issues.

Some have argued employers will reduce their mental health coverage due to the expanded requirements and potential associated costs.

The regulations, which are expected to face legal challenges, could be vulnerable because the Supreme Court this year overturned the so-called Chevron doctrine. That legal framework held that when statutes are unclear and a federal agency regulates based on a “reasonable” reading of them, judges should uphold the regulation.

Senior administration officials said they are confident that they have written regulations that are consistent with applicable law.