Mental Health Coverage Still Lacking in US Insurance Benefits

Julie Lawson had lost 60% of her body weight and was eating about one hundred calories a day when she was rejected for anorexia treatment coverage.

Although she had been struggling with her eating disorder for years, her private insurance plan did not cover a much needed trip to the psychiatric unit. In 2017, Lawson stood at 5’7” and weighed 100 pounds. It was just 10 lbs shy of what was considered a medical necessity for treatment.

“I remember thinking that I was going to die,” the now thirty-five-year-old woman recalled.

Eventually, Lawson was able to switch to a plan that paid for her treatment. But even getting that coverage approved was an uphill battle.

Many US citizens struggle to find treatment for mental health disorders, as Lawson did. This is in spite of two federal laws that were designed to bring some kind of equality of coverage between mental and physical health coverage.

The first is known as the Mental Health Parity and Addiction Equity Act passed in 2008. This required large group health plans to bridge that gap in coverage between physical and mental health. In 2010, the Affordable Care Act brought that mandate to small group and individual health plans. The idea was to hold these companies accountable for covering mental health treatment at the same level of physical health treatment.

The laws have reached some level of success, but are still a ways from achieving parity. Insurers can no longer charge higher copays or deductibles for mental health treatment. They are also barred from setting annual or lifetime limits for mental healthcare. But patients still say that insurance companies are more critical of mental health claims than physical health claims.

“They do this by creating incredibly restrictive standards for medical necessity,” says Mr. Bendat, a lawyer who is leading a class action lawsuit against UnitedHealthcare for this very problem.

Gaps in Hospital Coverage are Getting Worse

The Congressional Budget Office reported in February that private companies are paying 13-14% less for mental health care than Medicare does. That is in addition to the higher out-of-pocket spending on inpatient mental health care, which grew thirteen times faster than all inpatient care combined.

Only half of the nearly eight million children diagnosed with anxiety, ADHD, or depression actually receive treatment. Less than 20% of people with addiction disorder are treated, and nearly 60% of people with mental illness get no treatment or meds at all.

Not Addressing the Problem

The CEO of Austen Riggs Center, a psychiatric hospital with inpatient care programs, says that insurers are not looking at the problem in a holistic sense. Insurers are willing to address crisis symptoms that come with mental health conditions, but not the underlying illnesses that drive those symptoms. So it’s a recipe for failure.

Insurance companies are putting the onus back on treatment centers. They claim that standards are transparent and it is up to the patients and centers themselves to establish medical necessity. “Providers upset about a decision know these guidelines. It’s not pleasant, but it’s the only tool that exists to keep costs under control,” says a claims review specialist who works for Aetna.