Biden Administration Finalizes Mental Health Regulation

By Amina Niasse

NEW YORK (Reuters) – The Biden Administration announced the finalization of regulations ensuring access to affordable mental health services for 175 million Americans with private health insurance.

The 2008 Mental Health Parity and Addiction Equity Act mandates that insurers and corporate-backed health plans provide mental health care on par with other medical services. However, less than half of U.S. adults with mental illness accessed care in 2020, and nearly 70% of children lacked treatment, as noted in studies cited by the administration.

This shortfall stems from insufficient coverage of mental health providers by insurance plans, leading to high out-of-pocket costs or abandonment of care. The final rule, proposed last summer, aims to close these gaps by requiring health insurers to evaluate which mental health provider services are covered, payment rates, and the frequency of required or denied prior authorizations for coverage.

If necessary, these regulations could incentivize health plans to incorporate more mental health providers into their networks, according to a senior administration official. The new regulations will take effect in 2026.

Patients with private health plans typically paid an average of $1,500 annually out-of-pocket for mental health care, which is twice the cost for those without mental health issues, according to White House Domestic Policy Advisor Neera Tanden. This discrepancy is often due to patients seeking out-of-network providers.

Lisa Gomez, Assistant Secretary at the U.S. Department of Labor, remarked, “It shouldn’t be harder for you to find a provider that can treat your eating disorder than it is to find a provider who can treat your ulcer.” The Department of Labor oversees corporate-sponsored health plans under the 1974 Employee Retirement Income Security Act (ERISA).

The ERISA Industry Committee, representing U.S. employers sponsoring large health plans, submitted comments to the Department of Labor in October, asserting that the rule could increase costs for employer-sponsored health plans and raise healthcare expenses for enrollees.