Understanding Parity Laws for Mental Health and Addiction Treatment
The high cost of treatment for mental health and substance abuse disorders has traditionally blocked many people from receiving treatment that can make their lives healthier and more productive. Even people with insurance coverage have frequently been denied care because until recently, mental health conditions have been covered differently than medical conditions.
Merriam-Webster defines parity as “the quality or state of being equal of equivalent.” This is a simple definition, but the meaning becomes muddy when it comes to deciphering the Mental Health Parity and Addiction Law (MPHAEA).
The Parity Law, which was approved in 2008 and became effective in 2010, applies to insurance providers and group health plans that provide coverage for both medical and surgical benefits and mental health/addiction. The act stipulates that benefits for mental health and substance abuse disorders must be no less favorable than medical or surgical benefits, including co-pays, deductibles, treatment limitations, and annual and lifetime dollar limits.
The Parity law places heavy emphasis on the words, “stipulates,” “restrictive,” and “predominant,” stating that health plans may not apply financial requirements or treatment limitations to mental health/substance abuse benefits in any classification that is more restrictive than the predominant financial requirements or treatment limitations imposed on substantially all of the medical or surgical benefits offered in that same classification.
This means, for example, that an insurance plan that allows an unlimited number of visits to a family physician can’t limit psychiatric visits to a set number of appointments.
A number of exceptions make the parity law even more complicated. For example, the requirements do not apply to small, private employers with no more than 50 employees or to non-federal governmental insurance plans with no more than 100 employees. There are other exceptions, including those pertaining to certain state and local health plans, Medicare, and most plans purchased outside the Health Insurance Marketplace.
It’s also important to understand that employers who do not already offer mental health or substance use coverage are not required to offer that coverage. Although MPHAEA is a federal law, some states require more coverage for mental health and substance abuse. In this case, state law trumps federal law. Insurance plans are required to make specific requirements available upon request. Reason for denials must also be provided. If you think your insurance provider has unfairly denied coverage for mental health or substance abuse treatment, contact your insurance provider’s customer service department. If you still have concerns, contact the Insurance Commissioner in your state for more information. If necessary, you can appeal your insurance company’s decision.