Explainer Link Copied 06.06.24

Why Is Mental Health Care Still So Damn Expensive?

If you feel like your health insurance hates you, that tracks. Here’s how the government is trying to fix that—and how to deal right now. ByMolly Longman

Shutterstock / Wondermind

A thing you’ve probably heard: Using health insurance to pay for therapy is hard. You also might’ve gotten wind that bigger mental health expenses, like in-patient treatment and substance misuse programs, are equally challenging to get covered—even when those services literally save lives. 

In case you haven’t noticed, those barriers mean it’s often way more expensive, time-consuming, and frustrating to treat a mental health issue than it is to treat a physical health concern—regardless of how good (or crappy) your insurance is.

Still, the U.S. government has been trying to get insurance companies to cover mental health like physical health, or what insurance people call “parity,” for decades. I know! In 2008, Congress passed the Mental Health Parity and Addiction Equity Act (MHPAEA)—a law that’s been updated a bunch of times since—to make it harder for insurance companies to cheap out on mental health benefits. 

And yet, between 2022 and 2023, 3 in 4 insured adults who sought mental health treatment hit a major coverage roadblock, like having their mental health care claims denied, needing pre-authorization for coverage, or not being able to find a provider who took their insurance, according to a Kaiser Family Foundation (KFF) survey. 

But then, late last year, the Biden administration announced plans to make bigger changes to the MHPAEA, cracking down on insurance companies that use loopholes to skimp on mental health benefits. You might’ve seen the headlines last fall, but here’s the recap: Lawmakers are asking insurers to collect data that proves they’re following the parity rules and making mental benefits easier to access. 

Sounds great in theory! But…how’s that going? Here, we’ll get into the plan to fix the existing law, why that’s (obviously) proving to be harder than it should be, and how to hack the coverage you have now. 

Why mental health coverage is still expensive, confusing, and terrible

Since the MHPAEA was passed and amended over the years, insurance plans with drastically different copays and deductibles for mental health care versus physical health care had to make changes or face lawsuits from people who were denied coverage as well as tax penalties from the treasury department (up to $100 per day per patient) and the department of labor.

While that made a difference, it wasn’t enough to force all health insurance companies to treat mental health deductibles, copays, and whatnot the same as physical ones. That’s why, 15 years later, seeing a therapist still isn’t as simple or affordable as, say, seeing a dermatologist for a $50 copay.

It’s also why the new rules are trying to address the harder-to-quantify, less-obvious issues that make health insurance so bad at taking care of mental health, says David Lloyd, chief policy officer at Inseparable, a nonprofit mental health advocacy organization that aims to make mental health care more accessible. .

Here’s what those proposed new rules would mean: 

• Insurance companies need to collect more data on “nonquantitative treatment limitations” (NQTLs), like how many members need prior authorizations to access care, how many go out of network for care, and how many in-network providers currently take new patients.
• Insurance companies have to use a specific “mathematical test” to calculate whether they’ve achieved ~parity~ or not. 
• Government agencies overseeing insurance laws can request this data at any point—and so can people enrolled in that insurance plan. 
• You can request the plan’s data and complain to regulators if you find something wrong, Lloyd adds.

“These new rules [are meant to] address the fundamental issue: Plans are putting barriers in place that result in less mental health and addiction care,” says Lloyd. And yet, because this shit is complicated, these new guidelines still leave a lot to be desired by mental health pros and insurance companies alike. Here are some of the biggest pain points.

There are still plenty of loopholes.

The new proposal is essentially telling insurance companies: OK, show us—with real-world numbers and data we’re now mandating you collect—what mental health services you’ve ~actually~ been covering and how accessible that coverage is to your average person. 

But, even if they get busted, there’s still wiggle room, according to the Mental Health Liaison Group (MHLG), made up of organizations like the American Psychiatric Association, Anxiety and Depression Association of America, and National Alliance on Mental Illness. 

The first one: Insurance companies can use confidential “independent professional medical or clinical standards” or their own clinical guidelines to deny coverage. Meaning, even if they’re breaking Biden’s new rules, they can claim their top-secret, proprietary standards justify it—and that would be reason enough. 

That lil loophole could undermine the new rules and maybe weaken the existing law, the liaison group wrote in their comments on Biden’s new requirements. 

Another exception: Insurance companies can say that they’re denying claims, limiting coverage, or breaking any of the parity rules to fight “fraud, waste, and abuse.” According to MHLG, this language is so broad that insurance companies can take advantage of it—and they already are. “We know that many health plans have sought to exploit claims of ‘fraud, waste, and abuse’ to deny or otherwise limit access to medically necessary care,” they write. 

Finally, those fines of $100 per day per policyholder (aka you and the people on your plan who are denied mental health coverage) seem intense, but there’s still a ton of bureaucratic red tape keeping the Department of Labor from issuing fines when insurance companies break the rules. And, even when they are fined, insurers seem to see these fines as “the cost of doing business,” says Lauren Finke, MPP, senior director of policy for  The Kennedy Forum, an organization advocating for better mental health care standards. It’s like a teacher telling you to do homework that only counts for only 1% of your grade—it's not worth your time, Finke says.

Insurance companies get to self-police.

Turns out, the existing mental health parity laws already mandate that insurance companies audit themselves and send in their compliance receipts “upon request.” In the new proposed rules, the lawmakers acknowledge that a lot of companies often don’t track parity data or analyze it the way they’re supposed to until the government asks for it. Plus, when they do hand it over, a lot of the time the data doesn’t track all the things regulators asked for. Basically, they’re half-assing parity oversight. 

It’s not clear how the new rules will fix that. Insurers still don’t have to turn over data until the regulators ask for it. And, if they’re failing, they have 45 days to explain why they’re making it harder to get mental health care coverage than physical. After that, the proposed rules say that the insurance company “may not” force insured folks to follow their policies that break the new rules, according to the 2023 proposal. The insurance company also has to fix those restrictions. 

Some things we still don’t know: How often will the government ask insurance companies for this info? Is it at random? If so, what happens if companies aren’t compliant and no one knows except the company? And what happens to your denied mental health care claims in the meantime? It’s easy to see why mental health orgs are skeptical about the enforcement of all this. 

The proposed rules also want everyone to have access to the data proving their provider is meeting parity standards—and that’s a good thing, says Kaye Pestaina, vice president at KFF and co-director of their program for patient and consumer protection. Of course, most of us don’t know what we should be looking for in the first place, Pestaina adds. 

What would really help consumers, Pestaina explains, is more publicly available, easy-to-read information about exactly how much different insurance plans will cover for mental health care and which plans actually have available therapists in your area. Also, um, those plans would need to exist, be affordable, and hopefully be subsidized by your employer…

Insurance companies and therapists blame each other for the lack of coverage. 

One of the most helpful parts of these new proposed rules is a bit that requires insurance companies to take “appropriate action” to create a balance of in-network physical health providers and mental health providers. Meaning, in theory, you’d have an equally easy time finding a therapist who takes your insurance as you would finding a dermatologist. 

That said, these new rules also include an out for insurance companies that don’t meet the in-network provider parity standard. Companies can claim that, despite their best efforts, there aren’t enough mental health pros in their area or there aren’t enough willing to join their plan. In other words, “Not our fault! We tried! Sorry!” When that’s the case, there are no consequences in this rule for insurance companies lacking available mental health pros, according to the proposed rules.

To be fair, the insurance companies have to prove they’re attempting to make their mental health care provider network as accessible as their physical health provider network once a year, says Lloyd. Of course, it’s not super clear what happens if companies’ non-compliance goes undetected.

You might be wondering why it would be hard to convince mental health pros to join an insurance network. We’re so glad you asked! The short answer: Getting reimbursed by insurance companies is a huge headache for mental health providers, which is why so many therapists don’t take insurance. 

JaNaè Taylor, PhD, psychotherapist and founder of Minding My Black Business, says, in her experience, insurance plans don’t always follow through on paying providers their portion of the service. “[They] are inconsistent and lowball us with their reimbursement rates,” she notes. A lot of the time that’s because insurance companies don’t recognize mental health care as a preventive, medically necessary measure, Dr. Taylor adds.

When insurance plans don’t pay their part, providers end up in the hole and you may get an unexpected bill, explains Pestaina from KFF. Since someone needs to take that financial hit, this makes for unhappy clients and therapists, she adds. It also means fewer therapists want to deal with insurance at all, Dr. Taylor says.

Juan Romero-Gaddi, MD, psychiatrist, therapist, and founder of Equal Mental Health, adds that there is indeed a provider shortage. Reimbursement issues and the administrative work needed to accept insurance means therapists often make more money by not taking insurance, explains Lloyd from Inseparable. Because the U.S. mental health care industry is famously low on providers, per KFF, that exacerbates the issue of uncovered mental health care, Lloyd adds.

But, hey, we’ll take what we can get when it comes to mental health parity.

Despite the significant loopholes, the hope is that these rules keep insurance companies honest about their mental health parity status and force them to fix existing problems. Eventually, that could mean fewer prior authorizations, more mental health providers who take your insurance, fewer surprise denials of coverage after you’ve already received a service, and (hopefully) less expensive mental health care in general, Lloyd says. 

It could take a while to see those effects though. The rules still aren’t finalized, and may not be till later this year. When they are, Pestaina says the rules aren’t enforceable until 2025. But who knows! Maybe plans will start auditing sooner to get ahead. It could happen!

How to navigate the situation we’ve got.

We’re here to say: Don’t give up! We asked experts for the best ways to manage the current system, so you can use your insurance to cover more of your mental health care costs right now.

Get a health savings account.

Some employee benefit programs include health savings accounts (HSA), which is a pre-tax account where you can save money to use on medical-related purchases like sunscreen, doctor’s appointments, and therapy, says Jessica B. Stern, PhD, a clinical psychologist and assistant professor at New York University Langone Health. Though the savings aren’t huge, having tax-free dollars to put toward mental health expenses is better than nothing. Obviously, the more money you make, the more you’ll save in taxes, but if you use the account it can’t hurt. Just make sure you spend it within the year, otherwise you’ll lose it to the government. 

Don’t wait to find care.

If you need a new provider, the first step is finding someone who takes your insurance and is actually taking new clients. In theory, you should be able to go through your insurance’s database, click on anyone who looks interesting, and try to book an appointment. In reality, those sites might be very out of date, meaning you might need to try other online therapist directories and do a lot of calling and cross-referencing between Google and your insurance company.  This process can be long, drawn out, and frustrating as hell. And if you’re really struggling with stress, anxiety, depression, burnout, or any mental health symptom that makes this process feel like torture, you likely won’t have the energy to get it done. So, if you can, start searching before you really need an assist.

Cross check your insurance database. 

You probably should start by, yes, checking out your insurance company’s database of providers. But it can also help to look at other online provider portals like ZocDoc or Psychology Today for more info on their specialities, availability, and insurance coverage. Scrolling through multiple sites to confirm the facts about one therapist is annoying, but in the long run it could be faster than calling to make an appointment and being told they’re booked up or not taking insurance or both. 

Get the codes.

Once you find an in-network mental health pro you like, take the extra step of asking them how they might bill your insurance, says Dr. Stern. You’re asking specifically for the “billing code,” says Dr. Stern, which will help you verify how your insurance company is going to treat that visit. For instance, your insurance might cover in-person therapy visits one way and teletherapy visits another—annoying! Or they might only cover 10 sessions of either. Knowing this ahead of time can potentially help you avoid a big bill down the line. 

Dr. Stern says you could try something like, "I'm interested in working with you for [therapy/medication management/assessment], but I just want to confirm my coverage of this service with my insurance company. Would you mind sharing the potential or likely billing codes you might use for our work together?”

Then, run those codes by your insurance company via their customer service line, Dr. Stern adds. If they’re all clear, great! If not, you can ask what the limitations are, what they do cover, and then ask them to send you an email with all this info in it so you can refer back. (Heads up: These details can change, so don’t assume this coverage will be solid indefinitely.)

Look into your out-of-network benefits.

Sometimes, you’ve gotta go outside your insurance plan. Whether it’s because you’ve gone over your insurance’s treatment allowance or found a provider who won’t budge on the insurance bit, you should know what it will cost you to get that care. 

First thing to figure out: if you have an out-of-network deductible and how much it is. If you have one of these (FYI: they’re usually higher than your in-network deductible), that means that your insurance will pick up some of the bill for out-of-network costs once you hit that predetermined number. Once you know that, calculate how much your mental health care is going to cost so you can do a little loud budgeting.

For some, that could look like this: Your out-of-network deductible is $5,000. Once you’ve paid that much on your own, your insurance kicks in and reimburses you for 70% of every out-of-network bill after that. Let’s say your therapist doesn’t take your insurance and charges $150 a session. That would mean you’d need to hit that $5,000 out-of-network deductible before you start paying $45 for those sessions instead. It’s not always that simple, so make sure you’ve got all the details on how to get reimbursed by your insurance company.