MHPAEA, or Mental Health Parity and Addiction Equity Act of 2008 is a comparatively recent landmark law in the United States guaranteeing that a mental health condition would be covered and taken just as much as any other physical illness under an individual’s health insurance plan. Before MHPAEA, substance use and mental health disorder services were substantially more limited when health insurance was offered than they were with medical and surgical services. Mental health and addiction treatments were deterred for many who needed care by the fact that insurers often imposed more restrictive and higher cost limits. To remedy these inequities and create a more equitable and fair healthcare system, the MHPAEA was created. The act seeks to decrease stigma, open up opportunities to provide the care millions of Americans require due to substance use disorders and mental health illnesses, and contribute also to their overall well-being, by requiring parity. The enactment of the MHPAEA is a crucial step towards achieving equity in healthcare. By recognizing mental health and substance use disorders on par with physical illnesses, the Act challenges the deep-rooted stigma that has long hindered access to necessary care.
Behind the enforcement of this Act there existed long-standing inequalities in health insurance coverage for treating substance use disorders and mental issues. However, health insurance plans in the past placed much stricter limits on using these services than they did on medical and surgical care. As a result, many people faced higher out-of-pocket costs, lower annual and lifetime caps, and more restricted treatment limitations when they needed mental health or substance use disorder services.
BACKGROUND AND PURPOSE
The 1990s saw a push for parity in mental health coverage, spurred in part by the recognition of the sheer burden the disease of mental illness and addiction put on individuals, families, and our society.
Discriminatory insurance practices made these issues worse, said mental health advocates, meaning that people couldn’t get the care and support they needed.
Untreated mental health conditions and substance use disorders were associated with poorer overall health outcomes, greater healthcare costs, and large economic losses related to declines in productivity and increases in disability, according to studies.
Direct response to these concerns was the MHPAEA, affirmed into law by President George W. Bush on October 3, 2008. Its goal was to solve problems created by financial and treatment limitations that did not fairly reward those in need of mental health and addiction services. The act’s primary purpose is that health insurers must provide the same level of benefits for mental health or substance use disorder care that they are for medical or surgical care. What that means is insurance plans have to apply the same rules for coverage of co-pays, deductibles, and limits of treatment, including substance use disorders and mental illnesses, without adding additional restrictive conditions.
IMPACT AND CHALLENGES
Since the enactment of MHPAEA, substance use disorders, and mental illnesses treatment quality and accessibility have dramatically improved. The act has forced parity with these treatments and other medical and surgical benefits and this enormously improved healthcare environment.
- Increased Access to Services: MHPAEA has influenced the increase of mental health uses that it has had. When the act went into effect, the use of mental health services increased by 5 percent in the first two years, according to the National Alliance on Mental Illness (NAMI). The increase reflects the fall in financial barriers that had previously discouraged many people from going for care.
- Reduction in Stigma: MHPAEA has also helped to reduce the stigma surrounding substance use disorders and mental illnesses by legally recognizing these illnesses as equal to other medical diseases. The more people have sought help without the fear of discrimination or judgment, this cultural shift.
- Improved Health Outcomes: Equity around the treatment of substance use disorder and mental illnesses means that we are seeing better overall health outcomes. Early and appropriate treatment of mental health, substance use, and addiction problems saves costs over the long term by avoiding complications and contributing to recovery.
Despite these positive strides, several challenges persist in fully realizing the goals of MHPAEA:
- Inconsistent Enforcement: The real challenge is in the inconsistent enforcement of parity requirements among different states and health plans. The act covers large group health plans, the Children’s Health Insurance Program (CHIP), and Medicaid managed care organizations, and enforcement varies. According to a Milliman study, patients accessing substance use disorders and mental illness care are still three and a half times as likely to see out-of-network providers as compared to patients accessing medical and surgical care. The implication is that many insurers still place onerous conditions on mental health and addiction treatments that other treatments don’t undergo.
- Cost Disparities: Milliman, who conducted the same study, also pointed to the ongoing cost disparity, noting that patients destined for behavioural health care still pay more out of pocket than for other types of care. These financial barriers impede individuals from getting necessary care, undermining the role of the act that seeks to facilitate equitable access to care. The ongoing issues with inconsistent enforcement and cost disparities highlight that legislative change alone is not enough.
- Limited State Authority: Of those 19 states, only enough states have the right to enforce total parity. States such as Kentucky still do not have full authority to enforce parity in their states for all insured individuals. If there is no uniform enforcement authority, it will make such parity laws be applied and followed unevenly thus leaving gaps in coverage and protection for consumers.
RECENT DEVELOPMENTS
Given the ongoing challenges to achieving full parity, the focus of recent legislative efforts in this area has been to enhance the adequacy of the provision, the adequacy, and enforcement of the Act. Several of the measures introduced in the Consolidated Appropriations Act of 2021 will improve transparency and accountability among health plans.
The new requirements create a requirement for health plans to conduct and document comparative analyses of the design and application of their nonquantitative treatment limitations (NQTLs). It includes factors like prior authorization requirements, step therapy protocols, network adequacy standards, and so on. It is the intention to apply these NQTLs to substance use disorders and mental illnesses benefit no more stringently than medical and surgical benefits. The Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury have been given greater enforcement authority concerning parity requirements. Now, these agencies are better equipped to impose penalties and require corrective actions of noncompliant health plans.
It is these developments toward true parity in the treatment of substance use disorders and mental illnesses that represent a significant shift in the public’s mindset. These measures close the remaining gaps in the parity implementation and enforcement by holding health plans accountable and ensuring greater transparency.
CONCLUSION
Ultimately, achieving true parity will require a cultural shift in how society views and addresses mental health and addiction—an endeavor that extends beyond policy into the realm of collective social responsibility. MHPAEA is a monumental step in working towards equal treatment of those suffering from substance use disorders and mental illnesses. In the decades since its enactment, the act has made a big difference in increasing access to care, reducing stigma, and improving the health of millions of Americans. But that’s not to say it’s fully on the way yet; there are still some challenges in the way of full parity. MHPAEA’s full realizations have been hindered by inconsistent enforcement, cost disparities, and limits to asserting state authority. All of this has been addressed by recent legislative measures, most recently found in the Consolidated Appropriations Act of 2021 by increasing transparency, enhancing accountability, and building enforcement mechanisms. Now, as we move forward, policymakers, regulators, and advocates for the healthcare of all must all work to eliminate undue barriers so that all can receive the substance use disorders and mental illnesses services they need.
Author(s) Name: Shubhani Mishra (Maharashtra National Law University, Nagpur)
