A substance use disorder counselor in Portland, Oregon, talks about how people can use art as emotional therapy in 2024.
Photo by Patrick T. Fallon, courtesy AFP/Getty Images
“When you treat the whole person, you end up with better health outcomes, which is more cost-effective for the insurance companies as well.”
— Kathleen Adams
Obtaining treatment for depression or substance use should be as easy as getting care for a back injury or a broken leg. But many U.S. health insurance providers see it differently, denying far more behavioral health care claims than medical ones and introducing additional barriers.
Almost 20 years ago, Congress passed the Mental Health Parity and Addiction Equity Act, which forced insurance companies not to create additional hurdles for patients needing behavioral care beyond those for medical care, excluding plans from Medicare, the Veterans Administration and some state Medicaid programs.
To this day, insurers are required to greenlight medicine for anxiety as often as medicine for high cholesterol and they must offer in-network lists that balance behavioral and medical providers.
But parity laws have not resulted in widespread compliance among insurance carriers — despite several amendments to the 2008 federal law, provisions in the 2010 Affordable Care Act, and a 2021 federal law requiring insurers to present further proof of compliance.
“Stigma, misunderstanding and lack of knowledge continue in regard to mental health and substance use issues, including among health insurers,” Lisa Gomez, JD, former assistant secretary for employee benefits security at the U.S. Department of Labor during the Biden administration, told The Nation's Health.
Insurers routinely fail to offer adequate numbers of in-network behavioral health providers, relegating customers to out-of-network centers that are often more expensive, a 2024 parity report from RTI International found. Mental health and addiction patients were forced to use out-of-network providers about three times more often than patients seeking physical care. Visits with a psychiatrist or psychologist meant going out of network about nine times more often. Mental health professionals were also reimbursed for office visits at 20% less than that for medical professionals.
“The finding of large disparities for out-of-network use and reimbursement rates highlights that health plans are not using the same measures to improve the adequacy of their behavioral health provider networks as they do for medical networks,” report author and health economist Tami Mark, PhD, MBA, said in a news release.
Insurance companies also introduce barriers to care, such as unexplained delays or denials, inappropriate referrals, and pre-authorization and step- therapy requirements — the latter of which requires patients to try lower cost options before they can use more expensive ones.
Responding to years of noncompliance by insurance companies, a 2024 federal rule clarified a standard for covered benefits, offered a six-step analysis for insurers to determine equal access, and presented details on how insurers should evaluate outcome data.
Over two-thirds of people who need mental health care remain untreated, according to research by Inseparable.
Photo by SDI Productions, courtesy iStockphoto
The final parity rule “put more meat on the bones to the requirements,” according to Gomez, who helped draft the Biden-era measure.
Unfortunately, a lawsuit by a trade insurance association in January 2025 halted the final rule. The Trump administration then paused it, frustrating both supporters and patients.
“It's unclear when the pause will end and if there will be new regulations in another direction,” Roland Behm, JD, co-founder of Georgia Mental Health Policy Partnership, told The Nation's Health. “What we do know is the enhancement cannot be enforced.”
Despite overwhelming need, behavioral care continues to exist in the shadow of medical care. Seventy percent of people in the U.S. with health insurance and a diagnosed mental health condition did not receive care in 2023, according to research by Inseparable, a mental health advocacy organization. Over two-thirds of people who need mental health treatment, and 95% of people needing substance use treatment, remain untreated.
Stigma and culturally embedded views create a perception that mental health is distinct from physical health. Yet research shows that mental health and addiction are just as biologically and environmentally driven, said Kathleen Adams, PhD, a professor of health policy and management at Emory University's Rollins School of Public Health.
“When you treat the whole person, you end up with better health outcomes, which is more cost-effective for the insurance companies as well,” Adams told The Nation's Health.
State parity laws paving the way
States control local health insurance standards, and some are stepping up to fill the void left by the Trump administration's inaction.
In 2020, California became the first state with its own parity law. Other states have followed, including Colorado, Georgia, Illinois, Maryland, New Mexico, Oregon and Washington. States have also levied major fines, with California reaching a $55 million settlement with insurers for violations of its state parity law.
Georgia, which has more than 1.8 million people with a diagnosed mental health condition, has achieved “meaningful progress” toward parity in several categories on Inseparable's state parity ranking system. Among them are covering all “medically necessary” treatment, covering out-of-network care at no extra cost if timely in-network appointments are impossible, and covering telehealth services with counselor reimbursement at office pay rates.
Enacted in 2022, Georgia's parity law applies to private insurers, the State Health Benefit Plan and Medicaid. It requires insurance companies to file annual reports with the state commissioner showing comparative analysis and outcomes. In 2025, over 6,000 violations were logged. In January, the state commissioner announced $25 million in fines.
The Georgia law incorporates protections within the paused 2024 federal rule, as well as a detailed definition of “medical necessity,” as insurers do not have to cover anything medically unnecessary, said Behm, who helped draft the bill.
“Before Georgia had a definition, insurers were basically free to define ‘medical necessity' how they wanted, and as you can imagine, they didn't define it broadly,” Behm told The Nation's Health.
But despite the steep fines levied, Georgia needs to do more to enforce compliance, Behm said.
“There's still a fair distance from what the statute says versus what we see in practice,” he said. “And that's why we continue to improve parity enforcement and provide greater oversight, both from a legislative and an administrative standpoint.”
Even with state legislation and decades of federal law, studies are mixed on success. And insurers balking at compliance may not tell the whole story.
Sonia Tetlow, PhD, MPH, postdoctoral research fellow in the Department of Health Policy and Management at Emory University, said parity laws alone cannot solve the problem.
Black and Hispanic people lag in preventive and primary care visits, she said. Out-of-pocket costs can stretch budgets, even for in-network visits. A nationwide shortage of behavioral providers and centers can limit in-network services for mental health and addiction providers, hindering parity compliance. And stigma and cultural cues dissuade people from seeking care.
“There's not one policy that is going to address this because there are multiple barriers to care,” Tetlow told The Nation's Health. “Barriers need to be addressed at each point in the care continuum.”
For more information, visit www.inseparable.us.
- Copyright The Nation’s Health, American Public Health Association
