Trump administration reconsiders parity rules

The Trump administration is reconsidering rules enacted in 2024 that aimed to increase parity protections.

Reminder: The Mental Health Parity and Addiction Equity Act prevents insurance companies from discriminating against people with mental health and substance use disorders (MH/SUD) by requiring MH/SUD benefit coverage to be similar to coverage for physical health services.

• BUT: Since its enactment in 2008, it has fallen short. Insurance companies routinely exploit loopholes to avoid covering MH/SUD services in ways commensurate with coverage for medical services.
• In the Consolidated Appropriations Act, 2021, Congress required plans to conduct comparative analyses of coverage for MH/SUD and physical health care to demonstrate compliance with parity requirements.
• In 2024, the Biden administration enacted new rules that focused on ensuring access to care was comparable.

The details:

• The ERISA Industry Committee, a group representing large employers, filed a lawsuit in January challenging the 2024 rules, arguing they would be onerous to comply with and that the federal government overstepped in implementing them. That left the new Trump administration to decide whether to defend the new rules in the lawsuit.
• Last week, the federal government said it will not enforce the 2024 rules and will potentially modify or rescind them. The administration requested that the judge pause the lawsuit while it reconsidered the rules.

The main point: Parity is still the law — people continue to have the right to MH/SUD care that is covered comparably to medical/surgical care.

• The 2008 law and 2021 updates remain in effect and enforceable; only the 2024 rules will not be enforced.

Why it’s important: Cost is a major barrier to addiction care. Without parity, people will not get the care they need.

• Studies show that insurance plans continue to violate parity. Individuals seeking care for MH/SUD have to go out-of-network far more often than those seeking physical health care, leading to higher costs that often make care unaffordable.
• Insurers argue this is due to a shortage of behavioral health providers, but research shows that it is instead due to inadequate reimbursement rates for behavioral health providers.
• Not enforcing the 2024 rules, and potentially changing or rescinding them, eliminates progress in addressing this issue.

The larger context: This comes as the federal government is also cutting Medicaid by instituting work requirements, cost-sharing, more eligibility checks, etc., which will increase rates of uninsurance and particularly harm those with addiction.

• This sends the message that instituting onerous requirements is acceptable for individuals who need care but too burdensome for large insurance companies. The actions aim to push people from Medicaid onto private insurance but then also limit the protections in that private insurance.

Read more: Mental health care may be harder to obtain after HHS rule reversal; Trump administration may rescind mental health parity rule, filing says