Over the past few years health insurance has become a major issue on everyone’s mind. But where does mental health fit into this mess? The fight for mental health is just as complex as finding coverage for physical health complications.
Is Insurance Required to Cover Mental Health Care?
The short answer: no. Insurance companies are allowed to exclude certain conditions – including mental health conditions – from their coverage. Before you sign up for insurance, it is important to review limitations and coverage. It is legal for insurance to refuse coverage for all mental services if it is not part of their offered coverage.
If your health insurance does have mental health coverage, there are laws that impact what that coverage looks like. The Mental Health Parity and Addiction Equity Act, passed in 2008, states that mental health and addiction service coverage must be comparable to the benefits offered for physical health. This means you cannot be made to pay a higher copay for mental health services than other health services. You also cannot be denied coverage simply because it is mental health. But you can still be denied if it is deemed “medically unnecessary” – an issue seen throughout the medical community working with insurance.
Medical Necessity & Privacy
Just like in other areas of health, it is often the insurance companies who determine “medical necessity” – not the providers. In order to prove the importance of procedures and treatment, doctors are often forced to submit personal details about patients to the companies. HIPAA protects patient privacy by preventing unauthorized disclosure. In order to facilitate care, providers are allowed to provide information to other providers working with the patient and to health insurance companies. However, only the information absolutely essential to care is supposed to be shared. This is a very grey area when working with insurance companies.
Most health care providers and patients agree that a professional evaluation should be enough to prove necessity but insurance companies are requesting more and more information. The law does not clearly define how much information these companies are allowed access to. In some cases, insurance companies have even requested transcripts of therapy sessions. As a result, providers have to decide between providing extremely sensitive information that can be potentially flagged as a HIPAA violation and denying care.
With companies turning to artificial intelligence to speed up claim evaluations, there is also a concern of shared information being exposed to these services. As I discussed in my post on AI therapists, the security in these systems are not foolproof and it is possible to decode data. This is one issue with health insurance companies using AI that is underdiscussed.
To Diagnose or Not to Diagnose
Oftentimes, diagnosis is a major factor in insurance coverage. Some insurance companies require a diagnosis to prove medical necessity. This can lead to rushed or incorrect diagnosis. In a field where misdiagnoses are common, it is undeniable that this causes harm.
On the other hand, certain diagnoses can be completely excluded from coverage. This means a patient might either lose their insurance coverage entirely or go undiagnosed. Without a proper diagnosis, it can be difficult to find the right care or they might feel pressure to hide their symptoms.
Choosing whether or not to get a formal diagnosis is an extremely personal decision. There are many factors that are considered when determining if putting a label on someone is necessary. This should be decided by the individual and their provider – not insurers.
Reactive Care vs Preventive Care
Along with a diagnosis, insurance companies might require a condition to be “severe” or only cover crisis care. The amount of harm and financial stress that can be avoided by putting more emphasis on preventative care cannot be overstated. Early intervention is essential in preventing long-term complications – just like in any physical health field. Screening can help people get care sooner and prevent a crisis from ever happening. Therapy sessions to manage stress and learn healthy coping skills can even prevent some individuals from developing certain conditions entirely.
Adding to the Provider Shortage
Finding a mental health care provider can be a difficult and long process. In mental health especially, you have to find someone that is compatible with you and specialized in the issues affecting you. It only gets more complicated when you throw insurance into the mix.
According to the 2024 Practitioner Pulse Survey, 34% of psychologists were not in-network with any insurance company. Additionally, 53% indicated that they did not have openings for new patients. This means that finding a psychologist that is both in your network and available can be very difficult.
When asked why they were not in an insurance network, the psychologists noted some very serious concerns regarding pay and restrictive oversight. Some providers have been told to limit their sessions or provide unnecessary details like we already discussed. This overreach by insurers essentially puts them in charge of patient care and can put providers in difficult situations. Pay can also be unreliable as insurance companies deny pre-approved services or claw back money from providers after care has already been administered. As a result, providers have to choose between sticking their patients with unexpected bills or work unpaid.
Fighting for Better Care
There are actions we can take to improve mental health access and fight harmful practices in the insurance industry.
The most important step to take is to educate yourself on your rights. Understanding laws (such as the Parity Act) allows us to recognize and address violations. If you do have a good understanding, help educate others. Regulation is often confusing but a little education can go a long way.
It is also important that we support new legislation and advocate for more consumer and provider protections. Unfortunately, lots of harmful insurance practices are completely legal. Insurers often leverage the law as for-profit businesses rather than services to help medically and financially vulnerable people. As long as they have the power to override provider authority and practice unlicensed medicine, people will be hurt. Be on the lookout for new legislation and movements that impact medical insurance and care. Write to your representatives about these issues. Vote on federal, state, and local policies that positively impact mental health care.
Finally, speak out. You can help break the stigma around mental health care by sharing your story. If you are not comfortable with sharing your own experience, help elevate the voices of others and show your passion on this issue.
Thank you all for reading. As always… Stay healthy, stay educated, and stay safe.
For more information on health insurance and how it impacts mental health care, please see the following resources…
Advocate for Change (National Alliance on Mental Illness)
Does your insurance cover mental health services? (American Psychological Association)
Exploring Barriers to Mental Health Care in the U.S. (Association of American Medicine Colleges)
How insurance woes are impacting mental health care (American Psychological Association)
The Mental Health Parity and Addiction Equity Act (US Centers for Medicare & Medicaid Services)
Types of Health Insurance (National Alliance on Mental Illness)
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