Main Menu

Answering the Call for Better Mental Health Benefits Coverage


We live in a time of alarming stories about the mushrooming opioid epidemic. Meanwhile, random acts of horrific violence make headlines and dominate the news cycle. Mental health plays a central role in these issues and — of importance to employers — a recent study raises serious concerns about the adequacy of mental health services offered through employee benefit plans.

Prevalence of the problem

Anxiety and clinical depression are the most common mental health problems, and their prevalence is high and likely growing. According to the National Institute of Mental Health, over the course of a year about 19.1% of U.S. adults suffer some form of clinical anxiety disorder. Most cases are serious or moderate, not mild. Per the same source, 6.7% of Americans suffer a major depressive episode annually. For women, the rate is 8.5%; for men, 4.7%.

Looking ahead, a recent pharmaceutical industry research report predicted a 6% annual growth rate of sales of antidepressants through 2025. This is attributable, in part, to “the rise in economic stress factors” in countries such as the United States.


Many employers have invested heavily in their health care plans to keep their workforce healthy, engaged and productive. One might assume, or at least hope, that the Affordable Care Act’s (ACA’s) fortification of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) would have improved the quality of mental health services available to employees through their benefit plans. As noted, however, those laws seem to have fallen short of their goals so far.

As a general reminder, the MHPAEA declared that health care plans covering mental health benefits should be as generous with coverage of this broad category as they are with medical and surgical services. The law’s specific standards set a floor for states; state laws can be more stringent, but not less.

The ACA built on the MHPAEA by including mental health and substance abuse treatment services in the new list of ten “essential health benefits” required of small group plans. Specifically, such plans must cover behavioral health treatment (such as psychotherapy and counseling), mental and behavioral health inpatient services, and substance use disorder (commonly known as substance abuse) treatment.

Pay disparities

Just how much the MHPAEA and ACA have fallen short of ensuring equal coverage of mental and physical ailments is suggested by a pair of observations made in a study by consultancy Milliman, commissioned by the Mental Health Treatment and Research Institute. First, “medical/surgical providers are paid at higher rates than behavioral providers, often for providing the same services.” And, second, there are “significantly higher rates of out-of-network use for behavioral health compared to medical/surgical care.”

These cost components are likely and largely attributable to the fact that many mental health care providers opt not to participate in managed care networks. Why? Money plays a role.

There was an average pay differential between primary care and “behavioral provider” office visits during the two years covered by the study. Primary care providers were paid around 21% higher rates than behavioral providers. And the proportion of out-of-network behavioral health office visits compared to medical/surgical visits was five times higher, the study found. In short, out-of-network care is generally more expensive, which may mean people postpone or avoid treatment.

Those disparities, however, vary by region. For example, in Connecticut, the out-of-network office visit utilization rate differential was a multiple of 10.5, vs. only 1.4 for North Dakota. And in one state, Nebraska, out-of-network utilization of medical/surgical providers was slightly lower than that for behavioral health providers.

The study didn’t conclude that the only possible factor explaining the overall out-of-network utilization rates is provider pay disparities. “Other explanations … are certainly possible and likely to contribute as well,” the authors wrote. Those include “supply side issues,” such as a relative scarcity of mental health professionals in many areas, as well as “patient reluctance to switch providers to stay in-network.”

Industry reaction

Mental health advocacy groups believe the pay issue is key. The Milliman study shows that “insurers aren’t living up to the letter or the spirit of the [MHPAEA],” according to the National Association of Addiction Treatment Providers. And the former CEO of Magellan Health, a large behavioral health provider, called the Milliman study “a wake-up call for employers, regulators and health plans that whatever they’re doing, they’re making it difficult for consumers to get treatment.”

In addition, the Milliman study came on the heels of a similar one by Tami Mark, a health economist with RTI International (a nonprofit research organization). As did the Milliman study, the RTI survey identified significant regional variations, but it came to similar conclusions.

Unappealing choices

Ultimately, the Milliman study suggests that employees are faced with the following set of unappealing choices:

  • Struggle to find appointment times with scarce mental health professionals participating in health plan networks.
  • Pay a premium for using out-of-network providers.
  • Pay out of pocket for mental health services from providers who opt not to have any relationships with managed care companies.
  • Forgo or delay receiving treatment altogether.

“Some patients may want to avoid the higher costs and delay seeking needed services from behavioral health care providers, which can lead to less effective care,” the study suggests.

Looking inward

If this is indeed a wake-up call for your organization, you might best address it by determining whether your own employees are disproportionately using out-of-network behavioral health providers and, if so, why. Then consult with your benefits advisors on how you might tweak your coverage to improve the situation.



Back to Page