The lack of behavioral health parity has long been a persistent issue in the United States, and its consequences for patients are profound and far-reaching. The inability to access in-network care for mental health and addiction services forces many patients to make impossible decisions. For those without the financial means to pay for healthcare out-of-pocket, this often means forgoing the care they desperately need, or worse, facing personal and financial sacrifices that can have lasting consequences.
As Sean Bell, General Manager of New Ventures at mental health provider Spring Health, shared at the Behavioral Health Business’ INVEST event, many patients are forced to make life-altering decisions just to afford the care they need. Bell recounts heartbreaking stories of families losing their homes because they had to choose between paying for essential residential care for a child with a mental health issue and covering their own rent or mortgage. The stark reality of these choices underscores the systemic flaws in how behavioral health services are reimbursed and raises urgent questions about the fairness and accessibility of mental health insurance coverage in the U.S.
Spring Health, a New York City-based virtual mental health provider, offers a range of digital tools, including coaching, therapy, and meditation, aimed at improving mental health access through employers. Despite raising a total of $466.5 million in funding, including a $100 million Series E round in July 2024, the company continues to face the same challenge: the disconnect between how mental health services are covered versus how physical health care is treated. Spring Health partners with top companies like Adobe, Bumble, and Delta to offer mental health support to employees, yet the overarching issue of mental health insurance coverage remains unresolved.
The Promise of Parity Laws
Behavioral health parity laws are a significant step forward in addressing the longstanding inequities faced by mental health patients. These laws aim to ensure that behavioral health services are reimbursed on the same terms as physical health care, ending the historical practice of offering limited coverage for mental health conditions. Recent regulations are designed to alleviate the financial burdens placed on patients, ensuring that they no longer have to make impossible choices when seeking care. However, these laws bring new challenges for health providers and insurers as they adapt to the shifting landscape of behavioral health care.
In September 2024, the Biden administration released a final rule under the Mental Health Parity and Addiction Equity Act (MHPAEA), which revises how health plans can limit behavioral health benefits. This new rule aims to level the playing field by ensuring that health plans can no longer impose unreasonable restrictions on behavioral health services. Dr. Tamir Aldad, founder and CEO of Mindful Care, describes this regulation as a positive step forward, emphasizing that focusing on patient outcomes—rather than arbitrary limits—will improve access to care for those who need it the most.
“What’s huge here is being focused on the patients and their outcomes in terms of parity,” said Aldad. “No longer being able to limit the number of sessions someone can have, the medications we can prescribe, co-pays, and inpatient responsibility changes—it’s all great when the focus is on outcome-based care.”
Despite the promise of these regulations, there are significant concerns about the long-term impact on behavioral health providers. Aldad noted that while the regulations look good on paper, they could lead to unintended consequences for providers, particularly regarding their economic sustainability. “When you look at it in a vacuum, it sounds excellent,” Aldad said, “but when you look at it holistically, we might be in for some turbulence when we try to see how sustainable it is across everyone involved.”
The implementation of these regulations also requires collaboration between providers and health plans to ensure that the behavioral health services offered align with other medical services. Behavioral health providers will need to ensure that their offerings are compliant with the new parity standards and that they are compensated fairly for their work. These changes may lead to financial strain for some providers, particularly if reimbursement rates are not adjusted to account for the increased demand and complexity of care.
Improving Access and Reducing Inequities Across Demographics
While the new parity laws are a significant step, they alone may not be enough to address the deep inequities that persist in the behavioral health care system. One of the key issues is ensuring that all patients—regardless of their demographics—have equal access to the care they need. According to Dr. Aldad, patients who don’t receive timely care often end up in emergency rooms or hospitals, where the costs of care are exponentially higher. The financial burden of waiting until conditions worsen disproportionately affects low-income individuals and those in marginalized communities, making it essential for providers to step up their efforts to improve access to care early on.
Measurement-based care, a model that uses frequent assessments to track patient progress and tailor interventions to individual needs, is one way providers can improve access. This approach allows providers to identify which patients need care the most and target those individuals specifically, rather than relying on broad population-level trends. As Sean Bell of Spring Health explained, this individualized approach helps to ensure that those who are most in need receive timely and appropriate care.
Spring Health takes this a step further by addressing the social determinants of health that can contribute to poor outcomes. By asking patients about factors such as food insecurity, housing instability, and domestic violence, Spring Health is able to gain a more complete picture of the challenges their patients face. This comprehensive approach allows providers to intervene early and shift care to more affordable and effective modalities before conditions worsen.
This proactive approach not only improves patient outcomes but also reduces the overall cost of care. By addressing risk factors before they lead to full-blown crises, providers can offer care that is less expensive for patients, ultimately lowering co-pays and coinsurance. According to Bell, this shift in care delivery has already had a significant impact on patient retention, as more individuals are able to stay in care longer without facing insurmountable financial barriers. This is a direct result of improved mental health insurance coverage and a more equitable approach to care.
Incentivizing Providers to Improve Access
While the steps taken by companies like Spring Health are commendable, improving access to care cannot be solely the responsibility of providers. As Dr. Aldad pointed out, the burden of improving access often falls on clinicians, but this can be unsustainable if they are not properly incentivized. Many behavioral health providers are working with limited resources, and without adequate financial support or incentives, they may struggle to maintain high-quality care across a large patient population.
This is where the new parity laws could play a critical role. Under the MHPAEA, health plans are required to demonstrate equitable payments across all types of care. This means that behavioral health care providers should no longer be underpaid compared to providers treating physical health conditions. This shift promises to provide a more sustainable financial model for providers, which could, in turn, improve the quality and accessibility of care.
Bell explained that the new regulations would bring greater scrutiny to the financial disparities that have historically existed between behavioral health care and other medical services. “If traditionally, you would see behavioral health care providers getting paid substantially less for acute conditions compared to an acute condition medically, that is going to be put up to pretty severe scrutiny over the next few months,” he said.
In the long run, these changes could create a more equitable and sustainable system, where providers are fairly compensated, patients have better access to care, and the overall cost of treatment is reduced. As parity laws evolve, ensuring fair mental health insurance coverage will be crucial for supporting both patients and providers.
Looking Ahead: A More Equitable Future for Behavioral Health
While the road to full parity is still under construction, the introduction of new laws and models of care offers hope for a more equitable future in behavioral health. As the industry continues to evolve, it will be critical for policymakers, providers, and payers to work together to ensure that these changes lead to lasting improvements in access, affordability, and quality of care.
For patients, these changes represent a chance at better health outcomes and more opportunities to receive the care they need without making life-altering sacrifices. For providers, the challenge will be navigating the new regulatory environment while ensuring that they are fairly compensated for their work. However, with continued innovation, collaboration, and a strong focus on patient outcomes, the future of behavioral health care can be brighter for everyone involved. Ensuring mental health insurance coverage remains at the forefront of this transformation is key to building a system that truly serves those in need.
