White House announces rule that would cut insurance red tape over mental health and substance use disorder care

The Biden administration announced a final rule on Monday meant to expand access and lower costs for care for mental health and substance use disorders. Most provisions in the rule will apply to group health plans and health insurance issuers for plan years starting January 1 or after.

Under this rule, mental health and substance use disorder care on private insurance plans should be covered at the same level as physical health benefits. That may mean “adding more mental health and substance use professionals to their networks or reducing red tape for providers to deliver care,” according to a White House fact sheet shared with CNN ahead of Monday’s announcement.

“Mental health care is health care. But for far too many Americans, critical care and treatments are out of reach. Today, my Administration is taking action to address our nation’s mental health crisis by ensuring mental health coverage will be covered at the same level as other health care for Americans. There is no reason that breaking your arm should be treated differently than having a mental health condition,” President Joe Biden said in a statement.

The rule reinforces the Mental Health Parity and Addiction Equity Act, known as MHPAEA, a 2008 federal law that requires that insurance plans that cover mental health do so at the same level as physical health. Despite the law, insurers have often made it difficult for people to access in-network mental health care, White House Domestic Policy Adviser Neera Tanden said during a briefing. Instead, people have still paid high costs for mental health care, often needing to go out of network and pay out of pocket.

The rule instructs insurers to evaluate coverage based on several criteria, including the plan’s provider network, how much plans pay for out-of-network coverage and how often prior authorization is required and approved under existing plans, according to the administration.

“No one should have to drain their savings or go into debt to get help for themselves or their loved ones,” Tanden said, adding that the change could help 175 million people with private insurance access care using their own plans.

The final rule will also close a loophole that exempted federally provided health insurance plans from complying with the MHPAEA — a move that requires more than 200 additional health plans to improve mental health care for 120,000 consumers, the administration estimates.

Tanden emphasized that access to mental health care is “crucial for the well-being of our families.”

“As you all know, mental challenges touch every corner of the country. As many as two in five American adults have anxiety or depression. Tragically, suicide is the second leading cause of death among young people at ages 10 to 24 years old,” Tanden said, calling the numbers “unacceptable.”

Enforcement of the rule will fall to the departments of Labor, Treasury and Health and Human Services, administration official have said.

“For too long, workers have faced unnecessary hurdles in accessing mental health and substance use disorder treatment – barriers that can mean the difference between life and death. The Biden-Harris administration is committed to tearing down these walls, ensuring that every worker has equal access to the care they need to thrive, both physically and mentally,” Acting Secretary of Labor Julie Su said in a statement.

Still, the law doesn’t require employers to offer mental health benefits to employees. The ERISA Industry Committee, a major employer group known as ERIC, had said some of the proposed changes were “so burdensome that many of our members will have no other choice but to re-think the type and level of their plans’ coverage.”

Melissa Bartlett, senior vice president of health policy for ERIC, said in a statement Monday that the final rule incorporated some stakeholder feedback but “adds complexity” for employers offering behavioral health benefits.

“As ERIC evaluates this rule and assesses the implications for its member companies, we will consider all possibilities to prevent further harm to employers offering behavioral health benefits, and the employees and families who count on them – up to and including litigation,” Bartlett said.

In a joint statement, the Association for Behavioral Health and Wellness, the Blue Cross Blue Shield Association and ERIC said the rule would have “unintended consequences” that could raise costs and jeopardize access to mental health care. Addressing the shortage of mental health providers is a top priority, the groups said, but “the final rule will complicate compliance so much that it will be impossible to operationalize, resulting in worse patient outcomes.”

Biden administration officials said the final rule provides clarity for insurers about their obligations and departments will assist plans to bring them into compliance. It noted that some provisions won’t apply until January 2026.

“Health care, whether for physical or behavioral conditions, is health care. No one should receive lesser care for one or the other,” US Health and Human Services Secretary Xavier Becerra said in a statement. “That’s the law. The rules we issue today make that clear.”

CNN’s Donald Judd contributed to this report.