COVID-19 & the Coming Mental Health Emergency: Why We Must Prepare

Wednesday, May 27, 2020

The COVID-19 pandemic presents complex challenges for the US health care system and social safety net programs. In our latest blog post series, IMPAQ experts bring you timely updates and informed insights on the intersection of COVID-19 and pressing policy issues.

Before the COVID-19 pandemic, tens of millions of Americans lacked timely and affordable access to mental health services. Now, more than two months into the United States’ fight against COVID-19, the Substance Abuse and Mental Health Services Administration predicts that countless more adults will need urgent care to address mental health needs. Mental Health America, a community-based nonprofit that works to promote mental health and address the needs of people living with mental illness, saw a 12 percent increase in anxiety in American adults in the first two weeks of March alone. Despite temporary policies aimed at increasing access to health care, such as short-term health plans and increased access to telehealth, can our broken mental health system handle the coming surge in mental health needs?

The United States Faced a Growing Mental Health Crisis before COVID-19

In 2019, over 45 million adults experienced mental illness, but only about 40 percent of them received treatment.

In the 2020 State of Mental Health in America report, it is clear that many Americans have difficultly accessing mental health providers and benefits. In 21 states, there was one mental health provider per 500 or more people during 2019. Pennsylvania, New York, and Vermont were ranked as the top three states with the best overall mental health in the report. Idaho, Oregon, and Nevada were ranked the worst, along with other large, rural states. 

A 2019 report by Milliman actuaries found significant disparities in out-of-network utilization and provider reimbursement in patients needing mental health and substance use disorder (MH/SUD) services compared to their peers requiring medical/surgical (M/S) services, despite federal regulations prohibiting this.

The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires large group health plans that provide coverage of MH/SUD services to do so in parity with M/S services. The Affordable Care Act extended the parity requirements under MHPAEA through the essential health benefit (EHB) requirement to the individual and small group markets. MHPAEA applies to nearly all aspects of health carrier operations that have a direct or indirect impact on member access to health care benefits. However, enforcement of MHPAEA can vary greatly from state to state, and some insurers still provided insufficient coverage of mental health benefits prior to the pandemic.

MHPAEA requires that health plans providing mental health or substance use disorder benefits do not impose financial requirements or treatment limitations that are more restrictive than those that apply to medical and surgical benefits.

Effects of the Pandemic Worsen Mental Health, Add Obstacles to Treatment

The Kaiser Family Foundation found that 45 percent of adults in the United States report worsened mental health due to pandemic-related stress. People are experiencing poor mental health as result of policies aimed at slowing the spread of the virus, such as shelter-in-place orders. Traumatic life events, including loss of jobs, friends, and family, are taking their toll as well. The Well Being Trust estimates that “deaths of despair,” especially suicide, will increase in the coming years due to rising depression, anxiety, and grief related to COVID-19.

45 percent of adults in the United States report worsened mental health due to pandemic-related stress.

People who experienced mental illness prior to the pandemic now face greater barriers to accessing care. Due to social distancing protocols, these individuals are unable to attend in-person treatment programs, support groups, and community services. While some insurers offer telehealth benefits (including virtual meetings with mental and behavioral health counselors and support groups), these are not universal offerings, and there may not be enough telehealth infrastructure to meet demand.

“This leaves the United States vulnerable to a massive mental health crisis in the next few years, as the number of people who need mental health care could rise to an unprecedented level,” says Garry Carneal, a nationally regarded expert on MHPAEA and managed care compliance and policy, as well as CEO of Schooner Strategies and contributor to the Kennedy Forum.

The CARES Act and Insurer Policies Address the Mental Health Crisis, but Gaps Remain

In an attempt to address the surge in the health care system, the Trump administration included mental health services provisions in the March 27 Coronavirus Aid, Relief, and Economic Security (CARES) Act. Additionally, the DEA approved the use of telemedicine for services such as obtaining prescriptions for controlled substances, which are often used in substance use disorder treatment programs.

CMS waived various Medicare payment requirements to facilitate access to virtual mental health services, while many private insurers are waiving copayments and cost-sharing mental and behavioral telehealth services. This is partly due to changes in state legislation: the Commonwealth Fund found that as of May 11, 2020, 23 states required and 10 recommended telehealth expansion.

The expansion and rapid development of telehealth policies and platforms have increased access for people with mental illnesses, but these developments may not be enough. While greater access to telehealth will increase access to providers, there still may be network adequacy concerns if individuals are unable to find providers that accept their insurance. By enforcing mental health parity regulations, states can help ensure the growing number of people who require mental health services are able to get these benefits through their insurance plans. “This is why mental health parity is so important moving forward,” explains Timothy Hill, a Senior Vice President at IMPAQ and a former senior Medicaid and Marketplace official at CMS. 

While Massachusetts, California, Illinois, and Pennsylvania took steps to improve mental health parity enforcement prior to the pandemic, such as passing statewide laws and increasing surveillance using market conduct exams or audits, states have further to go in improving parity compliance.

Where are the Gaps that Leave Patients Most Vulnerable?

In a conversation with IMPAQ, mental health care compliance and policy expert Garry Carneal explained that “although federal and state governments have adopted regulatory protections, including the federal parity law and utilization management regulations, all too often patients do not get the access to the care they need or are not reimbursed for mental health services.”

Carneal also noted several exposure points that perpetuate care gaps, including “when a health insurer makes an ‘adverse benefit determination,’ the process of how a ‘medical necessity determination’ is made is often outdated or biased.” 

Another issue, highlighted in the recent court case Wit vs. United, is that health plans often do not use review guidelines that meet “generally accepted standards of care” according to the case. Carneal concluded, “the health insurance appeals system is overly complicated…[and] in times of crises, appealing a denial of care is overwhelming.” 

How can Communities and States Prepare for the Mental Health Surge?

“From a public policy perspective,” said Carneal, “we can level the playing field between mental health and traditional medical/surgical coverage by encouraging health insurers to implement complex condition management programs, updating insurance regulations, and promoting tools that can help automate parity compliance.”

Communities can prepare by assisting local physicians in setting up their telehealth infrastructure, developing sustainable neighborhood support networks, increasing their mental health provider workforce, and offering a wide variety of mental health services. Resources like SAMHSA’s Behavioral Health Crisis Care Best Practice Toolkit can serve as a starting point for developing community-wide contingency plans.

States should consider prioritizing mental health parity enforcement and adherence. This can be done through a number of avenues, including a targeted review for potential mental health parity violations in their review of health plan forms shared with consumers, ensuring the benefits language aligns with MHPAEA guidelines. IMPAQ has worked with the state of Pennsylvania on such an effort, which has helped the state reduce potential MH parity violations prior to health plans being offered to consumers. This form review process can potentially reduce future denials and lengthy appeals processes.

State regulators can also increase oversight of health insurers by conducting targeted market conduct exams, or audits, examining health plans’ adherence to mental health parity. Given the country’s current and future mental health challenges, these tools to improve MHPAEA adherence, along with the steps the federal government and health plans have taken to improve access, can work to combat the United States’ incoming mental health crisis. To mitigate this emergency, states and local communities must act now.

To speak with IMPAQ experts about our work supporting clients with mental health parity enforcement, contact us. To receive future posts in this COVID-19 blog series, subscribe to IMPAQ Health News.


Elizabeth Messenger-Jones, Senior Policy Analyst, IMPAQ Health
Leah Dillard, Analyst, IMPAQ Health
Kevin Van Dyke, Managing Director, IMPAQ Health