Why Parity Matters | Tennessee Parity Project

The premise of parity is simple— insurance coverage for and access to mental health and addiction care should be no more restrictive than coverage for and access to other medical care.

Thanks to the Mental Health Parity and Addiction Equity Act of 2008, also known as the Federal Parity Law, today most health plans cover mental health and addiction treatment.

However, the rules and regulations implementing the Federal Parity Law are complex and confusing, and insurance companies continue to deny coverage or limit treatment options for those seeking mental health and addiction treatment.

Coverage denials or inadequate treatment can result in people trying to navigate a confusing insurance system while in the midst of a personal crisis; family members sacrificing retirement or college savings, or declaring bankruptcy,

to pay for treatment their insurance plans won’t cover; and people ultimately dying from overdoses or suicides due to lack of treatment.

States have primary enforcement authority over insurers in their states. Tennessee has passed legislation to strengthen the enforcement of the Federal Parity Law at the state level, but increased compliance and enforcement efforts are still needed to achieve true parity.

As rates of suicides and overdoses continue to climb in Tennessee, the continued fight for mental health parity is more important than ever.

Frequently Asked Questions

What is Parity?

Historically, insurance plans covered treatment for behavioral health conditions (mental health and addiction) less generously than treatment for physical health conditions. Parity is about making health plans treat individuals with mental health and addiction fairly.

With the passage of The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), most health plans are now required to provide mental health and addiction benefits on a comparable basis to benefits for other medical conditions. This includes most employer-sponsored group health plans and individual health insurance coverage. Most group health plans, Medicaid managed care organizations, State Children’s Health Insurance Programs and individual health plans sold in the Health Insurance Marketplace through the Affordable Care Act (ACA) are required to follow federal parity mandates.

Parity in Tennessee

Despite the passage of federal and state parity laws, Tennesseans living with mental health and addiction challenges continue to face barriers in finding affordable, quality care. This is, in part, attributable to insurance companies’ continued practice of denying coverage and limiting treatment options.

Filing a Complaint

When care is denied, a health plan member or provider has the right to complain (about the quality of care or coverage) or to ‘appeal’ (ask for a different decision). Complaints and appeals are a standard part of the insurance business. State and federal agencies need complaints and appeals because they are helpful in finding out where the problems are and making the parity law stick.

Additional Resources

More information about continued inequalities between health insurance coverage of mental health and substance abuse conditions and that of other medical conditions can be found in The Doctor is Out: Continuing Disparities Between Mental and Physical Health Providers in Health Insurance, a 2017 Milliman report and accompanying NAMI report that look at the shortages of in-network care providers and disproportionate out-of-pocket costs for people seeking mental health care.

Insurer violations of mental health parity laws can take many forms, including placing limits on how long and how often patients can receive care, providing insufficient networks of mental health providers, and more.

Most people are unaware that a parity violation has ever occurred. If you know what to watch out for, you will be better equipped to assert your rights.

What does a parity violation look like?

Common parity violations include:

Fewer visits or days covered for mental health or addiction care.
Residential or partial hospital care not covered for mental health or addiction. Example: Addiction residential care is not covered, but a skilled nursing facility is covered for stroke
Higher out-of-pocket costs for mental health or addiction care. Example: the copay for a mental health therapy visit is higher than copay for an endocrinologist for diabetes.
Separate deductible for mental health or addiction care on top of the overall deductible. A deductible is the amount you are responsible for before the health plan begins to pay.
More frequent denial for mental health or addiction care than for other medical care because the health plan determines that the care is not medically necessary.
Prior approval required more often for mental health or addiction care than for medical care.
Step therapy: The least expensive mental health or addiction treatment is required before the prescribed care can be considered.
In-network mental health or substance use providers not available and the health plan does not pay for the out of network providers in your local area.

For more information about warnings signs that a plan or issuer may be imposing an impermissible Non-Quantitative Treatment Limitation (NQTL), review the Department of Labor’s publication Warning Signs- Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance.