The Trump administration has suspended enforcement of updated federal regulations designed to strengthen mental health parity requirements, marking a significant policy reversal that could affect insurance coverage for millions of Americans seeking mental health and substance abuse treatment.
The US Justice Department announced Friday that the Department of Health and Human Services, Treasury Department, and Department of Labor would reconsider the rule finalized in September 2024 under the Biden administration. The regulation had aimed to clarify and strengthen enforcement of the Mental Health Parity and Addiction Equity Act (MHPAEA), originally enacted in 2008.
Regulatory Background and Intent
The updated parity rule was designed to address persistent gaps in mental health coverage despite the 2008 law's mandate for equitable treatment. Ali Khawar, former principal deputy assistant secretary with the Employee Benefits Security Administration at the Department of Labor, explained that investigations revealed widespread non-compliance with existing parity requirements.
"What we saw time and time again is that they weren't upholding the letter of the law, let alone the spirit," Khawar told The American Journal of Managed Care. "If it's mental health vs not mental health, it shouldn't be disparate just because of the kind of treatment you're going to get, because mental health is health care, just like any other form."
The September 2024 regulations required insurers to provide meaningful benefits for mental health conditions comparable to those offered for physical conditions, going beyond written policies to ensure real-world accessibility. The rule incorporated public feedback and aimed to establish clearer compliance standards for employers, insurers, and enforcement agencies.
Industry Opposition and Legal Challenge
The ERISA Industry Committee, representing Fortune 500 companies, filed a lawsuit challenging the updated regulations, arguing they exceeded the administration's authority. The trade association contended that the new rules would reduce care quality while increasing costs for employers and patients.
The lawsuit had the potential to undermine not only the 2024 updates but also the foundational 2008 parity law, according to legal experts. However, the litigation is now on indefinite hold following the administration's decision to reconsider the rule.
Policy Implications and Expert Concerns
Lisa M. Gomez, former assistant secretary of EBSA who worked on the parity provisions, expressed understanding of the administration's pause but raised concerns about the accompanying non-enforcement policy.
"If the Administration goes too far with a non-enforcement policy, we will be moving backwards, rather than considering all of the tens of thousands of comments received on the rule," Gomez, now with LMG Collaborative Consulting Solutions, warned. "I hope that the Administration will take the time to listen to all voices and perspectives before taking action that could result in people not only losing access to care, but also losing their lives."
The American Medical Association has emphasized that lives are saved when health plans provide equitable coverage for mental health and substance abuse treatment. Medical experts note that the 2024 rule represented clarification rather than expansion of existing legal requirements.
Broader Mental Health Policy Context
The suspension comes amid several Trump administration actions affecting mental health services, including proposed cuts to LGBTQ specialists on suicide hotlines, termination of 128 National Institute of Mental Health grants, and proposed budget reductions to HHS programs focused on mental health and addiction treatment.
Khawar highlighted the ongoing need for mental health services, noting that "depression or opioid addiction doesn't care whether you're a Democrat or Republican" and that mental health needs have remained elevated since the COVID-19 pandemic.
Current Status and Future Outlook
The administration has indicated it may either completely rescind the rule or modify its provisions. Until a final decision is made, the enhanced enforcement mechanisms will remain suspended, potentially allowing insurers to maintain coverage disparities between mental health and physical health services.
The policy reversal affects enforcement of requirements that insurers demonstrate comparable coverage for mental health conditions, including network adequacy, prior authorization processes, and treatment limitations. Without active enforcement, patients may face increased barriers to accessing mental health and substance abuse treatment services covered under their insurance plans.
