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How Insurance Companies Contribute to the Nation’s Mental Health Crisis

From “ghost networks” to denial of doctor-prescribed care, insurance companies put too many obstacles in the way of people who need help. State policymakers need to take action, and voters will support them.

Depressed-looking man
America’s mental health crisis is a well-established reality. Headlines heralding bad news about depression, anxiety, substance use and suicide rates are omnipresent. We can’t address this crisis without an honest conversation about the role of insurance companies that exacerbate it.

Of the 1 in 5 Americans who experience a diagnosable mental health condition in a given year, only half receive care. That’s unconscionable. A new report from our organization, Inseparable, features hard-to-find claims data that paint a stark picture and provide state-specific scorecards and recommendations for policymakers to take action.

The report reveals that among people with commercial insurance, only 30.7 percent of individuals diagnosed with a behavioral health condition in 2021 received specialty care, defined as care from a behavioral health specialist in a professional setting. That means more than two-thirds of commercial insurance policyholders with a known diagnosis were paying for coverage of care they needed but weren’t getting.

Coverage does not equal access to care, because insurance companies are systematically shortchanging their customers. Too often, the journey to receive mental health care is full of obstacles:

“Ghost networks” and out-of-network costs. The first step, trying to make an appointment with a doctor or therapist, is beyond onerous. Insurance companies’ inadequate provider directories are routinely populated with duplicates, retirees or providers who are not accepting new patients. The lack of in-network providers often forces people who need care to pay out of network. The average out-of-pocket cost for an hour-long psychotherapy session in 2021 was $174, a huge barrier to access.

Denial of doctor-prescribed care. If customers actually get to see a provider who prescribes treatment, the provider’s treatment plans are scrutinized by insurers who routinely refuse to pay for the recommended treatment. These denials come in a variety of forms — requiring prior authorization, mandating “fail first” policies, cutting treatments prematurely short, treating a symptom rather than the underlying condition — but boil down to insurance companies interfering in the doctor-patient relationship in order to maximize profits.

Emergency room trauma. Not being able to find a doctor or spending hours on the phone appealing denials of care are not mere inconveniences. Individuals who face barriers to outpatient care are more likely to end up in the emergency department, often traumatizing patients further and increasing the financial burden on hospitals and taxpayers.

Health insurers rush to blame workforce shortages for their deficient products. Workforce shortages do exist, but insurers conveniently ignore their own contributions to them. By setting below-market reimbursement rates and making providers jump through endless hoops for payment, they drive providers out of network and perpetuate the problem.

They also use the scare tactic that any reform — or merely the enforcement of existing law — will cause premium increases, never mind that the real culprits are their ever-growing profit margins and outsize executive pay.

When policymakers stop insurers from skirting the law and require proper coverage for care insurers’ customers are already paying for, we will see the mental health treatment gap start to narrow. And even though the insurance industry spends mightily to stop reform, research shows that policymakers who want to right this wrong will likely be rewarded at the ballot box.

In poll after poll, voters across state and party lines have said they want lawmakers to do more to expand access to mental health treatment. They overwhelmingly favor reforms like requiring insurers to cover care prescribed by a doctor, maintain accurate provider directories, pay for out-of-network costs incurred because of an insurer’s inadequate network, and end arbitrary limits on care. Seventy-six percent of voters say they are more likely to vote for candidates who support these reforms.

The appeal to voters will not be limited to those impacted by mental health challenges. Everyone deserves better from insurance companies.

Bill Smith is the founder and CEO of Inseparable, a mental health advocacy organization.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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