The Insurance Industry’s Secret Fight Against Mental Health Equality

In the 70 years since mental health first emerged as an important national concern, tremendous strides have been made in understanding and treating behavioral conditions and in providing legal protections for those who suffer.

So how is it that, despite such progress, our country today faces a seemingly endless behavioral health crisis and a glaring lack of available and affordable care? A troubling answer has recently emerged, and it involves lawyers, guidelines and money.

When our country first recognized Mental Health Awareness Month in 1949, it signaled a new era of behavioral health care. Progress eventually found its way into Washington, and in 2008, Congress passed the Mental Health Parity and Addiction Equity Act — requiring every insurer that offers mental health coverage to do so at the same level it offers physical health coverage. Many states have adopted similar, and sometimes stricter, requirements.

On the surface, these laws have appeared successful, as most health insurers modified the terms of their plans to offer decent levels of behavioral health coverage. And yet, one in five Americans today suffers from mental illness — and of those, about 60 percent didn’t receive any treatment in the last year, according to the National Alliance on Mental Illness.

This is where the guidelines come into play. Recent legal actions have exposed a widespread practice used by insurance companies to avoid their mental health obligations. These insurers provide customers with legally compliant plan documents — but these documents are not actually used to determine coverage.

In fact, nearly all claim decisions are made based on proprietary internal guidelines that apply “medical necessity” criteria that are more restrictive than generally accepted standards of medical practice. In doing so, insurers are violating plan terms, the MHPAEA or both.

In my work as a health care attorney, I see the devastating impact of this deceptive business practice. I work with patients who can’t get benefit payments for potentially life-saving behavioral health treatments prescribed by a medical professional. And I hear stories of individuals and families brought to the brink of collapse because, despite holding policies that promise mental health and substance abuse coverage, their insurer withheld claim payments with little justification.

As one example, I have a client who is pregnant and whose insurance company denied her in-patient treatment for a severe eating disorder. Her psychologist testified that, without this nutritional counseling, both she and her unborn child face dire health risks. And yet, despite covering nutritional counseling for diabetes, obesity and other physical ailments, the insurer rejected her claim and is fighting a lawsuit we’ve brought to challenge this discriminatory decision.

This discrepancy between physical and behavioral health claims underscores the unfair and illegal nature of the industry’s actions. It also shows that our system is failing — and the primary reason, quite simply, is money.

Behavioral issues are often chronic, and treatment can be expensive. For-profit insurers are incentivized to make it difficult to obtain even basic levels of coverage and to do everything possible to deny coverage for patients living with the most serious mental illness. They target behavioral health treatments to reduce costs and because patients requiring this care face unique struggles that often make it difficult to fight back.

Meanwhile, these companies are charging consumers more and reporting record profits, and many are investing profits to help maintain an advantageous system.

During the 2016 election cycle, insurers made a remarkable $88 million in political contributions. Given such spending, it’s no surprise that few government regulators are meaningfully enforcing mental health consumer protection laws. In a recent private lawsuit in New York, the state insurance regulator even went so far as to side with the defendant insurance company in its effort to stop the case from proceeding.

And, of course, they are also investing in lawyers. Every insurer has sophisticated, well-funded legal defense teams that can easily outgun individuals seeking justice through the courts. Even if successful, one-off challenges do little to change insurers’ underlying abusive policies.

There is hope, however. A 2016 ruling in a case brought by my firm certified a class action lawsuit against UnitedHealth for behavioral claim denials that violate employment and health laws. For the very first time, tens of thousands of mental health patients were able to pursue legal action jointly, allowing them to mount a more forceful challenge. That case, which went to trial last year, has already helped advance additional class action lawsuits challenging the discriminatory practices of other insurers.

But these cases on their own are unlikely to resolve our nation’s behavioral health woes. In the face of continued widespread manipulation of the health system by insurers, true progress will require more than raising awareness and improving treatments. It must include a commitment to more legal action, more public pressure and more aggressive enforcement of mental health laws. Only this way will we finally have a chance of eliminating our nation’s systemic mental health discrimination.


D. Brian Hufford is a partner at Zuckerman Spaeder LLP.

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