Mental health care parity: the fight is on

Fortified by the Affordable Care Act (ACA) in 2010, the federal law stipulates that insurers and corporate-backed health plans, extended now to some 175 million Americans, provide access and payment structures for mental health care services on par with other medical services. 

A few additional features  

• Insurers must actively build their mental health and substance use provider networks, so they are comparable to their physical health networks.
• If a plan offers plenty of, say, cardiologists or dermatologists in-network, it can’t offer a disproportionate number of therapists or psychiatrists and still claim parity.
• Insurers must make a “reasonable effort” – a real and measurable attempt to bring mental health providers into the network, and not just shrug and say, “no one wants to join.”
• If a patient must use out-of-network mental health care due to lack of access, the cost-sharing and reimbursement must be comparable to what they’d pay for out-of-network physical healthcare.
• Deductibles, co-pays, and visit limits also must be equivalent across mental and physical care.

With these and other parity provisions, access to mental health care took a big step forward. The rules were strengthened in 2020 (by Trump) and 2024 (by Biden).

Facing a challenge

Fast forward to the present day, and mental health parity is suddenly up against the ropes and taking punches on all sides. 

On January 17, 2025, the lobbying group known as ERISA Industry Committee (ERIC) filed a lawsuit in federal court alleging that the parity rule was unlawful and exceeded the authority of the agencies that issued it. ERIC represents large companies with employees that number into the thousands.  

On this matter, it didn’t take much for President Trump to blink, even though he’d signed off on making the law stronger in 2020. First the Trump admin indicated that it would likely spend little if any time enforcing the law. Then, the admin floated the idea of striking down the law altogether, separate from any lawsuit. That idea is still floating inside the proposed federal budget heading to the Senate. The lawsuit is on hold for the moment. 

If parity rules are too rigid and penalties too steep, large employers might just stop carrying this coverage altogether or so goes the argument. A position like this might be more credible if most large employers weren’t notoriously averse to company healthcare, or at least the cost of it.

To be fair, parity rules do need shoring up. There is certainly work to be done in covering loopholes, clarifying or removing exceptions, setting up effective enforcement (again), and establishing nationwide standards—to name a few items on the work order. 

But striking down the law altogether? That’s a death sentence to many people, to be perfectly candid. 

Another punch

Now comes the latest haymaker: the aforementioned 2025 federal budget that is now under consideration by the U.S. Senate after narrowly passing in the House. Along with weakening (if not zero) enforcement of parity rules, the proposed budget includes some $1 billion in cuts to mental health programs and substance use disorder treatments. 

Heart wrenching.

States, of course, can create and enforce their own parity laws. Many already do, but others will need to strengthen their programs or join the effort to maintain and build on the progress. Funding budget shortfalls due to the looming federal cutbacks may be a tougher challenge to overcome for some cash-strapped states. 

Budget cuts and parity hits will affect mental health care on multiple fronts, adding to already-escalating needs. From coverage to access to equity, barriers to care will rise. 8.6 million may lose Medicaid benefits. (Medicaid is the single largest payer for mental health care in the U.S.) With cuts to tax credits, also in the proposed budget, millions more people could lose coverage from their private insurance carriers offering individual plans via the ACA.   

Challenges will hit the therapist community as well. No-shows and cancellations could potentially rise. Reimbursements from some insurers may be tougher to collect.  

The effect goes farther

Medical providers, who understand that mental disorders are every bit the health issue as broken bones, should be picking up gloves as well. 

Parity laws help streamline the handoff from medical doctors to mental health therapists. Everybody wins. But without parity, the burden rises for MDs, handoffs will be delayed if they happen at all. Patients go without care. Nobody wins. 

Furthermore, where does it stop? Mental health and Medicaid seem like easy targets for this administration right now, but what’s next? 

Nope. There’s nothing to like about the proposed federal budget from a mental health standpoint, or healthcare in general.

Make some noise

It’s not a given that this current version of the proposed federal budget will pass the Senate without changes or that it will even pass at all. It’s not a given that the ERIC lawsuit, if restarted, will ultimately be successful. 

There’s no time like the present to call or write to your US Senate representative. Flood inboxes and voice mails. Encourage colleagues to do the same. Help your representatives understand what is at stake: lives

Mental health parity isn’t a “nice to have.” It’s a must have. The fair and equitable access it brings to millions of people is transformational. Lives are saved, societies are more productive, and healthcare costs, with fewer untreated patients, trend in the right direction. 

Clearly, there’s plenty to fight for here. But let’s not stop at merely saving mental health parity, let’s push to make it even stronger.  

Samant Virk, MD, is the founder and CEO of MediSprout.

Additional sources:

APA, New Policies Affecting Access to Mental Health Care, May 21, 2025

AMA, Stick up for mental health parity rules in court, May 7, 2025