Marketplace Pulse: Cost-Sharing for Mental Health Services and Primary Care in the Individual and Small Group Markets. Is it Always the Same?

The Marketplace Pulse series provides expert insights on timely policy topics related to the health insurance marketplaces. The series, authored by RWJF Senior Policy Adviser Katherine Hempstead, analyzes changes in the individual market; shifting carrier trends; nationwide insurance data; and more to help states, researchers, and policymakers better understand the pulse of the marketplace.

• More than one-third (36%) of silver plans in the individual market in 2022 apply the deductible to mental health services, compared with only 23 percent that apply the deductible to primary care visits.
• Even when the benefit designs are equivalent, the average copay for mental health services is higher than for primary care ($34 versus $29 in individual market silver plans).
• A broad range of insurers in 30 states currently offer silver plans where mental health services are more expensive for consumers than primary care visits. 

Unmet need for mental health services has reached historic proportions. A recent national poll found that 90 percent of respondents believed that mental health was a crisis in the United States. The recent surge in demand for services, particularly among adolescents and younger adults, is attributed to factors such as pandemic-related stress and growth in substance use disorders. This new demand has compounded chronic access problems stemming from stigma, workforce issues, network problems, and insurance benefit designs that have traditionally made it difficult for enrollees to access mental health services. The supply problem has redoubled calls among policymakers to reduce barriers to access wherever they exist.

Problems in accessing mental health services are not new. In 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) was passed to eliminate insurance-related barriers to equitable access to mental and physical health services. Yet enforcement has been difficult, and barriers to access persist. Policymakers have recently proposed strengthening federal oversight and providing more assistance to states. There are also increasing calls to add parity protections to Medicare, which is currently not covered by the MHPAEA.

A recent brief from Georgetown’s Center on Health Insurance Reforms highlighted the difficulty in making mental health parity a reality. The analysis focuses on “non-quantitative treatment limits,” such as prior authorization, formulary design, and provider reimbursement, yet outlines a fundamental enforcement challenge: “Analyses of insurers’ compliance with MHPAEA have found widespread problems, from a failure to submit adequate information to regulators to clear noncompliance. These problems raise questions about the ability of plan enrollees to access critical mental health and substance use services.”

Assessing the benefit designs of plans on the individual and small group markets permits a comparison of patient cost-sharing for mental health versus physical health services. The goal of mental health parity laws is that requirements should be the same for physical and mental health visits, absent a comparative analysis that documents a non-discriminatory reason for the difference. For example, if a primary care appointment can be obtained at no cost or with a copay, while a mental health appointment requires coinsurance after the deductible is met, access to these two types of health services is not the same. Yet under MHPAEA, the existence of such a difference, which may result in enrollees paying more to access mental health services, does not necessarily mean that a plan is out of compliance with the law since MHPAEA requires a broader comparison between the financial requirements for mental health services compared with “substantially all” physical health services. Our findings suggest that enrollees who need mental health services, possibly even in MHPAEA-compliant plans, may still face increased cost-sharing.

We found that some silver and gold plans on the individual market had benefit designs which made mental health services more expensive than primary care. Differences in cost-sharing for mental health services and primary care were smaller in the small group market, but cost-sharing was generally higher for both types of care.

Benefit designs of some silver plans on the individual market created lower cost-sharing barriers to primary care versus mental healthcare. For example, 36 percent of individual market silver plans in 2022 applied the deductible to mental health visits, as compared with 23 percent of plans that applied the deductible to primary care visits. For silver plans in the small group market, there was very little difference in benefit design for mental health versus primary care visits, although a higher share of both types of services were subjected to the deductible. In 46 percent of silver plans in the small group market in 2022, mental health visits were subject to the deductible, which was also the case for primary care visits in 43 percent of plans.

Findings were similar for gold plans, with 27 percent of individual plans applying the deductible to mental health visits versus 17 percent that did so for primary care visits. Gold plans in the small group market had a much smaller difference, with 20 percent of plans requiring that the deductible be met for primary care visits, versus 23 percent that did so for mental health visits. For bronze plans in both markets, there were few differences in cost-sharing between mental health and primary care visits since the deductible was applied to both services by at least 95 percent of plans.

Since 2018, there has been a trend toward more individual market silver plans offering access to services before the deductible, which may reflect State-Based Marketplaces (SBMs) creating standardized plans that require certain services, most often primary care, be covered before the deductible. However, the difference between coverage of primary and mental health services remained approximately the same during this time period. For the small group market, there has been very little change in benefit design over time. Even when both mental health and primary care services are available pre-deductible, copayments for mental health are on average higher than for primary care. For individual market silver plans that require a copay for mental health and primary care services, the average copayment is higher for mental health as compared with primary care ($34 versus $29, respectively). For the small group market, copay costs were higher, but largely similar, at an average of $45 and $43 for mental health and primary care, respectively.

In 2022, about 15 percent of all individual market silver plans had a benefit design in which primary care services were available with a copay before the deductible, while cost-sharing for mental health services was only available after the deductible was met. This share was largely unchanged between 2018 and 2022. For the small group market, the share was far lower, approximately four percent, and similarly had changed little between 2018 and 2022. For gold plans in the individual market, the share offering a differential benefit design nearly doubled, from six percent in 2018 to 10.5 percent in 2022, but was still lower overall than silver plans.

Plan types differ notably between the individual and small group markets, and different plan types were associated with differential benefit designs in each segment. In the small group market, more than half of silver plans are categorized as Preferred Provider Organization (PPO) or Point of Service (POS) plans, meaning they have some degree of out-of-network benefits. One-third of small group market silver plans are categorized as PPOs, which are somewhat more likely than other plan types to have a benefit design that covers primary care but not mental health services before the deductible, with 5.5 percent doing so as compared to 3.2 percent of all small group silver plans. 

In the individual market, the distribution of plan types is very different. Open network plans such as PPO and POS plans are far less common, comprising less than 15 percent of all plans. In this market segment, closed network plans are the rule, largely Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs). HMOs are disproportionately likely to have a benefit design that covers primary care but not mental health services before the deductible. This plan type comprises 52 percent of all silver plans but 64 percent of those with different cost-sharing rules for mental health and primary care.

A broad range of insurers in the individual market offered silver plans in 2022 with benefit designs where the deductible is applied to mental health visits but not primary care visits. Plans with these designs exist in more than 30 states. In general, such plans comprise a relatively small share of all silver plans sold in any state, although in some states, such as Texas, nearly 30 percent of silver plans in the individual market have this characteristic. A typical pattern for plans with this benefit design may be to offer primary care visits for "an injury or illness" for either a copay or for no charge. However, for mental and behavioral health visits, patients are required to pay coinsurance of 30 percent or 40 percent after the deductible is met. Even after the deductible has been met, or even if the deductible is zero, as is the case with some plans, the coinsurance requirement means that mental health services are persistently more expensive than primary care.

The differences described here don’t necessarily mean that plans aren’t complying with MHPAEA. To determine whether these cost-sharing patterns comply would require looking more closely at how services are categorized and comparing cost-sharing across multiple services. However, at the very least, in these plans, access is more restricted for mental health services. The observed difference in access to primary care versus mental health services comes from classifying mental healthcare as a “specialty” service for which cost-sharing is only possible after the deductible has been met. While theoretically a patient might visit a primary care provider for a mental health condition, many primary care providers are not trained in mental healthcare, and the concept of integrated physical and behavioral healthcare is more of an idea than a reality in most places. In general, enrollees in these plans will need to spend more money out of pocket to access mental health services. Plans in the small group market are more likely to offer comparable access to mental and physical health services, but, ironically, that is largely because they offer less access to either, with a higher share of plans applying the deductible equally to both kinds of services.

Many states have made efforts to increase parity in cost-sharing for mental and physical health services and reduce barriers to care. For one recent example, in 2021, New Mexico established a fund to eliminate copays for behavioral health services. Reducing cost-sharing barriers for all kinds of services and treating behavioral healthcare as primary care would promote better access and, hopefully, help to address the country’s mental health crisis. 

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