Federal Rule Aimed to Clarify Equity for Mental Health Coverage: Ali Khawar

Ali Khawar, former principal deputy assistant secretary with the Employee Benefits Security Administration, US Department of Labor, discussed how the federal rule passed in September 2024 regarding the Mental Health Parity and Addiction Equity Act (MHPAEA) was meant to clarify the law and provide rules for enacting equal coverage of mental health and substance use treatments.

This transcript has been lightly edited for clarity; captions were auto-generated.

Transcript

What does it mean that the federal rule clarifying the MHPAEA is no longer enforceable?

It's a very, very unfortunate development, because with the entire intent, goal, and reality of the final rule that we issued in September, it might be helpful to take a step back and explain the context that we were operating under. We saw a reality, both prior to COVID, but especially during COVID, where there was an explosion of mental health needs and substance use needs. The epidemic of mental health and substance use hasn't disappeared because there was a change in administration, and it doesn't really recognize political affiliations. Depression or opioid addiction doesn't care whether you're a Democrat or Republican, whether you voted for this president or not; it can still afflict you, your loved ones, and members of your community. The needs are incredible, and the system wasn't serving those needs sufficiently.

Now, if you go back to the very first State of the Union that President [Joseph] Biden gave, he talked about the importance of addressing issues in the mental health market. And the term that he uses, this unity agenda, these are things that all Americans should be able to get behind. A pillar of the unity agenda was about mental health. Mental health parity is a big part of that. The reason is that we knew then the same reality that we know now, which is that it unfortunately matters—if you're sick—whether you have a mental health condition or a physical health condition.

There are differences in how your insurance coverage will handle your claim, set up their networks, thing after thing that really, when you get right down to it, turn on, "are you seeking treatment for a mental health condition or a substance use condition, or is it a medical or surgical thing?" And that is what mental parity is squarely aimed at: addressing that question. 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. That's not what we were seeing on the ground when we were investigating health plans, when we were looking at health insurance policies, both in writing and in practice, what we saw time and time again is that they weren't upholding the letter of the law, let alone the spirit.

The [parity] rule was 1 of a number of strategies that we had to address that reality, and the goal was to clarify what the standards were so that it was very clear. Because one of the problems that we were trying to address was that employers were finding it hard to hold their insurance company or the service provider accountable. Compliance was very costly, very complicated, and it far too often led to the patients not getting what they needed. We really thought that the final rule was going to be a big step towards addressing that, because it would be better for employers having clear standards, it would be better for insurance companies that were trying to comply because they would understand what it was that was expected of them, and it would be better for the department that would have a clear set of standards that it was using to get to what the right answer was.

Unfortunately, that's not where the Trump administration is. They have decided not to defend the rule. In addition to announcing that they're revisiting the enforcement program, those are all very problematic developments, and what it'll fundamentally mean is that instead of taking a step forward and improving compliance—improving compliance sounds technical. Really, what we're talking about is better outcomes for individuals with mental health conditions or addiction conditions, and that is a step forward that we should all be able to agree on, and we should all be troubled by it not happening.