Wash. lawmakers push to expand mental health insurance coverage

When people seek mental health treatment in Washington, insurance companies are supposed to cover that care just like they would physical ailments.

Instead, people often find that coverage denied — and they aren't always told why.

A bill moving through the state Legislature aims to change that.

House Bill 1432 would require all insurers in Washington state to follow a single set of standards, recommended by doctors and publicly available, for covering mental health treatment.

The bill would also allow the Office of the Insurance Commissioner to put additional pressure on insurance companies if they don't adequately cover mental health.

"Today, insurance companies are really able to create their own rules regarding medical necessity determinations," said David Lloyd, the policy director of Inseparable, a national mental health nonprofit that helped draft the bill. "So this legislation would finally create one set of standards, one set of rules for everyone that aligns with what is best for patients, to make sure they're getting the mental health coverage they're actually paying for."

Rep. Tarra Simmons, the primary sponsor of the bill, said the bill would increase desperately needed access to mental health treatment for Washington residents.

"We are still in a mental health crisis. This bill is about addressing real-life consequences that Washington residents experience when coverage is denied," Simmons said. "The longer we take to act, the more constituents are cut off from potential lifesaving care we need."

Coverage still lacking

Current state and federal laws already require insurance companies to cover mental health treatment in a similar way to physical health — a practice known as "mental health parity."

But coverage of mental health treatment still often lags behind, studies show.

An April 2024 report from RTI International, a research nonprofit, showed patients went out of network for behavioral health care 3 1/2 times as often as they did for medical or surgical treatment — an indication that many of them couldn't find care covered by insurance. Patients also went out of network more than 10 times as often to see a psychologist, and nine times as often to see a psychiatrist than for physical ailments.

One reason parity isn't being achieved, proponents of the bill say, is that insurers are only required to cover treatment that is deemed "medically necessary" — a term that, despite the name, is not determined by doctor recommendations. Instead, decisions about what is medically necessary are often based on criteria developed by private health organizations, which are then sold to insurance companies.

That system often leads to inconsistencies between what different insurance companies approve.

For example, some companies will cover higher "levels of care," or intensities of treatment, that others will leave out.

In an email to lawmakers supporting the bill, Brian Allender, the chief medical officer for King County's Behavioral Health and Recovery Division, noted that one large health organization that develops insurance guidelines, MCG Health, doesn't line up with several national psychiatric organizations. For example, MCG doesn't include certain types of community-wraparound care programs in its criteria, he said — programs like Wraparound with Intensive Services, or WISe, which brings together a team of professionals to help children with complex psychiatric needs live at home.

"Commercial insurers are not currently contracting for and covering this critical and evidence-based level of care," Allender wrote, "and this in turn is a common reason why providers are encouraging young adults who have developed a serious mental illness to get off their parents' commercial plans and onto Medicaid."

The bill would ensure that insurance companies have to follow another set of criteria, which includes more types of mental health care in its coverage.

As the bill makes its way through the House of Representatives, some lawmakers and health insurance companies have raised concerns about how such changes could affect insurance operations, as well as consumer costs.

MCG, the Seattle-based health care company that sets criteria for insurance companies and providers, pushed for some changes to the bill before it moved forward.

Donna Baker-Miller, the vice president of government affairs for MCG, said in an email that the company wants insurers to be allowed to continue using criteria from other organizations such as MCG, as long as it's not more restrictive than the medical guidelines referred to in the bill.

As of Thursday, lawmakers said that change would likely be allowed as the bill moves forward.

Some are also concerned that if insurance providers are required to cover more services, that cost would get passed on to consumers.

Jennifer Ziegler, a lobbyist for the Association of Washington Healthcare Plans, told lawmakers the bill would likely raise insurance premiums.

"Even though there's not a general fund impact to the bill, there's a consumer impact," Ziegler said.

But Lloyd, the nonprofit policy director who helped craft the bill, said it would help control health care costs by getting people necessary treatment before their problems escalate.

"One of the things about mental health and substance use disorders is that when they're not treated effectively, people with these conditions often have the highest total health care costs," he said.

Some who spoke in support of the bill also drew parallels between inaccessible mental health treatment and other widespread social problems.

"When people are in the midst of struggling with a mental health or addiction problem, they're often not good advocates for themselves," said Jürgen Unützer, the chair of the University of Washington's Department of Psychiatry. "A person might have good, employer-sponsored health care. But if they're struggling with behavioral health or substance use disorder, it's challenging to get timely, effective care. Things go sideways and unravel. You might lose that coverage. Then you're on Medicaid, homeless, on the streets. We could prevent all that if we had better access to mental health care."

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