Mental health coverage gets shot at parity
Advocates battling for more than a decade for improved mental healthcare coverage saw their labor rewarded this month when federal legislation was passed requiring group health plans to provide equal coverage for mental and physical illnesses.
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was signed into law by President Bush on Oct. 3 as part of the $700-billion bailout. It is estimated that the bill could expand mental health coverage for about 113 million people and will take effect for most on Jan. 1, 2010.
Health plans for too long have tried to control costs by putting constraints on mental health coverage, said Andrew Sperling, director of federal legislative advocacy for the National Alliance on Mental Illness. “People often end up going to the hospital once or twice and exhausting coverage, especially in the cases of severe mental illness like schizophrenia or bipolar disorder.”
What does the act do? The legislation does not require employers to provide mental health coverage, but those that do must offer equality between mental and physical healthcare. Health plans will no longer be able to make enrollees pay a larger share of insurance coverage for mental health and substance abuse coverage than for physical illness coverage.
* Costs such as co-pays, deductibles and out-of-pocket expenses cannot be greater for mental illnesses than they are for physical health issues.
* Separate treatment limitations cannot be applied to mental health coverage -- for example, limiting the number of outpatient visits covered to treat a child with autism but not for one with a broken foot.
* Criteria a health plan uses to determine whether a mental health procedure is “medically necessary” has to be available to patients upon request.
* Out-of-network benefits -- services provided by physicians not contracted by the health plan -- have to be equal.
How will it affect the quality of my health plan? In a climate in which insurance costs are already problematic, shifting more costs to the consumer and downgrading overall health benefits are possible, says Michael Carter, vice president of the benefits consulting firm the Hay Group. And though he says it is not likely, small companies that are self-insured could drop mental health coverage altogether rather than spend the money they would need to bring mental health services in line. “There has been a continuous increase in co-pays for doctor’s visits and drugs and hospitals, and here’s yet another force entering in the equation,” he said.
Will the act affect everybody? Though the bill is a big step, not everyone will be included. The legislation allows small employer exemptions for businesses with 50 or fewer workers and does not include people covered under individual health plans. It also does not define what a mental illness is, leaving that up to the various plans, which must comply with federal and state laws on definitions. Carter said this leaves the door open for exclusion of benefits for conditions “on the cusp of mental health” -- including marriage counseling or treatment for disorders such as Down syndrome and dyslexia.
Many states already have parity laws, and so residents there may not see much change. The California Mental Health Insurance Parity Law says diagnosis and medically necessary treatment must be covered equally for mental and physical conditions and lists “severe mental illnesses” that must be covered, including schizophrenia, autism, and bipolar, major depressive and eating disorders.
Sperling said NAMI’s research has found that most plans will continue to cover “medically necessary services” for disorders in the Diagnostic and Statistical Manual of Mental Disorders.
Dr. Nada Stotland, president of the American Psychiatric Assn., said the legislation will go a long way to decrease stigma associated with mental illness.
“If their care isn’t paid for or paid for in a lesser way,” she said, “what else can a person conclude but that their illnesses don’t count as much or the treatments aren’t as successful?”
On the Web
Will the Mental Health Parity and Addiction Equity Act of 2008 raise the cost of health insurance? Read an analysis at latimes.com/health.