Mental health parity act may affect your medical benefits

The Mental Health Parity and Addiction Equity Act of 2008, by some estimates, could affect the health coverage of approximately 113 million Americans. Exactly how it will affect them, though, will vary widely.

The purpose of the law, which went into effect in July, is to create equal coverage between medical/surgical services and mental healthcare services. The legislation requires group insurance plans to offer the same deductibles, copayments, frequency of treatments and days of outpatient services. The act does not mandate mental health coverage, just equality if it is offered by an employer.

Other provisions of the bill require out-of-network coverage for mental health services, parity of coverage of medical and mental health medications, and if someone is denied coverage of a mental health service that is deemed medically unnecessary by the insurer, patients have the right to find out why.

Individual and small business plans are exempt from the legislation, so they won’t be affected. But the law does apply to group health plans sponsored by businesses with more than 50 employees, approximately 96% of which have some mental health coverage, although only a small percentage provide very robust benefits.

Doug Nemecek, senior medical director for CIGNA’s behavioral health business, said approximately 20% of the company’s plans were already meeting the general requirements (because the employers were doing so of their own volition or complying with state laws such as the one in California). OptumHealth Inc. had slightly higher numbers, 30% to 40%, according to Rhonda Robinson Beale, chief medical officer for OptumHealth Behavioral Solutions.

Impact

The law takes effect at the beginning of a health plan’s new year, so many people won’t see any changes until January. At that point, people who will see the most benefit are those who previously had high copays and deductibles on mental health services.

One of the major new differences will be the prohibition of treatment limits, said Pamela Greenberg, president and chief executive of the Washington, D.C.-based Assn. for Behavioral Health and Wellness, an association of behavioral health and wellness insurers including Aetna Behavioral Health and OptumHealth Behavioral Solutions. Insurance companies typically had arbitrary limits on mental health inpatient and outpatient visits, she said — often 20 to 30 a year. Because these kinds of limits don’t usually apply to medical/surgical care, mental health limits would be eradicated as well.

With the limits gone, it should be easier for people to receive treatment for chronic conditions such as depression or bipolar disorder, said Andrew Sperling, director of federal legislative advocacy for the National Alliance on Mental Illness. The impact will be far less for people who already have good mental health benefits, who have mild depression or have an acute life crisis where only a small amount of treatment is needed.

Cost

Copayments and deductibles now have to be equal, but there are various ways insurers could choose to implement the change, Greenberg said.

If a plan right now has a $25 medical copayment and a $40 mental health copayment, both might be changed to $25 — or the difference could be split, creating a copay of $30 for either, for instance. (They could also raise the copay for both services to $40, of course.) Deductibles could be similarly split — a $200 medical and $300 behavioral health being averaged, say, into an across-the-board $250 deductible. (Again, these are just examples.)

For users of mental health services, this could reduce out-of-pocket costs dramatically over time — but it also could increase costs potentially for others who don’t use them much.

Some plans that had good behavioral health benefits (with deductibles lower than those for medical services) may cost more now that the two types of copay must be equal.

“There will be some unintended consequences with the regulations,” Robinson Beale of OptumHealth said. “Any time you create a law or new interpretation of one, it acts for the majority of the population in the way it is intended, but there will be a subset that will have a negative consequence.”

Ripple effect

One way to understand what kind of effect the act will have is by looking at the Federal Employees Health Benefits Program, which adopted parity in 2001. The government’s plan is the largest employer-sponsored health insurance program in the country, covering more than 8 million people and spending $29 billion on benefits annually.

The plan’s beneficiaries were more likely to use mental health and substance abuse services after parity was implemented, according to a 2004 Health and Human Services report. But the increase fell in line with the rest of the population. This could help allay the fears of some employers that the passage of parity would increase costs as patients flock to use mental health services. A few of the plans’ members saw increases in out-of-pocket spending, but more than half saw decreases ranging from 15% to 28% (approximately $25 to $68 per enrollee per year), the report found.

The passage of the 2008 parity act has been impetus for change in other parts of the market as well, Greenberg said. The State Children’s Health Insurance Program, which provides health insurance to children in low-income families, now requires parity, as well as some state Medicaid plans. President Obama’s healthcare reform, signed in March, added parity requirements for the state exchanges that will make health insurance available to individuals and small businesses in 2014.

“I think the passage of parity helps reduce the stigma [of mental illness] because it is being treated like a medical condition,” Greenberg said. He said he’s seen an uptick in attention to mental health and addiction —”making them much more accepted than they had been prior to parity passing.”

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