2001 goal: strengthen federal and state MH parity laws
March 1, 2001
Thirty-three states now offer parity legislation to their citizens which presumes that benefits for mental illness will be equal to physical illness.
But these promises have failed to satisfy Americans who believe major inequities persist.
While the principle of creating parity between mental and physical illness is laudable, the results todate have disappointed. Insurance interests have undermined mental health advocates’ penchant for strong legislation. The claim that equal benefits for physical and mental illness will be too costly has been repudiated by mental health interests but has not satisfied the opposition lobby. The General Accounting Office (GAO) initially estimated that the law would have a “negligible effect” on health insurance costs, and explained that a more comprehensive law requiring full parity could lead to “cost increases of about 2%-4%.
Congress will face a day of decision this year, either to renew or drop the Mental Health Parity Act of 1966 whose five-year life expires Sept. 1. Both sides have been preparing for battle for the past year.
The crux of the issue on the mental health side centers on differences between the National Alliance for the Mentally Ill (NAMI) and organizations such as the American Psychological Assn. NAMI favors coverage for severe biological mental disorders. APA counters that the definition of “severe” is too limiting and that individuals with mental disorders of any type seeking treatment should be entitled to it. Thus, many state laws include NAMI’s interpretation which includes among others, schizophrenia, paranoia, major depression and bipolar disorders, but would sacrifice reimbursement for the treatment of alcoholism and drug addiction.
Legislation which began to surface last year in anticipation of the expiration date in September include bills by Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN) juxtaposed to a bill by Rep. Marge Roukema (R-NJ) Roukema’s version is the more inclusive and is favored by APA because it would cover all mental illnesses. The Domenici-Wellstone variant would be limited to biologically-based mental illnesses.
Group health plans may not set annual or lifetime dollar limits on a person’s mental health care that are lower than the limits for general medical and surgical services. But last May, the General Accounting Office (GAO) reported that employers in 14 states were not complying with these federal standards. Most of the companies, by their own account, had lifetime limits on mental health benefits of $100,000 or less, but set higher ceilings for medical and surgical benefits.
The GAO report made plain that a simple extension of the 1996 federal parity act will not suffice, and that major corrections will be needed to end discrimination. The crux of it is that employees and their dependents claim they have seen only minor changes in their health benefits and that access to mental health services has not increased.
Thus, the focus has now shifted to broadening the law when the current act expires because 87% of health plans are said to continue to restrict mental health to a greater extent than physical benefits.
The key players this year will again include Sens. Domenici and Wellstone, and Rep. Roukema. Add to that list Rep. Ted Strickland (D-OH), a member of the Commerce Committee, who will be replacing former Rep. Robert Weiss, who has been elected governor of West Virginia.
When a parity bill was contemplated in California in 1999, it defined eight biologically-based severe mental illnesses to qualify for parity coverage–schizophrenia, schizoaffective, bipolar, obsessive-compulsive, panic disorders, major depression, bulimia or anorexia. The mental health community, including the California Psychological Association, sought coverage for all medically necessary mental health services. While both sides argued vehemently about the cost differential, a PrinceWaterhouseCoopers actuarial analysis determined a nine cent per month difference between these opposing slants.
Nationwide, inequities in parity coverage persist. One company health plan may specify that an individual can receive no more than 30 inpatient days in a psychiatric hospital. Others limit the specific number of outpatient visits per year. Companies can decide to raise the co-payment required at each visit and can do so unequally. Thus, a patient may be required to pay 10% of a medical bill while owing 50% or more of a psychologist’s bill.
Companies can also opt out of the law. A business or industry’s first 50 employees need not be covered by the federal law. In state laws, however, coverage may be mandated for firms with more than 25 employees.
Meanwhile, the insurance-benefits industry is concerned that the federal and state legislative gyrations, accompanied by continuing premium increases, will cause employers to drop coverage.
In one of his last major acts, President Clinton issued an executive order which offered the nation’s nine million federal employees improved mental health benefits equal to those for physical ailments. But whether the past parity loopholes remain or will be eliminated for federal employees is uncertain.
The Rand Corp. has recently completed two studies which conclude that both access and quality of care have declined since the enactment of mental health parity laws. Among Rand’s findings:
- The new laws have not triggered an increase in the use of mental health services.
- Individuals with probable mental health disorders lost insurance more often than they gained insurance between 1996 and 1998.
- Individuals with severe mental illness who live in states with parity laws are not more likely to use their services than other severely mentally ill in nonparity states.
According to the studies, changes in access and care may be attributable to loss in coverage by the mentally ill or changes in the insurance market. In response to these laws, the insurance market has shifted toward a more aggressive managed care approach for mental health care than for general medical care.
Despite the passage of many mental health parity laws, these studies conclude that insurance coverage remains a problem for those at risk for mental health disorders.
(Source: Rand abstracts of “Mental Health Parity Legislation: Much Ado About Nothing” and “Health Insurance May be Improving–But Not For Individuals with Mental Illness–www/ncpa.org/pi/health/hedex13.html)
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