Law Equalizes Coverage For Mental, Physical Care
Friday, October 10, 2008
An estimated 113 million Americans, including hundreds of thousands in the Washington region, will receive better insurance coverage for their mental health and substance abuse problems because of landmark legislation that for the first time requires mental and physical illnesses to be treated equally.
The law is a culmination of a decade of lobbying and negotiating among advocates for the mentally ill, the insurance industry, the business community -- including the U.S. Chamber of Commerce -- and doctors' groups. The change, which was included in the economic rescue package signed by President Bush last week, will take effect Jan. 1, 2010, for most plans. Businesses with 50 or fewer employees would be exempt.
For decades, insurance companies could offer less coverage for the treatment of depression, anxiety and bipolar disorder than of such diseases as cancer and diabetes -- so people with mental illness or substance abuse problems often had to pay for expensive treatment and medication out-of-pocket.
The new law bars companies from setting higher co-pays or deductibles for mental health and substance abuse treatment. Plans also will be prohibited from lowering benefit levels or restricting the number of outpatient therapy sessions or hospital treatment days. And if a health plan allows out-of-network visits for the treatment of physical illnesses, it will also have to offer identical out-of-network coverage for mental health care.
Advocates and experts said the change represents a fundamental shift in how the mentally ill are treated and could bring medical parity to tens of millions of people.
"This is absolutely milestone legislation for those people who have mental health and substance abuse problems," said Doug Walter, counsel for legislative and regulatory affairs at the American Psychological Association. "It ends the discrimination against people who have long needed the help."
The result, experts said, will be a significant expansion of services for the mentally ill. According to a nationwide survey this year by Harris Interactive in conjunction with the APA, 44 percent of Americans either do not have mental health coverage, or are not sure if they do.
Centreville resident Jackie Dantonio experienced the disparity two years ago when one of her children needed therapy for depression. She said that her insurance plan offered only 10 therapy visits a year and that she and her husband paid nearly $2,000 to ensure that the child got all of the visits the doctor said were needed.
"We were shocked. . . . We had no clue there were these differences," she said. The therapist initially wanted to see the child a few times a week, which quickly used up her covered visits, she said. "We were lucky we could afford to get . . . the help."
In the Washington region, the law will have the most impact on District residents because the city does not have any mental health parity laws on the books. Virginia and Maryland already require parity with some kinds of health plans. The change means that more than 480,000 District residents who have insurance will have access to equal coverage, according to Healthcare Visions, an Atlanta-based research firm. The law could affect an estimated 1.7 million people in Virginia and about 1.5 million in Maryland.
In addition, only a few mental health ailments are covered now under Virginia law; the federal legislation will require that more conditions be included.
Early in the organizing of the bill, opponents raised concerns that the law would increase premiums for all insurance holders. But the Congressional Budget Office found that the requirement would probably increase premiums by an average of about four-tenths of 1 percent.
"Millions of Americans will now be assured greater access to mental and behavioral health coverage while continuing to benefit from the innovative programs health plans have developed to promote high-quality, evidence-based care," Karen Ignagni, president of America's Health Insurance Plans, a Washington-based trade group, said in a statement.
Advocates said the law is also an important step in erasing the stigma often associated with such illnesses as post-traumatic stress disorder or anxiety-related conditions. "The bill normalizes mental illness and recognizes these are biologically based conditions, not bad parenting or being mentally weak," said Mira Signer, executive director of the Virginia chapter of the National Alliance on Mental Illness. "It puts these conditions on par with everything else."
Other supporters cited recent studies showing that employees who receive treatment for mental illness or substance abuse perform better at work. "It makes good business sense as well," said Laurel Stine, a lobbyist for the Bazelon Center for Mental Health Law.
The law has significant limitations, however. Carriers that do not offer mental health treatment in their current plans will not be forced to begin doing so. Insurers also will not be required to cover treatment for every condition listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV), published by the American Psychiatric Association, as advocates had wanted.
And some proponents said they were concerned that the law might have unintended consequences, such as the possibility that some businesses may forgo offering mental health benefits altogether.
"Small businesses may say that they can't afford, or think they can't afford, to offer mental health coverage," said Carol Ulrich, a member of Virginia's Commission on Mental Health Law Reform. "That's the only potential downside I see."