When Whitney Watriss' 14-year-old stepson was hospitalized for a month, her health maintenance organization (HMO) in the District said it would not pick up a penny of the $5,000 tab.
The reason: He was an alcoholic being admitted to a detoxification program.
When William Joseph Dixon, a 62-year-old former counsel of the House Commerce Committee, was hospitalized seven years ago, his insurance company would not pay for his hospital bill of approximately $4,000.
The reason: Dixon's insurer said that his treatments for alcoholism and chronic depression were unnecessary.
Diane Hill's 32-year-old husband, a D.C. police officer for six years, was admitted to Washington Hospital Center for several weeks. Their insurer refused to pay any of Hill's approximately $5,000 bill.
The reason: Hill was placed in a psychiatric ward for depression after going through a week of alcohol detoxification, and the insurer would reimburse him only for the detoxification -- not for the mental health treatment.
"I was shocked," Diane Hill said. "We're in a high-option family plan. The doctor said the [mental health] treatment was necessary, and [the insurer] would not pay for it."
Like these patients, thousands of District residents are excluded from any health insurance coverage for mental health and alcohol and drug abuse, according to D.C. City Councilman John Ray (D-at-Large). In two of the cases mentioned above, the insurance companies settled and paid part of the claims, but only after considerable efforts by the insured.
Ray has introduced legislation that would require all health insurance policies and HMO membership contracts written or issued in the District to provide benefits for the treatment of these specific problems.
Ray's bill has pitted the mental health community against the Washington area's business community and health-care providers in a heated battle over whether the government should force companies to offer certain health insurance benefits. The legislation is pending in committee and will likely be voted on in the fall.
"It's a very hot issue in town," said Dindy K. Weinstein, executive director of the National Capital Area Health Care Coalition, which opposes the legislation.
Weinstein's group is fighting mandatory health-care benefits because it wants the choice of specific health-care benefits to be left to the businesses providing insurance.
"Employers should be free to respond to identified needs in their communities, and employes should be able to bargain for the specific types of benefits they most want," said Weinstein. The key issue is not whether mandated insurance for mental health, alcohol and tobacco treatment is a good or needed benefit, Weinstein added.
"It is whether employers should be required to offer, and employes required to accept, insurance coverage for particular services, rather than being able to select the specific types of insurance benefits that are more appropriate to their particular situation," Weinstein said, pointing to insurance coverage for maternity benefits, preventive care or prescription drugs.
The Health Insurance Association of America, a trade association of health insurance companies that also opposes the measure, agreed that many employers give up more desirable benefits when they have to comply with the mandated benefit coverage. "What if an employer has an employe population comprised largely of people not of child-bearing age?" asked Karen Clifford, the association's counsel. "He is forced to cover them for maternity benefits, when quality dental and vision care is clearly more appropriate and necessary."
Requiring insurance benefits will raise the cost of providing insurance coverage, especially when employes overuse the benefit, the health-care coalition said.
But the Washington psychiatric community disputes Weinstein's concerns about increased costs.
Aiding employes with expenses for mental health, alcohol and drug abuse treatment is cost effective in the long run, according to the Washington Psychiatric Society. "The annual cost to employers for lower productivity, absenteeism, increased hospitalization and worker compensation claims is estimated at over $40 billion nationwide," said Lawrence Y. Kline, president of the society.
"When mental illness, alcoholism and drug abuse are treated, these costs are cut dramatically," said Kline, who wants Ray's bill to go even further in its required benefits.
Kline said that a stigma is attached to alcoholism, drug abuse and mental illnesses that is not connected to cancer, heart ailments and other disorders, including those that are "clearly untreatable, incurable and extraordinarily expensive to treat.
"This stigma is increased by discriminatory health insurance restrictions, including those imposed by health maintenance organizations, which purport to treat all illnesses," Kline said. "Alcoholism, drug abuse and mental illness are real, objectively definable and treatable diseases that no one chooses or anticipates."
Health insurers, however, questioned the motives of Kline's group at a hearing last month on Ray's bill. The Health Insurance Association of America called the bill "a way of assuring the psychiatric community of a steady flow of both clientele and fees."
"There is no consumer outcry for mandatory coverage in this area," said Clifford of HIAA, labeling the measure "a special-interest bill designed to benefit a small group of health-care providers at the substantial detriment of the health-care consumer."
Not everyone who supports the proposed legislation stands to benefit from it directly, however. Rabbi Eugene Lipman, acting executive director of the Interfaith Conference of Metropolitan Washington and a member of the Coalition for Adequate Mental Health, Alcoholism and Drug Abuse Services, testified at the July hearing on the bill that "treatment of all individuals plagued with such illnesses has become a necessity for the long-term health and welfare of the entire community." Lipman strongly supported the bill as a step in the right direction.
The Greater Washington Board of Trade has joined Weinstein's group in fighting the legislation, contending that the type of illnesses companies choose to insure should be left to the marketplace.
"We do not believe that it is the legitimate role of government in this instance to require that corporations or individuals purchase certain coverages," said John M. Jacquemin, president of MTV Leasing Corp., who represented the Board of Trade at a recent hearing on Ray's bill. "The purchaser should be given a choice."
"While we appreciate the laudable goals of [Ray's bill], we continue to have many concerns, aside from the fact that this legislation would result in some rather substantial cost increases, which would cause employers to drop other coverages or eliminate their health insurance coverage altogether," said Jacquemin.
For drug and alcohol treatment, insurers and HMOs would be required to provide annual coverage for at least 12 days of detoxification; 28 days of follow-up care in non-hospital residential facilities, and 30 outpatient visits.
For mental illnesses, Ray's bill requires that insurers and HMOs provide annual coverage for at least 60 days of inpatient or residential care and at least 50 outpatient visits. The legislation also provides for an extension of care for another 30 days of inpatient or residential care and another 25 outpatient visits if a professional peer review committee determines that an interruption of treatment "would cause serious and irreversible harm to the patient."
"Who decides when someone no longer needs psychiatric care?" asked Clifford of HIAA. "In most cases, it is the provider that will determine when treatment should end."
While many other states already have laws mandating insurance coverage for alcohol and drug abuse, opponents say the District measure would be the most liberal.
"To the best of my knowledge, there is no other state that requires health insurance benefits to this extent," said Weinstein.
The National Institute on Alcohol Abuse and Alcoholism said that 21 states required alcohol coverage as of the end of last year. The National Association of State Alcohol and Drug Abuse Directors has reported that 10 states have mandatory laws requiring drug abuse coverage.
In addition, 14 states, including Maryland and Virginia, have made mental health coverage mandatory, according to the National Institute of Mental Health. Maryland law mandates that all health insurance policies provide coverage for acute mental illness and emotional disorders at a rate not less than 50 percent of that provided for other illnesses. Virginia law requires a minimum of 30 days of inpatient coverage, but does not mandate any outpatient coverage.
Maryland Sen. Howard A. Denis (R-Montgomery County) has introduced a bill to raise the rate even higher to 80 percent. "Why pay 100 percent for bellyaches and sniffles, and only 50 percent for schizophrenia?" asked Denis. "The present system is discriminatory."
"This coverage is the great fire extinguisher which can promote greater overall health at less cost," Denis said.
The health insurance industry is up in arms about state laws mandating benefits, disputing claims that such coverage will lower costs in the long term.
"At the very least, mandatory coverage legislation increases the cost of health insurance for everyone, limits diversity in the health insurance market and restricts consumer freedom of choice," said Clifford of the HIAA.
Clifford cited a January study by the Florida legislature concluding that "no matter how inocuous they seem when they are passed, laws mandating certain health-care benefits often counteract cost-containment efforts."
"Mandated benefits will only further contribute to the already burdensome inflationary spiral plaguing the existing health-care system," added Ronald L. Souders of the American Council of Life Insurance.
"Mandated benefit laws have had the negative effect of limiting the flexibility of employers and unions in choosing the mix of health-care coverage to be provided by employe benefit plans," Souders added. "These laws have required employers and unions to purchase unwanted and unneeded coverages, thereby contributing to the increased cost of health insurance and reducing the number of dollars available for other, more desired benefits."
Health insurance requirements will hurt employes rather than protect them, because companies will choose not to buy any health insurance and self-insure their employes rather than bear the cost of unwanted coverage, the health insurance industry says.
"One of the ironies of enacting mandated benefit laws is that they encourage employers to reject insurance and to provide self-funded plans to their employes," said Souders. "In this way, rather than creating more protection for employes, mandated health benefit laws may actually cause less protection. Employes and union members suffer because uninsured health benefits are inherently less secure, particularly in times of economic recession," he said.
Some unions also oppose legislation such as Ray's bill. Joslyn N. Williams, president of the Metropolitan Washington Council of the AFL-CIO, said that the union coalition favors expanded benefits but opposes "mandated benefits which interfere with the collective bargaining process."
The new legislation would also hurt the individual policyholder, who might be forced to give up health insurance protection because of the added costs of mandated benefits, health insurers say.
Opponents of mandated health insurance benefits say they are concerned that providing such coverage could open the door to overuse and abuse, especially in the case of outpatient mental health treatment.
"I think there is a misunderstanding between how much these services would be utilized," said Sen. Denis. "The perception in certain quarters is that the people who utilize these services are fakers as opposed to those who have more legitimate illnesses. This is simply a red herring."
If the D.C. Council votes in the fall to mandate health insurance benefits, the National Capital Area Health Care Coalition's fallback position is to push for controls on the mental health benefits to decrease the potential for overuse and abuse.
The compromise acceptable to the coalition would limit mandatory mental health benefits to acute mental illness and emotional disorders that can be "significantly improved through short-term therapy," 30 days per year of inpatient treatment and 50 percent of the benefits for other types of illnesses alotted for outpatient expenses. Similar restrictions limit mandated mental illness benefits in Maryland and Virginia.