Mental health parity law implementation evolves
Filed under: Government, Health care reform, Hot Health Headline
Writing for Kaiser Health News and The Washington Post, Sandra Boodman considers the effect that the American mental health parity law has had since it went into effect on Jan. 1.
The law applies to about 140 million Americans, Boodman writes, most of whom are insured by employers with more than 50 employees. For qualifying groups, “Higher deductibles, steeper co-pays and other restrictions are no longer allowed for mental health and substance abuse treatment.” It doesn’t apply to individual policies and doesn’t require employers to offer mental health coverage of any kind.
There are still questions about the implementation of the law, many of which are addressed in the Obama administration’s implementation plan (PDF), which should take effect on July 1.
Officials of key business and insurance industry groups said they were displeased that the regulations were “more expansive” than they believe lawmakers intended. Mental health advocates applauded the rules, which they said would help ensure that Americans battling schizophrenia, for example, receive the same level of care provided to those facing leukemia.
Federal officials estimate that complying with the law will increase premiums nationwide by four-tenths of 1 percent, or about $25.6 billion over 10 years. Employers are free to drop mental health and substance abuse coverage and are allowed to manage claims to determine if treatment is medically necessary, just as they do now for physical ailments, but the standards can no longer be more stringent. Plans are also allowed to exclude treatment for certain illnesses, such as eating disorders, as long as state law does not mandate coverage. There is also an escape hatch: Plans that can prove that their costs increased by more than 2 percent in the first year can file for an exemption.
Fortunately, it looks like that sort of cost increase will be rare, based on research that shows similar rules improved access without increasing cost.
For some background on the mental health parity law, check out MIWatch.org.
Learning from Calif.’s mental health parity law
On the Los Angeles Times Booster Shots blog, Shari Roan writes about a recent scholarly review of California’s mental health parity law that illuminates lessons that will be key to the success of the upcoming national mental health parity law. The California law has been in place for five years.
Roan summarizes the most important of these lessons, including the accuracy of price estimates and the lack of public awareness about the program. The study considers the views of consumers, insurers and providers as well as the public at large.
The national mental health parity law, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (HR 6983), is intended to prevent discrimination against patients seeking treatment for mental illness by prohibiting “insurers and group health plans from imposing treatment or financial limitations when they offer mental health benefits that are more restrictive from those applied to medical and surgical services.”
However, as MIWatch.org reports, the three federal agencies that are supposed to write the regulations to implement the act missed an Oct. 3 deadline. The law will go into effect in January.
Equal treatment for mental health in peril
Phyllis Vine of MIWatch.org, a site about mental illness, writes that last year’s mental health parity legislation has run into problems. According to Vine, if federal rules for implementing the Wellstone-Domenici Mental Health Parity and Addiction Equity Act are not in place by the Oct. 3 deadline, treatment for many could be delayed or stopped.
The act requires insurers to treat mental illness the same way they do physical ailments, eliminating higher co-pays, deductibles and limits on hospital stays. Vine provides some background:
We should recall that parity was hotly debated before two bills (HR 1424 in the House, S 558 in the Senate) were folded into last year’s stimulus package. It was an initiative supported by a unique collaboration between advocates in the mental health community and those in the addiction community, with coverage extending to the self-insured and to those in Medicaid managed care. The House initiative, led by Reps. Patrick Kennedy and Jim Ramstad, wanted to base treatment criteria on the American Psychiatric Association’s Diagnostic and Statistical Manual. Insurance and business were able to determine that the Senate’s bill allow them to define “medical need.”
Vine writes that insurance companies are now trying to sabotage the law in an attempt to preserve profits. Letters from the American Benefits Council and Wellpoint Inc., sent during the public comment period, ask for exclusions of some conditions, treatments, providers and limits on the number of visits patients can make.
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