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Mental Health Parity Advance, But Probems Lie Ahead

March 6, 2008 - by Donny Shaw

A bill to boost mental health insurance coverage, which has stalled in the last few Republican-led sessions of Congress, is finally moving forward towards becoming law. The Paul Wellstone Mental Health and Addiction Equity Act of 2007 passed the House yesterday by a vote of 268-148.

WebMD:

>The House passed a broad bill guaranteeing better mental health coverage for people with private insurance Wednesday, handing a victory to patient and medical groups that championed the bill.
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>The bill enforces mental health “parity.” It forces insurance companies covering mental health treatment to offer the same level of coverage for it as they do for physical illnesses.
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>Current federal law requires insurers to cover the same amount of total lifetime spending for mental and physical diseases. But it leaves insurers free to charge higher co-pays and deductibles for mental illness treatment. It also lets them restrict the number of covered visits to a doctor or other mental health professional. Most insurance companies make use of such restrictions.

The Senate has also passed a version of the bill, but there are some differences between the House and Senate versions that are threatening to stop the bill in its tracks.

As I mentioned last week, the House bill would require insurers providing mental health coverage to cover disorders that some consider questionable. The bill requires that any health plan that provides mental health coverage include benefits for all disorders listed in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders. Critics call the list of disorders in the manual — including disorders like caffeine addiction, transvestic fetishism and air sickness — too broad. The Senate bill would leave the decision of which disorders to cover up to the individual insurance companies.

Some critics worry that this will lead to a secondary, but not less important, problem. The expansive list of disorders could drive up costs to insurers that have chosen to cover mental health treatment. Since the bill does not require insurers to provide mental health coverage (it requires ones that do to do so equally to their medical and surgical coverage), insurers may opt out of providing mental health insurance at all.

Moreover, the expansive list could undo progress in mental health parity that has been made on the state level. Currently, several states require insurers to cover mental health, but allow them to decide which disorders to cover. If the House bill became law, it would override these state laws, possibly raise costs to insurers and potentially cause them to use their new federally-authorized right to back out of providing mental health coverage altogether.

An article from SF Chronicle explains the effect this could have on mental health parity in California, where coverage is required form insurers.

>Because the federal bill would not mandate plans to cover mental health as they are required to do in California, such a law could raise rates and cause some employers to drop mental health coverage altogether.
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>"If you are a family in California with a member, a son or daughter with mental health issues, you could end up with nothing," said Andrew Sperling, director of legislative advocacy for the National Alliance on Mental Illness.
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>Sperling’s group supports a competing bill in the Senate, which was passed by that chamber in September and is now in the House.

As I see it, given the above concerns, there are several questions that need to be asked as the House and Senate bills go to reconciliation. First, does an expansive list of mental health disorders actually lead to increased costs for insurers, or will expanded treatment have enough of a preventative effect as to outweigh any new costs in long-term reductions elsewhere? Can we trust the insurance companies to create their own lists of covered disorders so that Senate-style parity legislation has a positive impact on mental health coverage? Can we leave these questions to be worked out by the market?

Any answers? Other questions to raise? Leave them in the comments.

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Comments

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