Parity legislation helps people with mental illness
More than one in four Americans will suffer a mental or addictive disorder at some point in life. Lawmakers have now granted them a level playing field in health insurance. Congress took a historic step when, as part of the financial bailout package, it passed legislation prohibiting insurers from discriminating against people with mental illness and addictive disorders.
This is great news for the 113 million Americans who faced unequal treatment under insurance plans that apply tougher benefit limits or higher copayments for mental illness or addiction treatment than they do for medical and surgical conditions.
For decades, science has been gradually lifting the curtain on mental illness and addiction, making effective treatment available for many disorders. With this watershed legislation, policymakers are helping to close the door on the age-old culture of stigma toward people with mental illness or addictive disorders.
The bill's passage may prove unexpectedly well-timed. With the economy in trouble, there will undoubtedly be more need for mental health services. Research shows that economic recessions lead to more family stress, suicides, drug abuse among teenagers and binge drinking.
News of the bill's passage was buried by the drama-filled bailout. Indeed, some derided it as an earmark tacked on to the package, like the one for wooden arrows. These comments were off-target. The parity legislation was not a random item sheltered by the rescue package.
Leaders in both houses had been vigorously discussing the bill for months, and had largely approved it. It was the culmination of years of bipartisan efforts by Sens. Ted Kennedy, Pete Domenici and the late Paul Wellstone, and Reps. Patrick Kennedy and Jim Ramstad, among many others.
Mental illness has long been a target for discriminatory practices in private insurance markets. As a result, starting in the 1990s many states, among them Washington, passed parity laws, and the federal government passed a limited law in 1996.
But those measures had large loopholes. States often exempted important diagnoses such as addictions and eating disorders. Moreover, 82 million people are covered by employers exempt from state regulation. As for the federal law, it banned only special dollar limits on mental health coverage, allowing plans to continue using other limits and exclusions.
A Brandeis University survey of private health plans found that more than 90 percent had special annual limits on outpatient mental health and addiction treatment, and 40 percent required substantial copayments (more than $20 per visit, or 20 percent of charges). Those provisions result in high out-of-pocket costs for patients needing longer treatments.
The new federal law improves on the 1996 one in a variety of ways. First, it applies to addictions as well as mental health. Addictions are one area where the public and the patient benefit considerably from treating the problem. Successful treatment should reduce crime, car accidents and emergency room use, all of which impose costs on society. Arbitrarily limiting addiction treatment makes little sense.
Second, the new law prohibits a wider range of discriminatory practices, such as the use of special limits on the number of days or visits per treatment episode or per year. Those changes should improve access and reduce the cost for many of the millions suffering from these disorders. However, large increases in utilization are unlikely under managed care. Plans retain the ability to deny or curtail treatment based on their review criteria (although they must now disclose those criteria).
The bill applies only to people with private insurance, but sets a good precedent for mental health coverage in any future expansion of coverage to the uninsured. It's tragic that people with mental and addictive disorders are overrepresented in this group.
With any luck, the bailout will avert an economic depression. But just in case, it's critical that many more people now have better mental health coverage to weather good times and bad.