Mental Health Insurance Parity in the U.S.?

One of the big issues in the U.S. autism communities right now is health care. Without insurance coverage, most people don’t really have health care, so healthcare=insurance for all practical purposes.

People with autism can be expensive from a health care perspective. The most obvious examples of this are for children who need occupational, speech and, sometimes behavioral therapies. Even just counting the speech and occupational therapies, bills can hit $20,000 or more a year for a single child.

Insurance plans tend to exclude these therapies for one reason or another. “Developmental delays” aren’t covered, for example. Since autism is often covered under mental health, there are multiple ways to not give coverage.

This has led some states to implement “Mental Health Parity” acts. These require an insurance plan to give the same coverage for Mental Health as for regular health issues. So, if, say, a stroke victim would be given speech therapy 3 times a week for years to help recover speech, the insurance plan would have to give the same therapy to a person with autism (to pick the example most people reading this blog would key in on).

There are two big problems (and a lot of little problems) with this. First, and most obviously, only a few states have implemented Parity legislation. So, if you are in California, you may have coverage, but if you are in, say Nevada (right next door) you probably don’t.

There has been a big push this year to get more states to join in. But, even if all the states had Parity laws, there’s still another big fly in the ointment: big companies don’t need to follow state laws on insurance.

Yep. Let’s say you work for ReallyBigCompany in a state with a Parity law. You think, “Aha, they just passed a law, I’m in!”. Not if ReallyBigCompany is what’s called “Self Funded”. That’s where the company insures itself. In that case, they fall under a U.S. Federal law: ERISA.

It get’s confusing quick, but at a simple level, large companies have a loophole to get out of covering autism.

If only the Federal laws (ERISA) had mental health parity.

Enter Patrick Kennedy, congressman from Rhode Island. He has sponsored H.R. 6983, The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act.

This act sets out to

…amend section 712 of the Employee Retirement Income Security Act of 1974, section 2705 of the Public Health Service Act, and section 9812 of the Internal Revenue Code of 1986 to require equity in the provision of mental health and substance-related disorder benefits under group health plans, and for other purposes.

The Employee Retirement Income Security Act being…ERISA.

Yep, it’s possible that there could be a big change in the insurance world.

The bill has passed the House. According to DrugMonkey, the bill has been added to the economic bailout package in the Senate.

According to Speaker Pilosi’s website.

An Overview of the Bill’s Key Provisions

Requires equity in financial requirements. Under the bill, an insurer or group health plan must ensure that any financial requirements – such as deductibles, copayments, coinsurance, and out-of-pocket expenses – applied to mental health and addiction benefits are no more restrictive or costly than the financial requirements applied to comparable medical and surgical benefits that the plan covers.

Requires equity in treatment limits. Under the bill, a group health plan must ensure that the treatment limitations – such as frequency of treatment, number of visits, and days of coverage – applied to mental health and addiction benefits are no more restrictive than the treatment limitations applied to comparable medical and surgical benefits that the plan covers.

Does not mandate mental health benefits. The bill does not mandate insurers or group health plans to provide any mental health coverage. The bill’s provisions only apply to plans that choose to offer mental health coverage.

Exempts certain businesses. The bill exempts small businesses with 50 or fewer employees. It also exempts those businesses that experience an overall premium increase of 2 percent or more in the first year and 1 percent in subsequent years.

Does not mandate out-of-network benefits. The bill simply states that if a plan already offers out-of-network benefits, it must offer out-of-network benefits on the same terms for mental health services as it does for medical and surgical services.

Does not pre-empt stronger state parity laws. The bill establishes a federal floor but permits states to go further to protect their citizens. This bill would not supersede any state law that provides consumer protections, benefits, rights, or remedies stronger than those in the bill.

Explicitly permits medical management of health benefits. The bill allows the use of medical management tools that are based on valid medical evidence and pertinent to the patient’s medical condition so that specific coverage is not arbitrary in its application and more transparent to the patient.

Provides for enforcement. The bill provides remedies to protect beneficiaries’ rights and permits enforcement of the bill’s equity requirements by the Internal Revenue Service, the Department of Health and Human Services, and the Department of Labor.

This appears to this reader to include a classic loophole: the “carveout”. Note that: “The bill does not mandate insurers or group health plans to provide any mental health coverage“. That means (a) your company can opt to only offer regular health insurance and (b) (the biggie) they could offer two health plans, mental health and regular health.

Why is that important? If you have two plans, there is no parity. It’s more strange legal stuff, but let’s do this as an example: Your company offers you ReallyBigCompany_Health and ReallyBigCompany_MentalHealth as two separate plans. The whole idea of “Parity” is that you get the same benefits for the mental health conditions as for regular health–in the same plan. Since your mental health plan (in this example) is not the same as your regular health, you have no regular health benefits to compare with.

That took me a while to get, so don’t worry if you are confused the first time.

Bottom line–it is possible that the insurance outlook in the U.S. could take a big change. I know people who have been trying to get confirmation that autism is covered in this bill. Unlike some State laws, the Federal law doesn’t specifically name any conditions. This should be a good thing, since, for example, they can’t say, “the law says Autism, and you have PDD-NOS…sorry”.

This is something to watch.