More States Requiring Mental Health Benefits For Insurees

WASHINGTON — More and more states are requiring that health insurers cover the costs of mental illnesses as well as physical ailments,  but so-called “mental health parity” laws are not all created equal. The laws exist in 25 states and range from measures that require coverage of all mental health and substance abuse problems — Vermont has one of these — to bare bones versions whose scope is limited. One of these passed the Nevada legislature last week and now awaits the signature of Gov. Kenny Guinn.

Studies show that the cost to insurers to provide mental health care to members is minimal. Premiums would rise about $1 per person per month for comprehensive bills with unlimited coverage, a recent study in Nevada by the private accounting firm PricewaterhouseCoopers said. But each state that has adopted a so-called parity law has done so only after a fierce political battle. Only three states — Maryland, Minnesota and Vermont have comprehensive laws.

“A lot of the limited parity bills define a laundry list of what is covered. That leaves a lot open to interpretation,” said Jennifer Heffron, director of public policy at the Alexandria, Va.-based National Mental Health Association.

The association breaks parity bills into three categories — comprehensive parity, coverage of mental health and substance abuse treatment with no limitations; full parity, which excludes coverage of substance abuse treatment; and limited parity, which include exemptions or limit treatment only to those people with severe mental illnesses.

Two states have full parity laws — Georgia and Indiana.

Twenty more — soon to be 21 with the addition of Nevada — have limited parity laws. They are: Arizona, Arkansas, Connecticut, Colorado, Delaware, Maine, Missouri, Montana, New Hampshire, Nebraska, New Jersey, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas and Virginia.

“We find (limited parity bills) to be a trend where a lot of states are going — or where they end up. They find that substance abuse is such a politically charged issue,” Heffron said.

Five of the 25 states with parity laws — Virginia, Montana, Nebraska, New Jersey and Oklahoma — adopted them this year. Virginia’s law provides full parity for mental health and substance abuse treatment, but exempts small employers from having to offer the benefits. Montana, Nebraska, New Jersey and Oklahoma have also passed full or partial laws.

The bill awaiting signature from Nevada’s Gov. Guinn requires health insurance providers to allow patients with severe or biologically-based mental illnesses up to 40 days of hospitalization a year and 40 visits to a psychiatrist or other counselor.

Illnesses that would fall into this category include those defined in the American Psychiatric Association’s Diagnostic and Statistics Manual, which provides an updated definition of “mental illness,” each year. It currently includes schizophrenia, schizoaffective disorder, delusional and bipolar disorders, major depression and obsessive-compulsive disorders.

The bill would not include treatment of trauma-based illnesses, nor would it require that companies with 25 employees or less be required to buy the mental health coverage.

Dr. Gary Lenkeit, a Las Vegas psychologist who lobbied heavily for full parity in Nevada, said that the bill awaiting Guinn’s signature is a scaled-down version of the original bill that passed both the Assembly and Senate that would have provided full parity.

“This bill says we will cover biologically-based illnesses, but not trauma-based illnesses such as an abused child, someone who is raped or someone with a difficult adjustment. In the world of physical health that would be like saying we will cover diabetes, but not a broken arm,” Lenkeit said.

“In a situation like at Columbine, children who needed counseling wouldn’t be covered by the bill in Nevada,” he said.

Tracy Delaney, a policy associate with the Health Policy Tracking Service, a component of the National Conference of State Legislatures, said that the mental health legislation is getting increasingly complex, with more exclusionary provisions than used to be the case.

Insurance companies say that small increases in premiums needed to provide mental health coverage may not seem significant to the public, but they are raising the cost of health insurance, putting up yet another barrier in insuring the 43 million Americans without any insurance.

The Washington D.C.-based Health Insurance Association of America, a health insurance trade association, is against all mandates that increase the cost of health care coverage.

“We take no issue with the merits of any particular mandate; nevertheless, we believe that society’s top domestic priority ought to be how to finance care for the millions of Americans who have no coverage,” said HIAA spokesperson Richard Coorsh.

For the Clinton administration, providing mental health parity is a high priority. At a White House Conference on Mental Health today (Monday), host Tipper Gore will announce that federal workers and their dependents will receive full coverage of mental health and substance abuse disorders through the Federal Employees Health Benefits Program.

Mrs. Gore, the spouse of Vice President Al Gore, recently disclosed that she underwent treatment for depression after her son suffered near-fatal injuries when he was struck by a car.

The new standards for federal workers would not allow private insurers serving the workers to set limits on hospital stays or outpatient visits that are more strict than for physical illness. The policy would also ban co-payments for mental-health care that are more expensive than those for treating physical ailments.

“Mental health parity for federal workers will give new momentum to parity legislation pending on Capitol Hill,” said Michael M. Faenza, president and CEO of the National Mental Health Association.

Federal bills on the issue include The Mental Health Parity Act Amendments of 1999, sponsored by Reps. Marge Roukema (R-NJ), Bob Wise (D-WVA), and Peter DeFazio (D-OR). The bill would eliminate discriminatory practices against people with all mental disorders and would affect nearly all private insurance policies in the United States.