Mental health parity gets closer to reality: Bill requires equal coverage in health insurance

Local mental health advocates are applauding a U.S. Senate bill passed last month that would require equal health insurance coverage for mental and physical ailments when policies cover both.

The bill, which passed unanimously, moves advocates one step closer in their long-fought quest for a concept known as mental health parity.

Mental Health America, formerly known as the National Mental Health Association, praised the passage as an opportunity to end discrimination against people with mental health disorders.

Steve McCaffrey, president and CEO of affiliate Mental Health America of Indiana, concurred.

“For so long, mental illness has been seen as tantamount to being possessed by demons,” he said. “People believed that they just needed to pull themselves up by the bootstraps and they would be fine. The passage of parity is the final recognition that this is a medical disorder.”

In 1996, the late Sen. Paul Wellstone, D-Minn., and Sen. Pete Domenici, RN.M., won passage of a law forbidding plans that offer mental health coverage from setting lower annual and lifetime spending limits for mental treatments than for physical illnesses.

The current Senate bill and a House version that should receive a vote yet this month would build on that law by adding elements such as co-payments, deductibles and treatment limitations.

Most states, including Indiana, already have some sort of parity law on the books. Originally, the Senate bill would have overridden state parity laws, but the language caused a rift between supporters of the House and Senate bills.

Senators dropped the provision, but advocates still favor the House bill because it specifically says state laws will not be pre-empted. In addition, the House version specifies that a plan must cover all diseases included in the Diagnostic and Statistical Manual-IV published by the American Psychiatric Association.

That is what psychiatrists use to diagnose mental illness and is very inclusive. The Senate bill, like Indiana’s law, allows insurance plans or employers to determine what is covered rather than mandating coverage.

“I like the idea of broad coverage that is well-defined and specific,” said McCaffrey in defense of the House version, “but we’re supportive of either [bill], understanding the insurance community and the business community want a hand in saying how they want to define their packages.”

The Senate bill has the support of the Washington, D.C.-based America’s Health Insurance Plans, a trade group representing 1,300 providers. The organization said in a written statement that the bill provides coverage without undermining innovations in behavioral health services or imposing costs on employers that would make it difficult for them to continue providing benefits.

Business groups support the Senate bill as well. The U.S. Chamber of Commerce said the legislation provides a “delicate” balance that allows employers and health plans to comply with the new requirements while preserving plandesign flexibility.

The House mandate to cover all diseases included in the APA manual is one of the major reasons the Chamber backs the Senate version, said David Holt, vice president for health policy and federal relations at the Indiana Chamber of Commerce.

“Every time you add coverage, the insurance companies shift the premium onto [businesses],” he said. “Then there are more uninsured because smaller companies that can’t afford it drop out.”

For business leaders, insurance mandates long have been a thorny issue. To their displeasure, Indiana lawmakers in recent sessions have failed to pass legislation that might make coverage more affordable by stripping certain mandates from insurance plans.

A state insurance parity law has been in place since 1999, however, and has been amended several times in the ensuing years.

In 2003, for instance, an amendment required employers who provide coverage for treatment of mental illnesses to also provide coverage for the treatment of substance abuse or chemical addiction if it is necessary for the treatment of a mental disease.

The law applies only to companies with more than 50 employees, and requires employers to simply offer such provisions instead of making them a required part of any employee benefit package.

Last year, lawmakers included mental health parity in Gov. Mitch Daniels’ Indiana Check-Up Plan that leverages a 44-cent cigarette tax hike to provide health insurance for 132,000 working poor Hoosiers.

McCaffrey at Mental Health America of Indiana said advocates fought hard to include mental health and substance abuse parity in the bill, and thinks Indiana may be the only state that provides full parity in its coverage.

Edward Kennedy, D-Mass., sponsored the federal Senate bill along with Domenici and Mike Enzi, R-Wyo.

Kennedy’s son, Rep. Patrick Kennedy, a Rhode Island Democrat who has battled depression, alcoholism and drug abuse, and Rep. Jim Ramstad, a Minnesota Republican who is a recovering alcoholic, are championing the House bill.

It is estimated that 26 percent of American adults, or 58 million people, suffer annually from a diagnosable mental disorder, but only a third receive treatment.