Since 2008, Insurers Have Been Required by Law to Cover Mental Health—Why Many Still Don't

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The Mental Health Parity and Addiction Equity Act -- which requires group health insurance plans that offer coverage for mental illness and substance use disorders to provide those benefits in no more restrictive way than all other treatments -- was signed into law almost five years ago. But significant hurdles are still preventing it from taking effect.

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In October 2008, Congress passed legislation designed to end longstanding insurance practices that discriminated against people with mental illness and drug and alcohol addictions. It was a landmark achievement, won after a dozen years of sustained advocacy by mental health advocates. Yet implementation of the Mental Health Parity and Addiction Equity Act of 2008 has been hobbled by a lack of clear guidance from the government, and final rules governing the statute have yet to be published.

The result is significant confusion over insurance companies' and employers' responsibilities under the law, which currently applies to 140 million Americans who receive health insurance from organizations with more than 50 employees. In too many cases, advocates claim, consumers still face barriers to getting recommended mental health and substance abuse services.

Beginning next year, the parity law's reach will become even broader. At that time, 32.1 million Americans -- people who newly enroll in state Medicaid programs, purchase healthcare coverage through online insurance marketplaces, and buy new insurance policies sold to individuals and small businesses -- will start to gain mental health coverage under the Affordable Care Act. Mental health parity will be required for all insurance policies of this kind, including those already in force, extending the federal law's protection to yet another 30.4 million people.

That makes an understanding of what constitutes parity more important than ever. The essential concept is that people who need mental health care should be on an equal footing with those who require medical care and not disadvantaged when it comes to insurance coverage.

Some of what this entails is beyond dispute: Under the federal statute, large employers aren't required to offer mental health benefits, but those that do can't charge patients more for mental health care -- higher co-payments, co-insurance, or deductibles -- than for general medical services. Nor can they set limits on treatments -- notably, caps on the number of visits -- that aren't in place on the medical side.

But several issues affecting access to mental health services and enforcement of the statute remain murky, according to advocates, mental health providers, insurance companies, and employers. State insurance commissioners are getting questions "frequently" about these and other concerns, said Sandy Praeger, the insurance commissioner in Kansas and chair of the insurance and managed care committee for the National Association of Insurance Commissioners.

A palpable note of frustration was evident at January hearings on mental health held by the Senate Committee on Health, Education, Labor and Pensions. "I am sad to say it's been four years, four years now, that we do not have any final rules on implementing this law," said Democratic Senator Tom Harkin of Iowa, chairman of the committee. "That's a shame."

Under questioning, Pamela Hyde, administrator of the federal Substance Abuse and Mental Health Services Administration, said "we are ready to produce a final regulation and we are in that process now," but declined to say when the regulation would become available. Also in January, President Obama committed to finalizing parity regulations in his package of executive actions to stem gun violence, also without specifying a date.

That's problematic because health insurers are currently preparing plans to be sold on state insurance exchanges being established under the Affordable Care Act. All plans must cover mental health and substance abuse services in a manner consistent with the federal parity act. If they are to become available for sale in October and effective in January, as expected, "it's really essential that we see a final rule on [the act] before April," said Democratic Senator Patty Murray, at the committee hearings.

Here is a look at key issues that await resolution in final mental health parity regulations:

Scope of Services. It is far from clear which mental health and substance abuse services must be covered by an employer who offers these benefits. In interim rules for the federal parity act issued in January 2010 the government outlined six categories of services: inpatient care and outpatient care (both in and out of network); emergency care; and prescription drugs. If services in any given category are covered on the medical/surgical side of the equation they have to be covered on the mental health/substance abuse side as well, it said.

However, this didn't clarify whether a full continuum of services is required or whether only a few services in each category are enough.

Insurers and employers claim that the federal statute did not address the issue intentionally. "We believe Congress did not intend the parity requirements to govern the types of services or settings of care that may be covered," America's Health Insurance Plans wrote in May 2010 comments on the interim rule.

"If rules get more prescriptive and [mental health/substance abuse] benefits potentially get more expensive, that could lead an employer to drop benefits altogether, and we don't want to see that happen," said Pamela Greenberg, president of the Association for Behavioral Health and Wellness, which represents companies that manage mental health and substance abuse benefits.

But advocates point to problems. Without more guidance on "scope of services," an insurer could "pick and choose services" it wanted to cover, leaving important categories of care excluded, said Dr. Henry Harbin, a psychiatrist consulting with the Parity Implementation Coalition, a group of provider and advocacy organizations.

Currently, a significant number of insurers don't cover residential services, partial hospitalization, or intensive outpatient care for people with mental illnesses or substance abuse disorders, even though this type of care is often deemed necessary by mental health providers.

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Judith Graham is a writer whose work has appeared in the Chicago Tribune, where she was a senior health-care reporter, as well as the The New York Times and The Washington Post. She is currently a mental-health reporting fellow with the Carter Center in Atlanta.

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