MENTAL HEALTH PARITY: Plans, Employers Find Loopholes
Taking a look back over the year since the Mental Health Parity Act took effect, the New York Times reports that the law -- intended to raise mental health coverage to a higher standard -- has been undermined by some health plans and employers eager to avoid higher costs. Although the law stipulates that group plans may not impose dollar limits on mental health benefits below those limits for physical illnesses, health plans have devised ways to skirt the parity requirement. Specifically, some health plans "have simply replaced the dollar limits for mental health care with numerical limits: on out- patient visits, treatment sessions or days in the hospital." But these limits "wind up being more restrictive in some cases than the dollar limits for which they substituted," explained Ronald Bachman of PricewaterhouseCoopers. The result -- less mental health care for patients -- is "definitely an unintended consequence" of the law, said Russ Newman, director of clinical practice issues at the American Psychological Association. Group health plans, for their part, are "distrustful of government mandates" and wary of offering care they perceive as "particularly vulnerable to abuse." While some health plans drive up copayments and deductibles for mental health care services, other companies trim mental health services using a different approach. The Times reports that Hewlett- Packard Co., for example, has imposed a lifetime limit of $1 million on medical services with no more than $300,000 on mental health services. Under the new law, explained health benefits manager Paula Wallace, "We now have a single lifetime limit of $1 million on physical and mental health benefits combined with no distinction between the two." Rep. Carolyn Maloney (D-NY) asserted, "While this level of benefits may be in technical compliance with the parity act, it clearly violates the spirit of the law." Law sponsor Sen. Paul Wellstone (D-MN) agreed, saying such loopholes would be addressed next year as he pushes for legislation "to require 'full parity,' covering copayments, deductibles and limits on hospital stays and outpatient visits" (Pear, 12/26).
New York State National Alliance for the Mentally Ill Executive Director Glenn Liebman wrote a letter to the editor of the New York Times in response to the article, asserting that 19 states have constructed legislation aimed to close the loopholes in the federal law. And, he writes, "there have been no major increases in cost for insurance coverage" in all 19 states. He explains, "A study last year by the Rand Institute found that the cost of adding mental health parity to most existing managed care plans ... would amount to an increase for insurers of only $1 to $7 per individual." Urging New York to pass a similar bill, Liebman notes that polls show more than 90% of New Yorkers support such legislation and 60% polled said they would be willing to foot the bill for the added coverage (12/30).