Sebelius Releases Final Rules for 2008 Mental Health Parity Act

On Friday, HHS Secretary Kathleen Sebelius released long-awaited final rules on the 2008 Mental Health Parity and Addiction Equity Act, CNN reports (Christensen, CNN, 11/8).

The 2008 parity law -- championed by Sen. Edward Kennedy (D-Mass.) before his death -- requires health plans sponsored by larger employers to cover psychiatric illnesses and substance use disorders in the same way they do physical illnesses.

However, according to observers, the law lacked clarity on how parity is to be achieved, particularly when treatment involves intensive care at physician offices or long-term hospital stays.

Former Rep. Patrick Kennedy (D-R.I.), who was an outspoken advocate for parity legislation during his 16-year tenure in Congress, said the regulations were developed by the Department of Treasury, the Department of Labor and HHS (Goad, "RegWatch," The Hill, 11/7).

Details of Final Rules

According to Obama administration officials, the rules -- which specifically put into effect the 2008 parity act -- clarify how parity applies to residential treatments and outpatient care. They also ensure copayments, deductibles and limits on provider visits for mental health benefits are not more restrictive or less generous than those for medical and surgical benefits, including geographic or facility limitations. For example, under the rules an insurer "can't say you can only get substance [use disorder] treatment in state, but you can go anywhere for medical/surgical," an administration official said.

According to the New York Times, the rules affect about 85% of U.S. residents, including those who have employer-based coverage, other group coverage or coverage purchased in the individual market.

The final rules do not apply to Medicaid managed care plans. However, the Obama administration previously issued guidance that said health plans that manage care for Medicaid beneficiaries should meet the 2008 parity requirements. The law does not apply to Medicare, according to American Psychiatric Association lawyer Irvin Muszynski.

The Times reports that state insurance commissioners will be tasked with making sure insurers comply with the parity standards.

Although insurers in the past have raised concerns about the cost of complying with the parity act, experts say the rules are not likely to significantly raise the cost of coverage because few patients require lengthy and intensive treatment (Calmes/Pear, New York Times, 11/8).

Reaction

Patient advocates said they hope that the Obama administration will strengthen protections and encourage insurers to cover a broad scope of mental health services.

Andrew Sperling, an official with the National Association of Mental Illness, said, "We need strong requirements so patients and physicians can get access to this information" (Adams, CQ HealthBeat, 11/7).

David Wellstone -- son of the late Sen. Paul Wellstone (D-Minn.), who co-sponsored the 2008 law -- said, "I feel like it's time, and I feel it's true to my dad's legacy." He noted that the rules appear to contain "everything we've been battling to keep in the final rule, including scope of service, intermediate levels of care, transparency and a commitment to deal with managed care for folks on Medicaid."

Former Rep. Jim Ramstad (R-Minn.) also signaled that it is past time for final rules, saying, "It's high time we treat disease of the brain the same way we treat diseases of the body. The insurance companies have gotten by for too long with their discriminatory practices" (Williams, MinnPost, 11/7).

Parity Might Compromise Effect of Young Adult Enrollment

Requiring parity in coverage between mental and physical conditions could compromise a key assumption by the authors of the Affordable Care Act, USA Today reports.

The Obama administration has long held that enrolling millions of young adults in the ACA's health insurance exchanges will help offset the cost of covering older, sicker enrollees.

However, an analysis by data analysis firm BeyondCore of insurance records of 6.8 million people ages 18 to 35 found that 18% had been diagnosed with a mental health condition, such as depression or an eating disorder. The study also found that treating a young person for depression costs about $7,000, which is similar to the cost of treating an older person for high blood pressure. Further, the study found that physicians were twice as likely to diagnose someone with depression as they were for high blood pressure.

According to BeyondCore CEO Arijit Sengupta, the study shows that enrolling "[h]ealthy older people may be more important" than signing up young adults. However, he noted that catching mental health issues early could mitigate costs in the long term (Kennedy, USA Today, 11/6).