More states institute parity for all mental health
diagnoses.
BY KATHRYN FOXHALL
Monitor staff
Three new states--Kentucky, New Mexico and Utah--have
passed laws requiring that health insurers provide coverage of
mental health on par with physical health for a broad range of
mental disorders.
That brings to 11 the number of states with requirements
for "broad-based parity"--that is parity that covers a broad
range of different diagnoses. In addition, North Carolina has
broad-based parity for state employees.
Eighteen other states have laws that require parity for
severe mental illnesses (SMIs) only, which typically means
schizophrenia, bipolar disorder and a few other diagnoses.
Several of the states with SMI laws expand that list to
include other circumstances.
The passage of the three new laws for broad parity stand in
contrast to last year's events: Of the12 states that passed
parity laws in 1999, only two required broad-based parity. The
rest required parity coverage only for SMI.
"The efforts of psychologists and others in these three
states demonstrate a growing concern that many people with
debilitating mental disorders are left unprotected by SMI
parity bills," says Marilyn Richmond, the APA Practice
Directorate's assistant executive director for government
relations.
The adoption of broad-based parity in three states is also
important in light of next year's scheduled rewrite of the
federal mental parity law, which has some major loopholes in
it, according to the APA Practice Directorate. The law does
not require parity in copayments and deductibles or keep
insurance plans from limiting visits or treatment days for
mental health; it only prohibits more restrictive annual or
life-time dollar limits on mental health coverage by plans
with more than 50 enrollees.
New Mexico, Utah take action
APA and other mental health organizations seek to close
those loopholes and make the federal law cover all mental
disorders. That hope was
bolstered in February when New
Mexico passed, and the governor signed, a law for coverage of
mental disorders benefits in general. One way the New Mexico
law differs from other state laws, however, is that it defines
"mental health benefits" to mean those mental health benefits
described in the group health plan or group health insurance.
In other words, the law does not require coverage of any
particular mental health disorders, but if insurers do cover a
disorder it must be on par with physical health coverage.
Then, in early March, the Utah state legislature passed its
mandate for equal coverage for any of a broad range of
diagnostic categories for mental health diagnoses that were
traditionally covered by Utah health insurance plans.
"The Utah law is significant because it is the first of the
state laws to use the 'catastrophic' model," says Michael
Sullivan, PhD, APA assistant executive director for state
advocacy. "That is, it covers out-of-pocket expenses that are
likely to bankrupt people who are the sickest, without regard
to diagnosis."
The Utah law allows insurers to have patients pay
out-of-pocket up to a certain level for treatment of mental
health and physical health problems. The mental health
out-of-pocket limit may not be more than the physical health
out of pocket limit. After the limit is reached, patients are
fully covered for expenses.
The Utah law's passage is also another landmark for
psychology. It was the first time a state psychological
association president was the sponsor of the legislation. Judy
Ann Buffmire, PhD, president of the Utah Psychological
Association, and a member of the state house of
representatives, fought for the bill in the face of strong
opposition from state business and insurance interests. But
when the legislation passed, both houses of the legislature
gave her bipartisan, standing ovations for her efforts.
"We are feeling good about it" says Buffmire. "We do have
something started. And we have been very clear that our move
will be toward full parity."
Kentucky's triple crowning
In April, Kentucky became the third state this year to pass
parity with broad-based coverage. That law requires that any
health benefit plan issued or renewed after the time of the
act's implementation will have parity for all mental
disorders. The law includes some exemptions to the parity
requirement. Small employer benefit plans and individual
health-insurance plans, for example, will not have to have
equal mental and physical benefits.
"We made the decision in the beginning that the legislation
would cover the broad range of mental illness diagnoses
including substance abuse and we never wavered from that,"
says Sheila Schuster, PhD, executive director of the Kentucky
Psychological Association. "The fact that we had an
established mental health coalition in which providers,
consumers and family members worked hand-in-hand really
carried the day."
Meanwhile, APA is hoping for a reversal of a major
disappointment in California last year. At the end of the
year, the state legislature was expected to send both a
broad-based bill and an SMI bill to Gov. Gray Davis (D) and
allow him to decide which to sign. But, due to last-minute
political maneuvering, the legislature only passed the SMI
bill. The governor signed it. The law does require broad-based
coverage for children.
But this year the state legislature is in the midst of
considering comprehensive reform for a range of mental health
laws. The California Psychological Association hopes that
among the reforms passed will be an expansion of the new
parity law to require broad-based coverage.
Recently, Massachusetts enacted a law requiring partial
parity for SMIs, as well as parity protections for children
and rape victims.
Of course, all of the state laws for mental health parity,
both for SMI and broad-based coverage, are limited in one
important aspect. They do not cover the health plans of
self-insured employers, due to an exemption from state
regulations under the Employee Retirement Income Security Act
(ERISA) of 1974, a situation that can leave many residents
without the parity protection. That's the reason APA's
Practice Directorate is advocating for strong federal
legislation.
