Parity in Insurance Coverage

NAMI Position (Summarized from the NAMI Policy Platform)

NAMI supports full parity in both private (individual and employer-based) and public (Medicare, Medicaid, and other government-sponsored) insurance coverage for mental illnesses. Central to an understanding that mental illnesses are both "blameless" and treatable is non-discriminatory coverage for the necessary medical care for these illnesses. One key to unlocking the prisons of these illnesses is research, and research is driven by funding. The discrimination in access to care is evidenced by limited coverage, punitive co-pays and restricted access to hospitalization during acute episodes and what one would logically conclude would occur for other untreated or under-treated serious illnesses. That is to say: the outcome for people with untreated or under-treated illnesses are disastrous and too frequently results in death or permanent disability. To that effect NAMI has been actively pursuing non-discrimination clauses in both federal and state insurance laws.

National Legislation

The 1996 Domenici-Wellstone Mental Health Parity Act (MHPA) was a first step towards recognizing the discrimination that exists in most healthcare policies, that discrimination is wrong, and that calls out for corrective action in health-benefit design by eliminating lifetime and annual financial caps. These caps had often been used to deny our members insurance coverage for necessary treatment. The result was that our members most commonly had to rely on the public mental health system. The MHPA set standards that apply nationally, including to ERISA self-insured plans.

Unfortunately, the compromises that were necessary to pass this legislation meant that many important measures for truly equal coverage had to be surrendered. For example, it is still perfectly legal to charge onerous co-pays for all services for mental illnesses and to restrict the number of hospital days and outpatient visits without regard to the patient's condition. The law does not apply to companies of fewer than 50 employees, and no company has to meet this standard if they opt out of offering mental health coverage altogether. Additionally, any company can request a waiver if the cost of parity exceeds more than one percent of the plan's healthcare costs.

Fortunately, efforts are underway in Congress in 2001 to expand the MHPA to reach full parity. The Mental Health Equitable Treatment Act (S. 543) was introduced in March 2001 by Senators Domenici and Wellstone. The bill targets specific adult and childhood mental illnesses and defines the term "severe biologically-based mental illnesses" as illnesses determined by medical science in conjunction with the Diagnostic and Statistical Manual of Mental Disorders (DSM IV) to be severe and biologically-based. S. 543 would also provide to all insured Americans similar parity coverage to that in the Federal Employees Health Benefit Plan (FEHBP) – the program covering 9.5 million federal workers and their families (including members of Congress). In addition, S 543 eliminates the October 1, 2001 sunset of the MHPA and lowers the small business exemption to firms with 25 or fewer workers, expanding parity coverage to an additional 15 million people.. NAMI enthusiastically supports S 543 and urges all senators to support this historic legislation by cosponsoring it.

S. 543 is core to NAMI's mission so that the next generation will not have to live out their lives on disability or in public institutions, unable to get the very care that would give them back productive lives. Insurance discrimination enforces the invalid message that mental illnesses are "untreatable" and "hopeless." The effort to end insurance discrimination received a major boost in December 1999 with the release of the U.S. Surgeon General’s Report on Mental Health which documents the scientific evidence that treatment is effective and concludes that there is no justification for health plans to cover treatment for serious brain disorders such as schizophrenia and bipolar disorder differently from any other disease.

State Legislative Efforts

Before there was Domenici-Wellstone, there were state laws that were the first attempts to end insurance discrimination. The idea was modeled on legislation in the 1960s that prohibited cancer exclusions in insurance coverage. Mental health parity was first successful with state employees in Texas, then in Maine, New Hampshire, Rhode Island, Maryland.

The early 1990s saw the passage of parity laws in eight states. Although these laws do not apply to ERISA companies, they give employees some protection and they serve to statistically validate the fact that parity is affordable. After passage of the Domenici-Wellstone law, we saw the passage of eight more state parity laws in 1997 and seven (unfortunately three were vetoed) in 1998. In 1999, 12 more states enacted parity laws, and 5 were signed into law in 2000. This brings the total number of states with parity laws to 32. Now more than half the population live in states that require non-discriminatory coverage.

Clearly, the trend to pass state parity legislation is picking up momentum. 31 states have introduced new parity bills this year. NAMI state affiliates will continue to seek out legislative leaders to sponsor parity bills of all types in the states with the ultimate goal of ending all insurance discrimination against those who suffer from mental illnesses. NAMI will continue to provide documentation of the experiences of the states that passed parity laws in the early 1990s and other evidence of the affordability of parity and the effectiveness of treatment. NAMI will seek coverage that is equal to that of other medical conditions covered in each policy written, and we will not turn away from this effort until the discrimination has ceased.

For many of our members, the insurance discrimination was and continues to be unexpected, impoverishing, and humiliating. We believe that lack of care, too frequently caused by lack of or hurdles to coverage, has resulted in unnecessary death and wasted lives of many people with great potential.

FEHBP (Federal Employees Health Benefits Program)

FEHBP is the largest health insurance program in the nation, covering 9.5 million federal employees, retirees, and their families. As a result of an Executive Order signed by President Clinton in June 1999, all health plans participating the FEHBP program, as required by the Office of Personnel Management (OPM), began parity coverage for mental illnesses in 2001. The Clinton Administration announced this initiative as part of the first ever White House Conference on Mental Health in June 1999.

Medicare/Medicaid:

Five million Medicare beneficiaries have mental disorders, and 1.3 million of these people are severely disabled and under the age of 65 years. Yet, Medicare has a highly discriminatory benefit. Medicaid provides basic healthcare coverage-and in some states the most comprehensive healthcare coverage in the nation-to 5.8 million persons with disabilities. Of these people, 11.6 percent are diagnosed with schizophrenia and another 20 percent have other mental illnesses. The MHPA applies to Medicaid, but not to Medicare.

NAMI's Advocacy Goals and Strategies

Truly equal, and, therefore, integrated, coverage. Just as in the civil rights movement, "separate but equal" can never be truly equal. In addition to the same lifetime and annual financial caps, NAMI seeks the same co-pays as are offered for other conditions, the same access to care by the appropriate medical professional, the same access to hospitalization for acute conditions, the same pharmacy coverage, and the same outpatient care.

An end to the ERISA¹ exemption for state parity mental illness laws.

Equal access to care and the same coverage for individuals in all other forms of government-subsidized care. Older Americans have a high rate of untreated depression, many young children living in poverty rely on Medicaid, and our disabled population is frequently unable to access the services they need.

Parity laws in all 50 states that are comprehensive, clear, and compelling in ending all forms of insurance discrimination against persons with severe mental illness.

Monitoring by both the states and the federal government to insure that parity laws are enforced, and an appeals process for denied services that is fair and impartial.

Access to all appropriate medications that are clinically indicated for persons suffering from severe mental illness.

[1] ERISA:  Employee Retirement Income Security Act- concerns employers which self insure.

For more information about NAMI’s activities on this issue, please call Andrew Sperling at 703/516-7222. All media representatives, please call NAMI’s communications staff at 703/516-7963.

For information on serious mental illnesses and brain disorders, or for a referral to your State and local affiliates, please contact the NAMI HelpLine: 1-800-950-NAMI (6264) / TDD 703-516-7227 Visit the HelpLine page