MENTAL HEALTH PARITY

June 1999
		Should health insurance agencies have to cover treatment for mental health? The president of the Health Insurance Association of America, Chip Kahn, and the executive director of the National Alliance for the Mentally Ill, Laurie Flynn, take your questions.

Forum Introduction What is included in the Domenici-Wellstone measure? How will private policies react to federal changes? Does parity really drive up costs? Is expense the deciding factor? How much coverage do people have now?

Ronald Bewilder of Kansas City asks: What degree of coverage for mental illness do most health insurance providers give now? Chip Kahn responds: Almost all employer-sponsored health plans include coverage for both inpatient and outpatient treatment of mental illness and substance abuse. Typically there is some limitation on the total amount of treatment covered in a calendar year, expressed either as a number of services or a total dollar amount. Examples would be limiting inpatient care to 30 or 60 days in a year, and limiting outpatient visits to 50 in a year. These limits are driven by concerns about the difficulty in administering these benefits, and the cost implications of uncontrolled utilization of mental health services. Most benefit plans will support significant intervention for an acute episode of mental illness, and long-term maintenance in the case of chronic mental illness, but will not provide benefits generous enough to support the archetypal twice a week visit to the therapist. Laurie Flynn responds: Most employer-sponsored health plans provide some degree of mental health coverage: i.e., 99 percent of large firms with 500 or more employees and 97 percent of small firms with ten to 500employees. What is not included in this consideration are plans provided by small businesses with less than 10 employees or private plans purchased directly by individuals. Unfortunately, health insurance plans typically impose limits of 30 days for inpatient care and 20 days for outpatient care; many also demand higher co-payments for office visits. Maximum lifetime limits and annual limits under a policy also may be substantially lower for mental health care: e.g., $25,000 overall and only $3,000 and $2,000 per year for inpatient and outpatient care respectively, even though a single hospitalization can cost tens of thousands of dollars. Based on 1997 data, one study published in the March/April 1999 issue of Health Affairs concluded that 75% or more of employer-sponsored plans place greater restrictions on mental health benefits than general medical coverage. From 1988 to 1997, the value of such benefits has decreased from 6.8 percent to 3.1 percent as a proportion of total benefit costs.