Mental Health Parity

The Wall Street Journal today (13 February) reports the introduction of a Mental Health Parity bill in the Senate. This Bill would build on the Mental Health Parity Act of 1996 and require that, if mental health expenses are covered in an employer group insurance plan, they must be reimbursed the same as other health expenses in the plan i.e., cost-sharing, inpatient care, and outpatient care. Despite its name, the 1996 Act did not require full parity with other health benefits. The current Bill would produce full parity and therefore represents an expansion to mental health benefits in group insurance plans. The Bill requires States to go along, perhaps simplifying the rules for plans whose participants are located in more than one State. Employers having fewer than 50 employees would be exempt.

As reported, this Bill claims not to “mandate” inclusion of mental health in group health plans. Plans that presently do not cover mental health expenses would not be required to add such coverage, and plans now offering mental health benefits could delete them; as both of these possibilites seem far-fetched for employers having more than 50 employees, in practice this Bill is effectively a mandate.

There is a cost test – if benefit parity would require an increase in cost of more than 2% in the first year and 1% per year thereafter, the plan sponsor may “opt out” from the parity requirement although the nature of future cost tests is not mentioned.

The reporting is not clear whether the requirement applies only to insurance companies or also to the group plan sponsors such as employers, labor unions, governments, etc. Understanding this would help clarify whether the requirement falls only on insured plans or might also affect self-funded plans.

Apart from cost, I wonder about the effectiveness of outpatient behavioral care. I believe it’s still true that generally-accepted “best practices” and treatment protocols are not so well-developed and uniformly applied for behavioral health as in other branches of health care (where, BTW, substantial variation exists), which I think means there is less assurance of effective care. That is one reason why benefit plans have historically limited the coverage for such care. One thing for sure, the cost of the added coverage will be measured in tangible dollars.

The National Institute of Mental Health estimates that 25% of all Americans have at least one “diagnosable mental health disorder”. The providers represented by that organization stand to gain financially from this Bill. I believe NIMH and the behavioral health providers owe plan sponsors and the public in general, tangible and specific explanations as to how patients will benefit from the additional care, were this Bill enacted into law.