What Mental Health Parity Means for You
The outcome of health care reform currently under consideration in Congress is uncertain. Fortunately, legislation was passed last year to improve access to mental health services through health insurance. The 2008 Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act requires health insurance and self-insured companies to provide equal benefits for physical, mental, and substance abuse conditions. It takes effect for most insurance plans as of January 1, 2010.
The federal government is in the process of issuing the regulations that will enforce the details of the new law. Insurance companies and employers will have some leeway in what benefits they offer, and some plans are exempt from the law. There will be fewer changes in plans offered in states that already have mental health parity laws.
What does the new law require?
Health insurance plans can no longer provide lesser benefits for mental health or substance abuse conditions. Until now, many plans had higher deductibles, co-pays, and maximum out-of-pocket expenses; lower annual and lifetime dollar limits; and fewer treatment visits and hospital days per year for mental health services. Plans that offered out-of-network benefits for physical health often allowed only in-network benefits for mental health.
The law applies to group plans for companies with more than 50 employees that provide mental health or substance abuse benefits. Individual plans and group plans for companies with 50 or fewer employees do not have to comply. They will continue to follow existing state regulations.
The new law does not require health insurance companies or self-insured employers to include mental health or substance abuse benefits in their plans, but if they do, the benefits must be equal to those for physical health.
What can you expect?
Parity should result in lower out-of-pocket expenses for mental health services. However, employers may choose to provide equal benefits by increasing co-pays and other costs for physical health services. Employers may drop coverage for mental health services altogether to avoid having to provide equal benefits. It also appears that they may be able to exclude all but the most severe mental health disorders from their plans.
Whether or not you have ever used your mental health benefits, you should look carefully at the details in choosing between new plans offered by your employer. A lower cost plan may not cover mental health at all, or cover fewer diagnoses than your current plan does. Don't wait until you need services to find out. And don't assume that no one in your family will need mental health or substance abuse treatment. With 1 in 5 children and 1 and 4 adults needing help for mental illnesses each year, it would be foolish to take the risk.
For more information, see the following factsheets:
APA Help Center - Managed Care & Health Insurance - "How Does the New Mental Health Parity Law Affect My Insurance Coverage?"
Mental Health America: Equity Campaign Parity Legislation
This post was featured in Grand Rounds, Vol. 6, No. 8