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On October 3rd, 2009, the bill known as HR 6983 will go into effect. Mental health patients and treatment providers around the country are understandably curious and concerned about exactly what this means.
Here’s a brief rundown of what this latest parity act does, and how it may affect your coverage.
What is the Act?
The 2008 Parity Act is not the first such law, and is, in fact, an expansion of a 1996 law that already required parity with regard to annual and lifetime dollar limits. The new federal parity law will require group health plans to cover treatment for mental illness on the same terms and conditions as any other illness. Parity will be required in two specific areas:
1. Treatment Limits. The new law requires equity – equal treatment – with respect to numerical limits (number of visits) on inpatient and outpatient services, barring limits on both services that don’t also apply to medical/surgical coverage.
2. Financial Limits. The parity law also requires equity with regard to financial strictures, excluding any cost-sharing, deductibles, or out-of-pocket limits that don’t also apply to medical/surgical coverage.
What this means is that most plans will eliminate separate deductibles for mental illness or substance abuse treatments, and that if a cost or deductible doesn’t apply to medical or surgical coverage is cannot also be applied to mental health or substance abuse coverage, but any charges that ARE applicable to medical/surgical coverage may be applied to mental health and substance abuse as well.
Who is affected by this Act?
The new parity law is only applicable to group health plans that are sponsored by companies or employers with more than fifty employees (“51 or more”), including fully insured group health plans regulated by individual states, and ERISA self-insured/self-funded plans regulated by the United States Department of Labor. It’s the ERISA plans that are most affected, since the new law will extend full parity to 82 million people whose current health plans are exempt from existing parity laws in 42 states.
It’s important to remember that health plans do have the right to drop coverage for mental illness and substance abuse treatment, and that those plans which can prove that coming into compliance with the new law will increase costs 2% or more have the right to postpone their compliance for a year.
On the other hand, most experts agree that the cost increase to most insured consumers will be less than 0.5%.
What Does this Mean to Me?
Right now, most health plans and EAPs (employee assistance programs) limit the number of mental health and/or substance abuse treatment visits you may make. Often, psychiatric care and therapy are limited to thirty visits a year. Under the new parity law, if there are no limits about how often you may see your doctor or surgeon, there cannot be limits to the number of mental health treatment visits you can have.
Since mental health and substance abuse are not easily defined illnesses, but are often open ended, this new law gives treatment providers the necessary leeway to treat their patients, and patients the ability to take the time they need to work through mental illness and addiction.
Since the law is targeted toward employee health plans, which are often a patient’s only source of affordable health insurance, this is extremely beneficial.
Is There Anything the New Parity Act Does Not Do?
The new parity law does not redefine mental illness or addiction, or specify what is or is not covered. At present, the wording on that is nearly identical to the 1996 parity law, which says that such conditions are “defined by the plan” in accordance with State and Federal law, which basically means that insurance providers and plan administrators will continue to define what conditions are recognized, and eligible for coverage benefits.
The new law also does not require existing plans to add mental health or substance abuse programs if they are not already part of the programs offered.
It is estimated that more than 54 million Americans suffer from mental disorders in any given year, though less than a fifth of them actually seek treatment. It is also estimated that 65-85% of employee terminations, and 80-90% of industrial accidents.
By establishing parity with medical and surgical conditions, the Wellstone-Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 will enable significantly more people to receive the treatment and support they need and deserve.
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