Improving Care for Americans with Mental Illness

The Paul Wellstone Mental Health Equitable Treatment Act Amendment of 2006

Summary
Approximately 50 million Americans experience some form of mental illness each year. Unfortunately too many forgo medical treatment due to the high out-of-pocket cost of treatment as private health insurance plans typically provide lower levels of coverage for treating mental illness than for treating other illnesses. This bill will eliminate the discriminatory treatment of mental illness by requiring insurers provide parity between mental health benefits and medical and surgical benefits.

Full Parity for All Mental Illnesses
While the Mental Health Parity Act of 1996 (MHPA) was a major step forward in ending insurance discrimination, it fell short of full parity. The 1996 law focused only on catastrophic benefits requiring annual or lifetime dollar limits for mental health coverage be no more restrictive than medical or surgical coverage.

The Paul Wellstone Mental Health Equitable Treatment Act Amendment of 2006 will take parity a significant step further.

• It will provide full parity – equalizing all treatment limitations and financial requirements for all physical and mental illnesses. Financial limitations include not only lifetime and annual limits, but all financial terms and conditions, including deductibles, coinsurance, and limitations on the total amount that may be paid for benefits under the plan.

• It will provide full parity for all mental illnesses. This includes all categories of mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM), the most comprehensive diagnostic tool available to mental health providers.

• It is not an insurance mandate . The bill requires only that insurance policies which cover mental illnesses, provide mental health benefits at parity with other medical and surgical benefits.

• It protects small businesses. Only companies with 50 or more employees will be covered under the law.

The Cost is Low

• The Congressional Budget Office has estimated that providing full parity for all mental illnesses will cause insurance premiums to rise by less than 1%.

• The bill is modeled on the mental health coverage in the Federal Employees Health Benefit Program (FEHBP), the program that covers Congress.

• The Office of Personnel Management testified that the cost of implementing full parity is only 1.3% of premiums, roughly $1/month for self-enrollees, and $2/month for families.

Background on Mental Health Parity

Mental Illness Insurance Issues
Over 50 million American adults experience some form of mental illness each year and over 5.5 million have a severe mental illness, such as major depression or schizophrenia.

Private health insurance plans have typically provided lower levels of coverage for treating mental illness than for treating other illnesses due to concerns about cost and adverse selection. Common ways health plans have restricted coverage of mental illness include: (1) lower annual or lifetime dollar limits; (2) lower service limits such as the number of covered hospital days or outpatient visits; and (3) higher cost-sharing requirements such as deductibles, co-payments, or coinsurances. As a result of limited coverage, individuals with mental illness often do not seek treatment, and those receiving treatment can quickly exhaust their benefits.

Current Law – Mental Health Parity Act of 1996

• The Parity Act of 1996 focused on catastrophic benefits only requiring only that annual and lifetime dollar limits for mental health coverage be no more restrictive than for all medical and surgical coverage.

• The law exempted employer-sponsored plans with 50 or fewer employees, group plans that experienced a 1% or more increase in plan costs because of compliance.

Parity for Federal Employees
Federal employees currently have mental health parity in their health benefits. Benefits coverage for mental health and substance abuse conditions is equalized in the Federal Employees Health Benefits (FEHB) Program. Parity in the FEHB Program means that benefits coverage for mental health, substance abuse, medical, surgical, and hospital providers will have the same limitations and cost-sharing such as deductibles, coinsurance, and copays. This amendment is modeled after the mental health benefits provided through the Federal Program.

Proposed Amendment – Senator Paul Wellstone Mental Health Equitable Treatment Act of 2006

• The Mental Health Equitable Treatment Act of 2006 prohibits health plans from placing discriminatory treatment limits or financial requirements that are different from other medical and surgical benefits.

–Crystal Patterson