Parity in Mental Health Coverage Is Sound Public Policy

Imagine for a moment that your child has recently been diagnosed with a severe mental illness. You are on an emotional roller coaster. You struggle with the realization that he will face many difficult challenges in his young life while at the same time you are trying to remain strong, informed and well-prepared to manage his health care. Then, imagine your frustration when you find that your HMO charges significantly more for treatment of his autism than it would otherwise for a chronic physical illness.

Where does that leave you? In addition to having less money in your pocket, you’re probably confused and angry that your health plan will not equitably treat his biological disease--and justifiably so.

If this really happened to you or your family today, it would not be unusual.

Mental illness has lost some of the stigma it once had, mainly because its prevalence is better known and understood. According to the American Psychological Assn., as many as 18% of Americans, including 10 million children, suffer from a diagnosable mental disorder. The APA estimates that 60% of employee absences are due to psychological problems.

The APA also notes that many mental disorders are just as preventable, controllable or curable as physical illnesses. Yet if that is so, why is it that for treatment of mental disorders, health plans charge higher co-pays, higher premiums, higher deductibles and higher prescription fees, if they cover it at all?

Despite many treatment advances in recent years and acknowledgment of the need to provide continuity of care, most private insurance companies will only pay for acute inpatient or outpatient care, usually with significant disparities in cost between physical and mental health benefits. In addition, providers of less restrictive and less costly alternatives to inpatient care are often not reimbursed appropriately, which restricts access to these services.

As a result, many mentally ill persons must rely on public programs for care or, worse, end up in jail--eating up precious state and local tax dollars. This is clearly discrimination against the mentally ill and their families, and it must stop.

Fortunately, there is a bill moving through the California Legislature to rectify this grave inequity: Assembly Bill 88 by Assembly member Helen Thomson (D-Davis), of which I am proud to be a coauthor. During the 1997-98 session, Assembly member Thomson battled to get a similar bill to Gov. Pete Wilson’s desk, only to see it vetoed despite broad support.

This year’s AB 88 would require insurers and HMOs to provide equitable co-pays, deductibles and maximum lifetime benefits for the medically necessary treatment of severe mental illness in all ages, and serious emotional disturbances in children. It would cover outpatient and hospital services.

Despite what the insurance companies and HMOs are saying, mental health parity is not costly. Ohio, Maryland, Minnesota, Maine, New Hampshire and Rhode Island, among other states, have enacted laws to require coverage for mental illness services on par with services for physical health. A 1997 Rand Corp. study and a 1998 National Institute of Mental Health report show that other states are experiencing nominal if any increased premiums due to their mental health parity laws.

There is even support for parity in mental health coverage within the small-business community. In the California Chamber of Commerce’s 1998 Legislative Conference Small Business Poll, a majority of the businesses surveyed said they would support legislation to mandate that mental health coverage be included in their insurance plan, even if it increased their premiums. The public has also made clear its support. In the children and youth survey conducted by the California Center for Health Improvement in 1997, 90% of adults surveyed agreed that “mental illnesses should be covered by health insurance plans in the same way diseases such as diabetes, asthma and other chronic physical diseases are covered.”

There is no doubt that timely treatment, access to treatment and fair co-payments will reduce patients’ out-of-pocket expenses. And there is widespread agreement that any marginal increase in premiums in the private sector would be offset by a significant decrease in public expenditures for mental health services. The bottom line is that this legislation, by requiring more appropriate care in a timely fashion, would save society money and would even save lives.

According to the Children’s Defense Fund, childhood mental and emotional disorders that go unrecognized and untreated place young people at greater risk for school failure and drop out, drug use, HIV transmission and other difficulties. Some of these kids commit suicide; others end up in the juvenile justice or child welfare systems. Public health care systems have historically provided for the mental health needs of these young people and others who suffer from mental illness, but it is high time for private health insurance to do its part as well.

Mental illness strikes people from all walks of life--young and old, rich and poor. Each of these individuals deserves fair and equitable health care for his or her disease, period. Mental health parity through AB 88 is not just HMO reform; it is fiscally and morally sound public policy. I am proud to support it.