By Christopher Guadagnino, Ph.D.
James Jordan is executive director of NAMI (National Alliance on Mental Illness) Pennsylvania.
PND: Could you explain what the new Mental Health Parity and Addiction Equity Act of 2008 says and what impact it will have?
JJ: After about 20 years of struggle, the final bill that was passed and signed has eliminated discriminatory practices by some insurance companies as it relates to providing coverage for people with mental illness. This law will expand coverage for about 82 million more people who are not protected by state laws and 31 million in plans that are subject to state regulations. That’s a very large number of people who are now going to benefit directly from the passage of this law, which becomes effective one year after its enactment. The law requires that insurance companies who provide coverage for mental health care and substance abuse disorders must now do it under the same terms and conditions as they do for all other medical conditions. That’s a major plus for people with mental illness who’ve had to deal with discriminatory practices for some time. Sometimes an insurance company would limit the number of inpatient days in a given year or limit the number of outpatient visits. Sometimes there is even a lifetime limit on the number of days covered. They might also require higher deductibles or cost-sharing with people for mental illness or addiction treatment. What the bill does is say that you can’t have that standard for people with mental illness if you don’t have it for all the people you cover for other illnesses. That’s been eliminated now and, if you’re providing mental health care under your policy, then you must do it equally and fairly. If plans provide out-of-network coverage for other illnesses, then they must do the same for people with mental illnesses. This law applies to commercial plans if they’re providing mental health care – if they do not provide mental health care or coverage, then they’re not mandated to do so. The law only applies to policies of employers with 50 or more employees.
PND: What practical impact will this law have on physicians?
JJ: If a physician is currently providing services to a carrier for patients who are under its coverage, they don’t have to have two different ways of doing their treatment. If you’re treating a physical ailment or a mental illness, you can do your treatment plan and write your prescriptions consistent with that plan and not have to deal with the discriminatory clauses and the limitations that were set in place before. You can make referrals out-of-network, if that’s what the treatment plan calls for. You can provide coverage without the restrictions as it relates to limits on inpatient services unless that plan provides that limit for everyone. It gives you greater flexibility and it allows you to handle patients based on the needs of the individual who you’re treating.
PND: A law like this has been advocated for quite some time. How did it pass now?
JJ: Yes, this has really been an ongoing struggle for about 20 years. The Mental Health Parity Act of 1996 eliminated annual and lifetime dollar limits for mental health care for companies with more than 50 employees, but it did not require health plans to offer coverage for mental, nervous or emotional disorders. Day and visit limits, as well as higher co-payments and deductibles, could still be applied to coverage if the coverage was offered.
I believe that there’s been a very strong campaign to fight stigma over the last 20 years and there’s a better understanding, and a more open and public discussions about mental illness as a disease. Diseases, Americans understand. Diseases are treatable. Throughout most of the history of the treatment for mental illness stigma has played a big role, and mental illness has been treated as something that was hidden in a back room or a closet, something that came from bad parents or a bad environment, or that individuals were lazy – sometimes in literature they’re even portrayed as being evil. People began to understand that we’re talking about a disease that doesn’t define who the person is, and that it is treatable. Research has increased and people understand more about definitions of mental illness. There’s hope in the lives of families and people with mental illness now because recovery is possible. Approximately 20 percent of the population is dealing with a mental illness at any given time during the year. So, better understanding about this from a disease perspective, better understanding that recovery is possible and that treatment works, and personal experiences of individuals have opened the door for wider public discussion, and the legislators who represent them have been more receptive to looking at strategies to deal with these illnesses.
PND: What were the issues that had to be resolved for this bill to pass and get signed into law?
JJ: We didn’t have the major issues that we had in the past, and we were very close to agreement on a final bill. One thing that had to be worked out was the preemption issue. There are a number of states that provide coverage at different levels and there was a fear that this bill might have a negative impact and take away some of the gains that had been realized. But the agreement that was finally reached was that a state law may be stronger than, but may not be weaker than, the law that was passed. So, you could have more stringent requirements for insurance companies in your state but you can’t undercut the federal legislation. That protects gains that were achieved in different states. We’re going to have to take a closer look at the state laws that are currently in effect and see what the benefits would be, but from our perspective it’s a very important step in the right direction and will have a positive benefit on all persons who need these services. Other issues that had to be worked out were out-of-network coverage, and impact on the federal ERISA law. The current financial crisis also provided support for passage of this bill because bipartisan efforts allowed for this bill to be attached to a $700 billion Emergency Economic Stabilization Act, which was the vehicle that allowed for it to be voted on, and which speaks to a deeper understanding and commitment by both parties to see that this legislation was passed.
PND: What are some of the limitations of the new law?
JJ: Again, it doesn’t apply to small employers with fewer than 50 employees. The law doesn’t mandate that health plans cover mental health services so, if you’re not providing mental health care, you’re not mandated to do it. Any group plan that sees a two percent increase in the cost of benefits during the first year, or a one percent increase in any subsequent year, can seek an exemption from the mandate. The law also does not apply to the individual health insurance market.
I believe that, as employers understand the benefits of investing in their employees and making sure they’re physically and mentally healthy, that will reduce the impact of any negatives in the bill. The Congressional Budget Office estimated that the total cost for payment of this coverage will be less than one percent – about 0.4 percent. For that 0.4 percent, you’re looking at enormous increases in productivity in the workplace and enormous benefits in the community with stabilized families who are receiving treatment. People at work who are with an untreated disease – mental illness in this case – you’ll find that they’re not as productive. Sometimes you spend years training a person who then has to leave the workforce. This small investment in that employee will give you a more productive employee and will extend the productive time that the employee spends with the company. That’s an incredible benefit and we think that employers, as they understand the benefits, will embrace this and give greater support to this concept. I’m not aware of a penalty that would prevent a carrier from dropping mental health coverage, but I would imagine that a carrier would have trouble with the company that it’s covering because stopping the coverage when you’re looking a 0.4 percent increase in overall costs would be very hard to justify.
PND: Do you have an appraisal of how this legislation will change the situation in Pennsylvania, specifically?
JJ: No, we’ll have to take a look at what the impact on insurance coverage for consumers and families will be. This law has just passed, and our national organization is taking a look at it to see what the true impact will be.
PND: What are the specific mental health care challenges we face in Pennsylvania?
JJ: Pennsylvania has roughly 12 million people – that’s 2.2 million people in the state who are dealing with some form of this problem, so we’re not talking a small issue here. Access to quality care for all Pennsylvanians is a goal that we have. Access in community settings. Access to community psychiatry, to medications. Access to adequate housing and supportive employment. Adequate transportation. These are some of the basic issues that face Pennsylvanians right now, and people all over the country. These are not small challenges, and this law will put a dent in some of them.