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ParityMichael B. Friedman, the public policy consultant of the MHAs of Westchester and New York City and Director of the Metropolitan Center for Mental Health Policy and Advocacy, presented this talk at Columbia University School of Social Work, April 30, 2003. I am very pleased to be here today to talk with you about parity-one of the most important contemporary mental health policy issues. Those of us who are working for parity need your help because it will take a great many voices to move both the Congress and the New York State Legislature to pass legislation to overcome discrimination against people with mental illnesses and to make treatment for mental health conditions as accessible as treatment for other conditions. This year there is more hope that meaningful legislation will be passed in Washington and in Albany that there ever has been before. But these are not propitious times for any social legislation, and passage is far from assured. Bills Introduced in Washington and Albany Need Public SupportThe Wellstone Equitable Mental Health Treatment Act has been introduced in Congress. Named for Senator Paul Wellstone who died in a tragic plane crash while campaigning last Fall, it has the benefit of sentiment about the Senator's untimely death. But it is essentially the same legislation that has failed repeatedly since the late 1990's. Passage will not be easy. In Albany, a bill called Timothy's Law has gathered momentum. Named for a 12-year-old boy who committed suicide after he was unable to get adequate psychiatric treatment because his parents' health insurance coverage did not cover the treatment he needed, this bill has won the sympathy of 32 Republican Senators, most of whom would not have supported such a bill in the past. But it is essentially the same legislation that has passed the Assembly for several years and which has been rejected by the Senate Insurance Committee, none of whose members have signed on as co-sponsors this year. These bills need your support. Why are they important? Let me begin by explaining the issue of parity. Mental Health Insurance Coverage is Less if Covered At AllIn the United States health insurance coverage, both private and public (Note 1), is generally less for mental health conditions than for physical health conditions. Mental health is less likely to be covered at all, and if it is covered the coverage is less. Typically, there are higher deductibles, higher co-pays, lower costs covered per visit, and limits on the number of visits or number of in-patient days that are covered. In addition federal law permits small businesses to impose lower limits on annual and lifetime costs. Why do these disparities between coverage of health and mental health matter? Three Reasons to Work For ParityThere are three reasons for you to work to overcome the disparity that exists in health insurance coverage between health and mental health.
Discrimination Discrimination against people with mental illnesses is an old and terrible social fact. From the earliest days, people with mental illness have been stigmatized and treated differently than people with other illnesses. At one time, they were regarded as possessed by the Devil and often were tortured or killed to save their souls or to protect the community. Later they were locked, chained, and abused in institutions. Now they are frequently blocked from housing, jobs, and the social mainstream. That their health benefits plans do not provide adequate mental health coverage because of a vast array of myths is another terrible chapter in the long history of bigotry and discrimination against people with mental illnesses. The Human Cost Discrimination against people with mental illnesses is wrong in and of itself. It also has terrible consequences for a great many people:
The Surgeon General has also documented that "Mental disorders are treatable, contrary to what many people think." In fact treatment efficacy rates for disorders such as schizophrenia (60%), bi-polar disorder (80%), major depression (80%), panic disorder (80%), and obsessive- compulsive disorder (60%) compare favorably with many well-established medical or surgical treatments. Yet, the Surgeon General continues, "Studies reveal that less than one-third of adults with a diagnosable mental disorder, and even a smaller proportion of children, receive any mental health services in a given year." Lack of Parity One Reason For So Much Untreated Mental Illness Lack of parity is one reason why there is so much untreated mental illness. For example, one study of companies that introduced parity indicated that utilization of mental health services increased 40% (from 5% of the workers and their families to over 7%). Remarkably, over 4 years costs declined nearly 1% because the utilization of inpatient services declined. So one consequence of lack of parity is that people who live in the United States do not seek out treatment that could help them because they find the costs prohibitive. In some cases the additional costs may be merely a few hundred dollars. But for working class people struggling to keep their heads above water, a few hundred dollars can be a real problem. And for many people the additional costs run into thousands of dollars:
If you run over the limits for outpatient and inpatient services, your costs could be over $20,000. How many people can afford that? Or $9,000 per year? Or even $3000 per year? As a result, people who have mental health problems that do not pass quickly and who are not eligible for Medicaid face terrible problems. Here's a typical story of a family with a child with serious emotional disturbance. Children and Adolescents with Serious Emotional Disturbances: The Smith Family The Smiths (a composite of typical cases) have a 16-year-old son who suffers from bipolar disorder. Sometimes he is too depressed to get out of bed in the morning. Sometimes his mind races with thoughts and feelings he cannot control, and he cannot pay attention long enough to study. Occasionally he has needed treatment in a hospital and has used up the 30 days of hospitalization his parents' health insurance will cover. When he is not in the hospital, he needs outpatient treatment at least once a week; but, like most plans, his parents' insurance only covers 50% of the cost of 20 visits a year. The Smiths-middle-class, working people-cannot afford to pay thousands of dollars a year. What are their choices? They can run themselves into poverty to become eligible for Medicaid; they can give up on trying to get appropriate and timely treatment for their son; or they can relinquish custody and put him into foster care to make him eligible for Medicaid. (Note 2) These are terrible choices! Adults with serious mental illnesses and their families also face terrible choices. Although adults can qualify for Medicaid without regard to their parents' income, there is a substantial period of time before they become eligible for Medicaid and typically their families have to try to foot the bill during this period. Double Stigma of Mental Illness and Dependence on Public Assistance In addition they have to confront a double stigma; they have to acknowledge that they have, or their family member has, a persistent mental illness. And they have to acknowledge dependency and apply for public assistance. When this happens to young people just beginning promising adult lives-as it frequently does-it is a terrible blow to everyone involved. And the financial problems caused by the uncovered cost of treatment add serious insult to injury. Eventually, however, most people with serious, protracted mental illnesses get good mental health coverage through Medicaid. Other adults with serious mental illnesses never become eligible for Medicaid-because they work. Alice Jones For example, Alice Jones (another composite of typical cases) is 31 years old. She has borderline personality disorder, which she has learned to manage with the help of medication and cognitive-behavioral therapy. She works and has mental health insurance coverage through work. Her employer's policies permit her time off for outpatient treatment and for occasional periods in the hospital. She too faces a 30-day annual cap on hospitalization and a 20-visit cap on outpatient treatment with a 50% co-pay. The costs of treatment for her mental illness force her to scrimp to get by, but she is determined to stay off public assistance and to live independently. As a result she lives in poverty, has no savings, and has few prospects of ever being able to get ahead financially. Older Adults Older adults also usually have inadequate coverage because Medicare covers only 50% of the costs of outpatient treatment and also sets limits on inpatient treatment, which sometimes result in premature discharges from hospitals. As the baby boom generation ages, there will probably be, therefore, a substantial growth of untreated mental illness-at great cost to older adults and their families. The Cost to the American Economy In addition to its human cost, untreated mental illness in workers and their families is also damaging to the American economy. It leads to:
Untreated mental illnesses also lead to increased disability claims. In general it reduces productivity, increases training costs, and increases health care and disability costs. The estimated cost of untreated mental illnesses to the workplace is over $100 billion per year. Parity LegislationParity makes sense because it would contribute to overcoming discrimination against people with mental illnesses, because it would increase access to needed treatment, and because it would enhance American productivity. It can be achieved by employers voluntarily providing it-as some have-or by statutory mandates. Parity can be mandated at the federal level and at the state level. Federal Law The federal law that governs employee benefits limits the scope of state insurance laws. States can create mandates for insurance-based health benefits plans but not for health benefit plans which are "self-insured." (Note 3) Since about half of the people who have health benefits through work are covered by self-insured plans, the priority is a federal mandate for parity covering both insured and self-insured plans. In 1996 the federal government passed a law requiring health plans that cover more than fifty people to provide parity with regard to limits on covered annual and lifetime costs. Since then repeated efforts have been made to extend the federal law to require parity with regard to deductibles, co-payments, limits on outpatient visits, and limits on days of inpatient care. Currently such a bill has been introduced. It is called "The Paul Wellstone Mental Health Equitable Treatment Act", in memory of Senator Paul Wellstone, a champion of equal access to mental health treatment until his tragic death in an airplane accident in 2002. Wellstone Act An Improvement But Has Limitations Although a clear improvement over current law, The Wellstone Act has several significant limitations. It applies only to health plan providers that choose to provide mental health coverage; health plan providers would not be legally required to provide mental health coverage at all. It does not cover treatment for substance abuse. It does not cover plans for groups of 50 or fewer people. And it applies only to private health insurance plans; it does not mandate parity for Medicare, for the State Child Health Insurance Program, or for other government-based health plans. The Wellstone Act does, however, cover self-insured as well as insured plans and extends federal requirements very significantly. I ask you to support it and to work for its passage. (I also support federal legislation to require that Medicare, The State Child Health Insurance Program, and other government-based health insurance programs provide equal coverage of mental illnesses and other health conditions. But since these changes are not viable this year, I will not discuss them today.) State Law I also ask you to work for the passage of Timothy's Law in New York State. This bill is named for a 12-year-old boy who took his own life after years of illness during which his parents struggled to get him access to adequate and appropriate mental health treatment. Even though Timothy had coverage for mental health treatment under his father's employer's health insurance plan, the coverage was inadequate and, because his parents could not afford to pay for long term intensive treatment themselves, they eventually had no choice but to give up custody of Timothy so that he could get the treatment he needed through Medicaid. Timothy's Law would mandate that health insurance plans in New York State provide coverage for the treatment of mental illnesses and substance abuse disorders that is substantially equal to the coverage provided for other health conditions. Although Timothy's Law does not cover self- insured or government-based plans such as Child Health Plus, it would be of great assistance to over five million working people and their families who are covered by health insurance plans in New York State. The Political SituationI have said that lack of parity is bad for people and bad for business. So why isn't there widespread parity? First, let me point out that there has been progress with regard to parity. Federal law requires parity regarding limits on annual and lifetime costs except for small businesses. More than 35 states have passed parity laws, although only 5 or 6 are comprehensive. In addition an unknown number of employers have introduced parity voluntarily. The largest is the Federal government (covering 9.5 million people.) But there are also corporations such as Delta Airlines, American Express, Black and Decker and others which have chosen to provide parity. But for the most part the business community fights parity, and because it fights parity, so do most Republicans. (This is not a slur on Republicans, simply an empirical observation.) Two primary arguments are made against mandating parity.
Of course, it is understandable that the business community has been unwilling to accept any additional costs in health coverage during a period when health insurance costs are going up 10-15% per year without parity. For this reason, passage of parity mandates may depend on the ability of those of us who advocate for parity to persuade the business community and Republicans that providing good mental health benefits is good for business. The Costs vs. the Benefits of ParityResearch into the costs of providing expanded mental health benefits indicates that employers and insurers have little to fear with regard to costs or the controllability of costs: A study done for the National Institute of Mental Health estimated that the costs of health benefits with parity would increase by less that 1.5 % in the short term. Estimates from the Congressional Budget Office and the experiences of states with mandated parity show that health insurance premiums and overall health costs generally increase by 1% or less due to parity. A PriceWaterhouseCoopers' study done in 2002 estimated that the cost of comprehensive parity legislation in New York State would be $1.26 per person per month. A Zogby poll conducted at the same time found that New Yorkers would be willing to pay this cost themselves in order to have good mental health coverage. In addition, many large, self-insured employers have reported greatly reduced overall health care costs after eliminating restrictive mental health coverage limits, because accessible, timely, appropriate treatment reduces relapse and hospitalization rates, and because many people who seek treatment from primary care physicians have medical symptoms related to psychological factors. Low cost increases also reflect the fact that mental health treatment costs do not spiral out of control when they are well managed. Parity presumes the management of treatment to assure that it is medically necessary and to assure that care is delivered on an outpatient rather than an inpatient basis whenever possible. This kind of control holds down potential cost escalations. There may be additional costs associated with parity, but there are also significant benefits; and when all things are taken into account, parity is quite a bargain. Parity Is Not a PanaceaBut parity is not a panacea. This is important to be clear about because one of the strangest sources of opposition to parity laws is the argument that it should be rejected because it does not solve all of the problems of mental health insurance coverage. As I have already said, none of the proposed parity laws mandates that employers provide health insurance. The federal law does not mandate that they provide mental health insurance and does not cover chemical dependency. Timothy's Law does not cover so-called "self- insured" plans. And none of the proposals requires that government-based health insurance provide parity. Perhaps most importantly, parity mandates do not apply at all to the 15% of the people who have no health coverage at all. Must Not Reject the Better While Waiting for the BestAs a result, not everyone will benefit from parity mandates. Does that mean that we should reject parity until The United States provides universal health coverage? I hope you will live long enough to see that day, but I don't expect it will be in my lifetime. And it makes little sense to me to reject the better while waiting for the best. Millions of people will get better access to mental health services if The Wellstone Act and Timothy's Law pass. Please lend your support to the passage of parity mandates now.
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