Mental Health Coverage

(11/21/08) When the $700 billion economic recovery bill was signed into law, the bill also had a provision that enacted mental health parity between mental health benefits and physical health benefits. This ended years of more restrictive annual and lifetime limits on mental health coverage.

Before the enactment of this parity law, mental health coverage required more prior authorization, higher patient cost-sharing and limited visitation than pure medical coverage. The new law is called the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008.

According to the American Medical News, Oct. 27, 2008, vol. 31, No. 40, ?The parity law is expected to apply to more than 118 million Americans? health coverage, including 82 million enrolled in self-funded group plans, which aren?t regulated by state mental parity laws??

Sen. Edward Kennedy (D. Mass) is quoted as saying,"This is a civil rights issue. With passage of this bill, fundamental justice arrives for millions of our fellow Americans who deal with mental health".

It should be noted that this plan does not cover firms with 50 or fewer workers and does not cover all conditions in the Diagnostic and Statistical Manual of Mental Disorders version four, nor does it cover individual health insurance plans.

The plan requires that employer-based group health plans, with 50 or more employees, set equal financial requirements for the benefits such as deductibles, co-payments, coinsurance and out-of-pocket expenses. It sets equal treatment limitations, such as caps on frequency of care, number of visits and days of coverage. It offers out-of-network coverage for mental health and substance abuse benefits if out-of-network coverage is offered for medical and surgical benefits.

These requirements go into effect in January 2010, with certain exceptions. When a group plan can show that there is a 2% increase in the cost of benefits during the first year the law takes effect or a 1% increase in any subsequent year, the employer will have a one year exemption from this coverage.

The law charges the Government Accountability Office to report to Congress by October 2011 on the parity law?s impact on coverage costs and care. The Department of Labor has to report to Congress on the compliance of health plans to the law in 2012.

Members of the House of Representatives and the Senate who took active part in developing and stewarding this act through Congress include Sens. Mike Enzi (R. Wyo), Pete Domenici (R. N.M.), and Edward Kennedy (D. Mass), and Reps. Patrick Kennedy (D. R.I.) and Jim Ramstad (R. Minn.).



Harold Rubin, MS, ABD, CRC, Guest Lecturer
posted November 22, 2008

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