Paying a High Price for Mental Health

Paltry insurance coverage could soon get a boost


Intensive but expensive therapy helped Meghann Eckerdt control her obsessive-compulsive disorder.


Meghann Eckerdt was a straight-A valedictorian, but last spring's high school graduation wasn't a joy. She skipped the senior week parties because eating in public made her anxious. She would agonize over whether the yogurt she'd packed really was strawberry or whether her sandwich had the right number of slices of bread. "When you're so ill from a mental illness, you shut yourself off from the world," says Eckerdt, 18, who was diagnosed with obsessive-compulsive disorder as a sixth grader.

Yet she is now a freshman at Montana State University, taking six classes, living in the dorm, and hanging out with friends. "I've been doing outstanding," Eckerdt says. "Not every day is good. But now I know that if one thing goes wrong, I don't have to have a bad day; I can have a bad moment. I learned that in treatment"—two months of cognitive-behavioral therapy at Rogers Memorial Hospital in Oconomowoc, Wis., during the summer.

The price her family paid for her progress: $22,380. That was on top of $15,040 Ken and Jenny Eckerdt paid out of pocket for 51 days of inpatient treatment in 2006. Her parents have health insurance, but they'd burned through their coverage and had to pay upfront with retirement funds and credit cards.

Many families find themselves similarly strapped. The need for mental-health treatment is great—an estimated 1 in 4 Americans has a diagnosable mental disorder; 6 percent suffer from schizophrenia, bipolar disorder, or other serious problem. But coverage falls far short. It is not unusual for a policy to set a lifetime limit of $1 million for medical care but just $50,000 for mental-health treatment.

"If our daughter was told she had cancer, the first question in our mind when we looked at our insurance policy would not be 'I wonder whether they can cure this within the 30-day limitation for the calendar year?'" says Jenny, a legal secretary for the city of Billings. She praises her plan's administrator for wringing every possible dollar out of their coverage. "It's just that when the plan states you have 30 days, there's no 'Gee, can I have a few more days because I need them?'" she says. "It's 'no.' It's not appealable."

Congress attempted to address the inequity through a law, enacted in 1998, requiring insurers to offer the same annual and lifetime dollar limits for mental-health care as for medical and surgical care. But exceptions undermined the intent. Employers don't have to provide any mental-health benefits. Copays and deductibles can be higher for mental-health expenses. Visits can be limited. And small businesses and self-insured employers, which cover healthcare costs directly (including the city of Billings), are entirely exempt.

State and federal legislators have been trying to patch the holes ever since. More than 40 states now have mental-health parity requirements of some sort. Congress, after years of failed efforts, is expected to pass a parity law this year that will end some of the more egregious exemptions by requiring employers that self-insure to equalize annual and lifetime coverage limits, the loophole that squeezed the Eckerdts.

The House bill, sponsored by Reps. Patrick Kennedy, a Rhode Island Democrat, and Jim Ramstad, a Minnesota Republican, goes further than the Senate's, most notably in requiring coverage for "medically necessary" treatment for all diagnoses listed in the fourth edition of the Diagnostic and Statistical Manual of Mental Disorders, the bible of mental-health care. "It's very broad coverage," says Steve Wojcik, vice president of the National Business Group on Health. "Most firms prefer to tailor benefits to the needs of their employees and their resources."

Mental-health advocates would accept the Senate version, which has broad business support and has been championed by Republican Sens. Pete Domenici and Michael Enzi and Democrat Sen. Edward Kennedy, Patrick's father. "The easiest thing to do this year is to have the House pass the Senate version now," says Andrew Sperling, lobbyist for the National Alliance for the Mentally Ill.