Equal Coverage for Mental-Health Care

No longer can medical coverage offer fewer restrictions, thanks to a new federal law.

Video: Health Insurance Basics

Video: Health Insurance Basics

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Access to mental-health care should soon be cheaper and easier for millions of Americans, thanks to a "mental-health parity" law signed by President Bush this month. After a 10-year battle by mental-health advocates, depression and bipolar disorder, for example, will reach equal footing with heart disease or cancer on Jan. 1, 2010.

The new law doesn't cover everyone; most notably, employees of companies with 50 or fewer workers are excluded, as well as people who buy their own policies. But it comes as a great relief to those who will benefit. "It's really going to affect me when I go out into the workforce," says Marley Prunty-Lara, a 23-year-old graduate student in Minneapolis. She was diagnosed with bipolar disorder at age 15. After her parents were unable to find treatment for her in Sioux Falls, S.D., they had to take out a second mortgage in order to afford an out-of-state hospital. As a result of treatment, Prunty-Lara was able to get her illness under control and finish high school and college. "The reason I'm going to grad school is so that I can get a better job with mental-health benefits," Prunty-Lara says. "Because of parity, I'm looking forward to knowing that when I do go out into the workforce, I'll be covered equally."

Starting in 2010, group health plans will no longer be allowed to impose different limitations on mental-health and substance-abuse coverage than they do for medical treatment. In other words, deductibles, copays, covered hospital days, and any limits on outpatient treatments must be identical. And for the first time, employers who self-insure are required to provide equal coverage, a change that brings parity to 82 million people covered through so-called ERISA plans.

Since 42 states already have their own form of parity laws and the federal government has required parity from insurers who participate in its benefits plans since 2001, many people won't notice much of a difference. "Many insurers are already in compliance, frankly," says Andrew Sperling, director of legislative affairs for the National Alliance on Mental Illness. Under the federal version, insurers can still require that services be medically necessary and can require preapproval or prior review. They can also require medical evidence that the treatments are effective.

Medicare recipients aren't affected by this law; a measure adopted earlier this year already eliminated discriminatory copayments in that program, which had been capped at 50 percent for mental-health treatment, compared with 20 percent for most doctors' services. The Medicare change is being phased in gradually and won't be fully in force until 2016.

Access to care will remain an issue, no matter how good the insurance coverage. Jim Hackett found that out firsthand when he sought psychiatric care for his teenage daughter after she had been sexually assaulted. Hackett is CEO of Anadarko Petroleum in Houston. Not only did the company's employees already have mental-health parity, but he could have afforded to pay out of pocket. But the family had to look out of state for an appropriate child psychiatrist. "Now that we have the funding for people to get over the stigma of mental illness, we have to make sure that facilities and doctors will exist for them as well," Hackett says. As a business manager, he believes that the increased cost of parity coverage, which was found to be 0.5 percent of premiums in a 2006 study of federal employee insurance, is more than made up for by increased productivity from employees who are ill themselves or caring for a sick relative.

"Mental-health parity will be playing a massive role in my life," says Briana Fishbein, a 26-year-old resident of Matthews, N.C. She first sought help at age 15, when she considered suicide, and was diagnosed with post-traumatic stress disorder and bipolar disorder. Medication and meetings with a psychiatrist helped, but her parents were paying $180 out of pocket for the weekly doctor visits, as well as forking over large copays for psychiatric meds. She recently asked her father how much he'd spent out of pocket on her psychiatric care since then; $10,000, maybe? "He laughed and said, 'More on the lines of $30,000.' "