Dropping Mental Health Coverage Costs More Than It Saves

While people around the country were celebrating the passage of the Mental Health Parity and Addiction Equity Act in 2008, some health plans were quietly planning to drop mental health and addiction coverage before the act became effective in 2011. Groups such as the Screen Actors Guild and the Plumbers Welfare Fund, as well as United Security Life and Health Insurance Co., will no longer provide such benefits to their insureds in an effort to control costs, reports the Wall Street Journal. See “Law Prompts Some Health Plans to Cut Mental Health Benefits,” http://online.wsj.com/article/SB10001424052748703395904576025410628499574.html.

Mental Health Parity legislation requires that plans offering mental health coverage do so under the same terms and conditions as coverage for physical ailments. To circumvent the law, some health plans have dropped the coverage or changed the benefits they offer their members. What this means for SAG members, for example, is that something as simple as a prescription for an antidepressant won’t be covered by insurance. And this itself is depressing news for the entertainment industry, which according to the federal Substance Abuse and Mental Health Services Administration and reported in the WSJ, ranks in the top three business segments in rates of illicit drug and heavy alcohol use.

The outlook, however, may not be so dismal for other industries. According to blogger David E. Williams, the WSJ may not have looked deeply enough into the Kaiser Family Foundation report that prompted the article. “Of firms surveyed by Kaiser Family Foundation, 69 percent were not changing their mental health and substance abuse benefits at all. Of the 31 percent that were changing such benefits, 66 percent were eliminating limits on coverage. Only 5 percent of the 31 percent (or about 1.5 percent of the total) were dropping their mental health coverage,” writes Williams. See “Wall Street Journal Lost Its Way on Mental Health Policy,” http://www.medcitynews.com/2010/12/wall-street-journal-lost-its-way-on-mental-health-policy/.

Although it’s likely too soon to know for sure how most health plans will ultimately respond to mental health parity laws, from our experience most will do whatever they can get away with to increase their profits. And that would be unfortunate.

Both the federal and state mental health parity laws have been lifesaving measures for more than people with substance abuse problems. They have allowed thousands of women with eating disorders to obtain the level of care they need for effective treatment and cure, something that was largely unavailable before such laws were enacted. Thousands more could be denied necessary residential treatment should more health plans choose to drop mental health coverage.
Williams notes that the Congressional Budget Office projected mental health parity would raise premiums a mere 0.4 percent, and pointed to actuarial evidence that that spending on mental health and substance abuse benefits lowers overall healthcare costs.

Those are statistics we urge the health insurance industry to ponder, rather than reacting to fears that mental health costs will impact their coffers.

If you have been denied health benefits for an eating disorder, addiction or other mental health issue, call us at (800) 446-7529. We can help
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