The California Mental Health Parity Statute requires health insurance policies which cover mental illness to cover severe mental illness under the same terms and conditions as physical illness. Anorexia nervosa and bulimia nervosa are included in the definition of severe mental illness.
Almost every insurance company in California agrees that this statute requires health insurance policies to cover residential treatment of eating disorders. But, one large California insurance company – Blue Shield – has a specific exclusion for residential treatment in its policies and refuses to cover residential treatment for any eating disorder.
We currently have a case pending in the Ninth Circuit Court of Appeal challenging Blue Shield’s position. The Blue Shield policy in that case covers three levels of treatment for physical illness: inpatient, skilled nursing, and outpatient. For severe mental illness, however, the policy only covers two levels of treatment: inpatient and outpatient. How can the policy possibly cover physical and severe mental illness under the “same terms and conditions” – which is what Mental Health Parity requires – when an entire level of treatment is not covered for severe mental illnesses such as eating disorders?