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May 21, 2006
How Much Mental-Health Care Do Insurers Have to Cover? Why is Coverage so Poor? What you can do
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The Wall Street Journal (WSJ) has a good article in today's paper on the topic of Mental Health care insurance - and the question of "how much do insurance providers have to cover?". We address the more important issue of why insurance companies cover so little in the area of mental health care, and what you can do to change that.
In the WSJ article a person asked whether there are any laws that require insurers to broaden their coverage beyond the limited number of visits to a psychiatrist or therapist that may or may not be offered in a person's health care plan?
The response from the Wall Street Journal was:
Mental-health advocacy groups say the idea of parity is that an insurance plan provides the same level of benefits for mental-health care as it does for physical disorders and diseases. But there are many interpretations of what that means, and state laws run the gamut.
The WSJ mentions, however, that many states' laws are limited in what they cover. Some laws focus only on severe mental illnesses (perhaps because of the advocacy efforts of NAMI and other groups focused on helping the most seriously ill). Others state laws may require insurers to offer mental-health coverage, but not require the same level of benefits compared to other medical problems. Some States exempt plans for individuals or employers with 50 or fewer workers or don't require employers or individuals to buy plans with mental-health coverage included, even if insurers have to offer the coverage (this results in higher costs for those people who choose mental health coverage, because the costs are spread out over a smaller number of people).
The National Mental Health Association offers an assessment of state laws' relative strength, ranking Vermont's and Maryland's as among the most comprehensive. For more information, ask your state insurance department or the unit of your state government that oversees mental health. The National Alliance on Mental Illness also has local affiliates, as does the National Mental Health Association.
The WSJ article further mentions that the state laws generally don't cover larger companies that are "self-insured" businesses, though the larger companies are under federal regulations - advocates usually counter that the federal guidelines and rules for such insurance are weaker than the state guidelines.
On a related issue - NAMI recently conducted a nationwide analysis of the quality of mental health care in the US and reported "Every U.S. state has been scored on 39 specific criteria resulting in an overall grade and four sub-category grades for each state. The national average grade is D. Five states receive grades in the B range. Eight receive Fs.".
So why is insurance coverage as well as the services offered, so poor in the US? Why does it mattter?
Insurance coverage for mental health is important because it encourages early treatment, better treatment, and better outcomes (and would save tax-payers a lot of money). Most experts in schizophrenia now say that early treatment for schizophrenia is critical to a better long term outcome (see the Harvard Letter on Mental Health, for example). In the US, this early treatment is frequently very hard to get, with the result that people get a lot sicker before they get treatment - and a very large percentage end up in jail. In fact there are over 300,000 mentally ill in prison in the US right now, another half million are on court-ordered probation, some 700,000 mentally ill pass through the criminal court system each year, and the largest mental facility in America is not a hospital; it is the Los Angeles County jail. Because of the delay in treatment, lack of insurance coverage and poor treatment there is a much, much higher personal, social and financial cost than if there were good mental health insurance coverage widely available, with early treatment and better services.
What the Wall Street Journal doesn't mention is that many mental health advocates have suggested that these limitations on mental health insurance coverage can be expected as long as the Insurance company lobbyists are guiding the politician's decisions and not the voters. This is because of the heavy lobbying power (i.e. money) "invested" by the Insurance industry in making congressional lawmakers see their point of view (of the need to keep mental health insurance coverage at a minimum, so as to maximize profits). Researchers are even questioning whether insurance parity for mental illnesses can ever be achieved in a managed care system (Milbank Quarterly).
The insurance industry has continued a prolonged campaign of influence in attempts to block mental health parity legislation. According to the Center for Responsive Politics, since 1990, insurance interests have contributed approximately $175 million dollars to the campaign committees of federal candidates. Insurance interests have also been aggressive in their lobbying activity, spending some $87 million dollars on influencing the Congress and the Executive Branch in 2000 alone.
This is a bi-partisan issue -- in the 2004 election cycle Insurance firms donated over $35 million to politicians ($24 million to Republicans, $11 million to Democrats) and so far they've donated almost $15 million in the 2006 election cycle ($9.9 million to republicans, $5.1 million to Democrats). If you look at the lobbying records for 2004 for about any insurance company around you'll see they spent millions. (Note: these amounts don't include the true value of the frequent use of the corporate jets that the Insurance companies "loan" to the politicians at very low cost, nor the many other "gifts" that could get hidden by passing the money through multiple off-shore company accounts (as was done in the recent Abramoff scandal. and which many people believe continues today in various forms.)
If you're not happy about your health insurance coverage - then the people you need to inform (or replace) are the politicians who get money from the insurance company lobbyists -- politicians who are not listening to the people they represent.
However, the task of getting the politicians to listen to the voters is made even more difficult by the fact that a very high number of the lobbyists are former politicians (Source: "Hill a Steppingstone to K Street for Some") - who get paid very high salaries (frequently $300,000 to $1+ million per year) to influence their former colleagues to make changes to the bills before congress so that they are friendlier to the industry groups that pay the lobbyist salaries.
Moreover, since the politicians that are still in office realize that they can make large amounts of money by later becoming lobbyists, they are less likely to argue against what the lobbyists want. (If the politicians don't go along with the Insurance industry the won't get access to the high-paid lobbyist jobs which means that they could lose millions of dollars in income if they do not do what the insurance companies desire) - in other words, the incentive for the politicans to ignore the voter's desires (as long as the voters don't know too much and don't complain too much) is very high indeed. Despite changes to lobbying rules recently, most nonpartisan groups like Democracy21.org are saying that the "Lobbying Accountability and Transparency Act of 2006... is a sham".
Its interesting how the limitations on mental health insurance may increase the profits for the insurance companies, but also results in much higher costs for individuals, families and society. Mothers used to say that an "ounce of prevention" is "worth a pound of cure" - but the insurance companies find the best approach is to avoid offering the ounce of "prevention" and just let the families and government suffer the "pound" of costs that result.
The profits of the health insurance industry may be buttressed by the laws that allow minimal mental health care insurance, but the longer term costs to society are greatly increased. Is this really what the citizens of the US want? Is it really what is best for the country? Only you can decide.
Insurance Industry Battles Bill Mandating Mental Health Coverage
More Americans Without Health Insurance - 88.4 percent of all children were uninsured in 2002 - The number of Americans not covered by health insurance rose by 2.4 million to 43.6 million between 2001 and 2002, according to the U.S. Census Bureau.
Mental Health Parity - What Can It Accomplish in a Market Dominated by Managed Care? (Milbank Quarterly, 1998)
More information on how Lobbying influences Politician's decisions:
Democracy21 - a nonprofit, nonpartisan organization dedicated to making democracy work for all Americans
Posted by szadmin at May 21, 2006 02:38 PM
More Information on Mental Healthcare Insurance