State Laws Mandating Mental Health Insurance Coverage F.
DEE
GOLDBERG,
M.H.A.
Staff Member President’s Commission Washington, D.C. Insurance
companies
on Mental
and
Health
administrators
ofgroup
insur-
ance plans have accepted the premise that coverage for mental illness must be different from coverage for other health problems, and thus insurers continue to limit their liability through various exclusions and restrictions. For several years providers and consumers of services
that mental
have
mandate illness;
worked
for
or regulate as ofJanuary
the
enactment
certain
1 1977, ,
of state
kinds
of coverage
a total
of22
laws
for states
had such statutes. The author presents a state-by-state summary of the provisions. He also classifies many of the provisions into six categories and discusses the probable basis for their enactment. #{149}Health insurance operates on the same basis as any other kind of insurance. In order to succeed financially and thus protect its subscribers, an insurance company must have a predictable percentage of loss. And it must be a percentage that, when spread over the total coyered population, means charging a premium not above what the members of that population can afford. For many years the insurance industry has been able to predict losses for expenses related to physical illness. However, the industry has historically maintained and even experimentally proven that mental health services are uninsurable, or insurable only when limits on the use of such benefits are included in a policy. Several industry-sponsored studies have shown that when mental health coverage is added to a group plan, the mental health benefits increase the total benefits paid. On the other hand, proponents of mental health coverage cite studies indicating that the use of mental health benefits is not excessive or that they eventually level off at a financially feasible percentage of the total benefits. They also present cost-effectiveness data to support their positions.
Mr. Goldberg formerly was a consultant in mental health tion. His address is 12008 Hitching Post Lane, Rockville, 20852.
administraMaryland
But to date, no definitive statement has been made. Insurance companies and administrators of group insurance plans have accepted the premise that insurance coverage for nervous and mental disorders is different from coverage for the treatment of other health problems-is, in fact, unique. Health insurance policies continue to contain various exclusions and restrictions designed to limit the insurer’s liability for treatment of .nental illness. Most of the exclusions and limitations are designed to restrict coverage to acute short-term treatment in a psychiatric unit of a general hospital, and to provide reimbursement only to the hospital and licensed physicians. Services of other mental health practitioners, state institutions, community mental health centers, partial hospitalization programs, and alcoholism and drug dependence rehabilitation facilities, as well as tong-term supportive outpatient therapies, are frequently excluded from insurance coverage. Even if such services or therapies are not specifically listed as exclusions in a contract, they often are effectively excluded as a result of other restrictions. There are at least seven common exclusions and limitations that appear in health insurance contracts. Coyerage for inpatient hospitalization for nervous and mental disorders may be limited to 30 days. Services of a state mental institution may be excluded. Outpatient services may be limited to physicians’ services, laboratory tests, and x-rays. Outpatient services may not be covered unless they are provided in an accredited and licensed general (not psychiatric) hospital. There may be an annual maximum of $1000 for outpatient treatment of nervous and mental disorders. In addition, co-insurance-the percentage of the cost that the patient rather than the insurer must pay-may be only 20 per cent for physical illnesses but 50 per cent for nervous and mental disorders. And finally, there may be a limitation for nervous and mental disorders that after the patient pays a deductible of $100, the policy will provide coverage for 50 per cent of a physician’s services for a maximum charge of $20 per session and a maximum liability of $250 during a given year. Such a provision is usually thought to mean that the insurer will pay only up to $10 a visit for up to 25 visits. Since the method of financing is a strong determinant
VOLUME
28
NUMBER
10 OCTOBER
1977
759
in the provision of treatment, and insurance payments are a considerable portion of funds available for the treatment of any illness, the mental health exclusions and limitations constitute very real barriers to treatment. For several years providers of mental health services, consumers, and mental health advocates have engaged in political activities aimed at reducing or eliminating these barriers. As a result, many states have enacted laws mandating the inclusion of certain kinds of coverage for nervous and mental disorders. Such regulations may appear in a state’s code under the subtitle of insurance, health, or mental health. From a search through the relevant codes of all the states, a state-by-state summary of the coverage required for mental illness has been compiled and is presented in Table 1. The summaries reflect the provisions in the codes as of January 1 1977. They show that as of that date, 22 states had statutes mandating or regulating in some way the coverage of mental illness, and 29 states had none. The provisions in the codes generally apply to group policies; in some instances they apply to individual policies as well. The fact that a state has not mandated some form of coverage for mental illness does not mean that coverage is not available in the state; often administrators of group plans negotiate contracts with insurance carriers for benefits and premiums that are mutually agreeable. And conversely, the existence of a state regulation that certain benefits must be included in plans, or offered as an option, does not guarantee that all insured citizens will have the mandated coverage. For example, an employer may provide coverage under a contract written in another state.
TABLE
1
State
Provisions
Delaware District
(Continued)
None of None
Columbia Florida
Mandatory
coverage
patient
care
in
appropriate
for
group
additional
patient
benefits
None
Hawaii
None
Idaho
None
days’
in-
only,
at an
premium.
are
If
provided,
to pay no more than insurance. Outpatient limited to $500. Georgia
30
policies
out-
patient
50 per benefits
has
cent
co-
may
be
,
Illinois
No
benefits
for
services
None
Iowa
None
Kansas
None
Kentucky
None
Louisiana
Carriers of
mandated
1
A summary in
state
of
codes
mental
as
of
State
Provisions
Alabama
None
health
insurance
January
1,
coverage
lacks
it
or
offer
equal
are
deny
claims
a hospital
solely
facilities.
the permitted) for other ill-
policyholders premium
to those
accidents
when
treatment
is by
a psychiatrist, by a licensed psychologist, or by a social worker acting under the prescription
Maine
No
of a physician.
benefits
mandated.
included,
Alaska
in
a higher
benefits
if benefits
not
surgical
must (with
nesses
1977
may
provided
because Indiana
But
carriers
option
TABLE
mandated.
included,
None
But
carrier
censed
must
psychologist
if benefits
are
reimburse the
a
same
way
li-
as
a
physician.
Arizona
None
Arkansas
None
California
provide or exclude coverage for mental health services. If carriers include services, they must reimburse licensed psychologists and licensed
Maryland
Insurance
carriers
social
workers
the
same
way
as
90
defined
benefits days’ in state
for 45 days’
partial
outpatient
pays
between
insurance.
psychia-
in
Mandatory
(as
care. patient paying
760
HOSPITAL
for
60 days’
Mandatory major-medical benefits of $1000, with 50 per cent co-insurance.
& COMMUNITY
acute
ill-
mental
to
care 50
Must
group
Massachusetts
improvement
for
and offer
policies,
which
patient
per
80
cent
optional
hospitaliza-
benefit. alcoholism.
for
co-
coverage,
for partial
an inpatient coverage
Mandatory patient
regulations).
benefits
for
subject
Must
offer
inpatient
hospitalization
up Connecticut
is
plus
tion as optional
Mandatory care,
benefits that
through short-term therapy; they include a minimum of 30 days’ inpatient care,
may
trists.
Colorado
Mandatory ness
inpatient
outpatient
PSYCHIATRY
coverage care
to $500
and per
for
for
12-month
of a comprehensive
60
outpatient period.
health or
days’
ization,
licensed
CM HC, licensed
and licensed psychologist are
in-
treatment service
accredited psychiatrist covered.
Services organhospital, or
TABLE
1
TABLE
(Continued)
1
(Continued)
State
Provisions
State
Provisions
Michigan
None
South Carolina
None
Minnesota
Mandatory alcoholism coverage in group plans for 28 days’ inpatient care and 130 hours’ outpatient treatment. Treatment of emotionally handicapped children must he reimbursed the same way as other medical illness. Carriers must provide ambulatory mental health coverage of 90 per cent of the first $600 of services if they are provided by a hospital, CMHC, licensed psychologist, or psychiatrist.
South
Mandatory
Mississippi
coverage
for
alcoholism
treat-
up to $1000. Licensed psychologists must he reimbursed the same way psychiatrists.
Dakota
None
Tennessee
Mandator’ inclusion mentally retarded. services for mental
Texas
No benefits mandated. included, tax-supported he excluded.
Utah
None
Vermont
Carriers must offer additional premium inpatient coverage age at 100 per cent visits and 80 per after, to a maximum must offer optional benefits equivalent care.
Virginia
Mandatory care.
coverage
Washington
No
benefits
ment
Missouri
None
Montana
None
Nebraska
None
Nevada
None
New
Hampshire
as
Mandatory inpatient benefits equal to those for other illnesses. Mandatory outpatient coverage for at least 15 visits. If coverage is offered under major-medical plans, the same co-insurance and deductibles must he offered as for other illnesses, up to an optional maximum of $3000 per year and $10,000 per lifetime.
specific
discrimination to
Jersey
None
New
Mexico
None
race,
New
York
None
North Carolina
Carriers may not exclude state-operated nervous and mental institutions.
North
Mandatory coverage, the same as for other illnesses, for groups of 50 or more, with minimum of 70 days’ inpatient care or 140 days’ partial hospitalization.
Dakota
Ohio
None
Oklahoma
None
Oregon
Coverage orders must group
plans.
Pennsylvania
None
Rhode
Mandatory outpatient benefits, exceed $1000, with patient paying cent co-insurance.
Island
not to 50 per
mandated,
but
states
“The
because
anti-
right of
or
creed, color, national origin, sex, the presence of any sensory, mental,
or
physical
handicap
.
is
recognized
and
a civil right. This right . the right to engage in
transactions.”
Wisconsin
Mandatory coverage for 30 days’ inpatient treatment for disorders including nervous and mental disorders, drug abuse, and alcoholism. Mandatory outpatient coverage for the first $500 of services.
Wyoming
None
KINDS
my
OF of the in state
PROVISIONS
mental-health-related provisions that do can be classified into six categories. classifications and the commentary are based on
The mental and nervous dishe offered as an option in
of 30 days’ inpatient
None
Virginia
Most exist of
as an option, at an if necessary, 45 days’ plus outpatient covercoverage of first five cent coverage thereof $500. Carriers partial hospitalization to 45 days’ inpatient
provision
declared to he shall include .
West
But if benefits are hospitals cannot
be free from discrimination
insurance
New
of benefits for the If a contract excludes illness, it must say SO.
experience
mental health
in dealing
with
insurance
contracts
as a
on study of the mental national health insurance programs, and on activities as an advocate for mental health coverage in health insurance plans. #{149} The health insurance contract must provide coyerage for a minimum number of days of inpatient psychiatric care. States having such a provision are Cob-
VOLUME
health coverage
codes
administrator, in proposed
28 NUMBER
10 OCTOBER
1977
761
While the insurance industry
can cite
studies showing that mental illness is essentially
uninsurable,
proponents of mental health coverage cite other studies indicating that coverage is financially feasible. rado, Connecticut, Florida, Maryland, Massachusetts, New Hampshire, North Dakota, Oregon (coverage must be offered as an option in group plans), Vermont (coyerage must be offered as an option), Virginia, and Wisconsin. The provision has been written in some codes because some insurance contracts totally exclude hospital coverage for nervous and mental disorders. #{149} The contract must provide coverage for a minimum number of days of partial hospitalization treatment. States with such provisions are Colorado, Maryland (coverage must be offered as an option in group policies only), North Dakota, and Vermont (coverage must be offered as an option). Partial hospitalization, usually defined as a structured treatment program of a minimum of four hours a day, is a treatment modality unique to the psychiatric field. It is generally recognized by the psychiatric field, if not as often by insurers, as an alternative to inpatient care. However, since insurance carriers customarily use only the classifications of inpatient and outpatient care, partial hospitalization, if it is covered at all, is usually covered as outpatient care. The co-insurance, limitations, and deductibles are usually much more stringent for outpatient than for inpatient care; thus the financial difference these provisions make for the patient encourages the use of inpatient care rather than partial hospitalization. #{149} The contract must provide coverage for a specified minimum amount of outpatient treatment. States with such provisions are Connecticut, Florida (coverage must be offered as an option), Maryland, Massachusetts, Minnesota, New Hampshire, Rhode Island, Vermont (coverage must be offered as an option), and Wisconsin. Most major-medical plans provide coverage for outpatient treatment on a co-insurance basis-that is, the patient must pay some expenses of the illness-and only after the patient has paid a first-dollar deductible. Frequently the treatment of nervous and mental conditions is excluded from major-medical coverage completely, or the patient must pay a higher percentage of the cost than for physical illnesses. Major-medical programs were designed to meet unusual expenses not specifically covered under basic policies, which provided for in-hospital treatment. Because the cost of most outpatient treatment for a single phys-
762
HOSPITAL
& COMMUNITY
PSYCHIATRY
ical illness usually does not reach the amount of the deductible, major-medical coverage generally is not used for physical illness. However, outpatient treatment of a single mental illness is often of extended duration, and thus majormedical plans would provide coverage. In fact, for longterm psychotherapy or psychoanalysis, the length of treatment may even be predictable during a contract year. Thus for psychiatric outpatient treatment the insurance principle that individual need is unpredictable is obviated. Insurers may then assert that more risk must be shared with individuals rather than with the group by requiring that patients pay a higher proportion of the co-insurance. #{149} The contract must cover the services of psychobogists, social workers, or both in the same way it covers the services of physicians. Such provisions apply in California, Louisiana, Maine, Massachusetts, Mmnesota, and Mississippi. Typical health insurance plans include the provision that the determination of physical illness must be made by a physician and, further, that a physician is the only one qualified to provide or direct treatment. However, in the mental health field, other kinds of professionals have been trained to treat illness, and in at least six states they are considered capable of providing mental health services without the direction of a physician. Insurance plans that fund treatment provided by professionals other than physicians in the same way as treatment provided by physicians are expanding the manpower capabilities of the mental health field. #{149} The contract must offer certain benefits or types of coverage as an option, perhaps at additional cost, which the subscribers can accept or decline. The states of Florida, Maryland, Oregon, and Vermont have such a provision. Such a clause requires the insurance companies and the administrators of group plans to address the issue of providing a certain kind of coverage while avoiding political arguments of government control of insurance companies or government regulations that affect competition; it also allows legislators to escape the responsibility for rising premiums. It is frequently a compromise that may or may not lead to the inclusion of such coverage. Careful monitoring of whether the coyerage is actually offered to subscribers and included in contracts should provide data to determine the need for further legislation. #{149} The contract may not exclude coverage of services solely on the basis that the hospital providing them does not have surgical facilities or that it is state-operated. States with such provisions are Illinois, Maryland, North Carolina, and Texas. To avoid coverage of services in state mental institutions and other psychiatric hospitals, some insurance contracts exclude state-operated institutions totally or include in the definition of a hospital the requirement that it have surgical facilities. The statutory
tion.
provisions
of
three
states
forbid
such
discrimina-
OUTLOOK
FOR
THE
National
FUTURE
Health The cally but sion tial tions
state of Washington does not have a statute specifirelating to insurance coverage for mental illness, in 1974 it enacted a broad antidiscrimination proviwithin the state code that has considerable potenfor eliminating exclusive definitions or other limitain health insurance contracts. The statute (see the Washington entry in Table 1 ) includes protection from discrimination for the mentally ill and specifically mandates their right to engage in insurance transactions. Follow-up on the effects of this statute on insurance contracts could provide data for helping change the many restrictions on mental health coverage that exist in other state codes, or that exist because of the lack of codes mandating coverage. Most of the provisions for mental health coverage that do exist in state codes were enacted only within the last three to five years. As various groups grapple with the problems of current restrictions and limitations, as well as the changes proposed through state legislatures and national health insurance programs, it becomes essential that proponents of mental health insurance become familiar with utilization experiences under plans providing mental health benefits and with the available cost-effectiveness data. The National Institute of Mental Health has funded several contracts to evaluate existing insurance programs. There are several research documents from those and other studies, including those of Louis Reed and Evelyn Myers of the American Psychiatric Association, that are helpful; they are listed in the bibliography below.U SELECTED
MENTAL
READINGS
HEALTH
Institute
of
Issues and National
Arrangements, Institute
Development
and
Quality
Mental
Care In the United
States:
Health,
Financing
A Study
and Assessment
Rockville, Maryland, Mental Health, Office
of
Analysis,
The
Financing,
Mental
of
1973. of Program
Utilization,
and
Mental Health Care in the United States, draft report, April 1976. L. S. Reed, Coverage and Utilization of Care for Mental Conditions Under Health Insurance: Various Studies, 197374, American Psychiatric Association, Washington, D.C., 1975. L. S. Reed, E. S. Myers, and P. L. Scheidemandel, Health Insurance and Psychiatric Care: Utilization and Cost, Amencan Psychiatric Association, Washington, D.C., 1972. S. S. Shanfstein, “ So Much for So Few: Insurance for Intensive Psychotherapy,’ ‘ paper presented at the annual meeting of the American Orthopsychiatric Association, April 14, 1977,
of
New
York
City.
S. S. Sharfstein, C. A. Taube, and I. D. Goldberg, “ Problems in Analyzing the Comparative Costs of Private Versus Public Psychiatric Care,” American Journal of Psychiatry, Vol. 134, January 1977, pp. 29-32. C. A. Taube, Utilization of Mental Health Facilities, 1971, National
Institute
of
Mental
Health,
Rockville,
Maryland,
1973.
ON
INSURANCE
Blue Cross of Western Pennsylvania, The Effect of Outpatient Psychiatric Utilization on the Costs of Providing Third-Party Coverage, Pittsburgh, December 1976. Blue Shield of Michigan, Final Report: Preparation of StatLstlcal
Tables
for
Psychiatric
Care
Under
Prepaid
Health
InsurancP, Detroit, December 1974. Committee on Governmental Agencies, The Effect of the Method of Payment on Mental Health Care Practice, Group for the Advancement of Psychiatry, New York City, Novemher 1975. R.
Through
Fink,
“
Financing
Psychiatric
Outpatient
Mental
Insurance,”
Mental
April 1971, pp. 143-150. M. A. Glasser and T. Duggan, Experience With UAW Members,”
chiatry, I. D.
Vol.
126, November
Goldberg,
G. Krantz,
Short-Term
Outpatient
Utilization
of Medical
1969, and
Psychiatric Services
“
Health
Hygiene,
Vol.
Care 55,
Prepaid Psychiatric Care American Journal of Psypp. 675-681. B. Z. Locke, Effect of a Therapy Benefit on the “
in a Prepaid
Group
Practice
Program,” Medical Care, Vol. 8, September-October 1970, pp. 419-428. M. I. Herz et al., “Day Versus Inpatient Hospitalization: A Controlled Study,” American Journal of Psychiatry, Vol. 127, April 1971, pp. 1371-1382. Medical
M. McIntyre,
pitalization,” pitals Journal,
“A Third-Party
Payor’s
View
of Partial
National Association of Private Psychiatric Vol. 8, Spring 1976, pp. 18-22.
HosHos-
VOLUME
28
NUMBER
10
OCTOBER
1977
763
DEE
GOLDBERG,
M.H.A.
Staff Member President’s Commission Washington, D.C. Insurance
companies
on Mental
and
Health
administrators
ofgroup
insur-
ance plans have accepted the premise that coverage for mental illness must be different from coverage for other health problems, and thus insurers continue to limit their liability through various exclusions and restrictions. For several years providers and consumers of services
that mental
have
mandate illness;
worked
for
or regulate as ofJanuary
the
enactment
certain
1 1977, ,
of state
kinds
of coverage
a total
of22
laws
for states
had such statutes. The author presents a state-by-state summary of the provisions. He also classifies many of the provisions into six categories and discusses the probable basis for their enactment. #{149}Health insurance operates on the same basis as any other kind of insurance. In order to succeed financially and thus protect its subscribers, an insurance company must have a predictable percentage of loss. And it must be a percentage that, when spread over the total coyered population, means charging a premium not above what the members of that population can afford. For many years the insurance industry has been able to predict losses for expenses related to physical illness. However, the industry has historically maintained and even experimentally proven that mental health services are uninsurable, or insurable only when limits on the use of such benefits are included in a policy. Several industry-sponsored studies have shown that when mental health coverage is added to a group plan, the mental health benefits increase the total benefits paid. On the other hand, proponents of mental health coverage cite studies indicating that the use of mental health benefits is not excessive or that they eventually level off at a financially feasible percentage of the total benefits. They also present cost-effectiveness data to support their positions.
Mr. Goldberg formerly was a consultant in mental health tion. His address is 12008 Hitching Post Lane, Rockville, 20852.
administraMaryland
But to date, no definitive statement has been made. Insurance companies and administrators of group insurance plans have accepted the premise that insurance coverage for nervous and mental disorders is different from coverage for the treatment of other health problems-is, in fact, unique. Health insurance policies continue to contain various exclusions and restrictions designed to limit the insurer’s liability for treatment of .nental illness. Most of the exclusions and limitations are designed to restrict coverage to acute short-term treatment in a psychiatric unit of a general hospital, and to provide reimbursement only to the hospital and licensed physicians. Services of other mental health practitioners, state institutions, community mental health centers, partial hospitalization programs, and alcoholism and drug dependence rehabilitation facilities, as well as tong-term supportive outpatient therapies, are frequently excluded from insurance coverage. Even if such services or therapies are not specifically listed as exclusions in a contract, they often are effectively excluded as a result of other restrictions. There are at least seven common exclusions and limitations that appear in health insurance contracts. Coyerage for inpatient hospitalization for nervous and mental disorders may be limited to 30 days. Services of a state mental institution may be excluded. Outpatient services may be limited to physicians’ services, laboratory tests, and x-rays. Outpatient services may not be covered unless they are provided in an accredited and licensed general (not psychiatric) hospital. There may be an annual maximum of $1000 for outpatient treatment of nervous and mental disorders. In addition, co-insurance-the percentage of the cost that the patient rather than the insurer must pay-may be only 20 per cent for physical illnesses but 50 per cent for nervous and mental disorders. And finally, there may be a limitation for nervous and mental disorders that after the patient pays a deductible of $100, the policy will provide coverage for 50 per cent of a physician’s services for a maximum charge of $20 per session and a maximum liability of $250 during a given year. Such a provision is usually thought to mean that the insurer will pay only up to $10 a visit for up to 25 visits. Since the method of financing is a strong determinant
VOLUME
28
NUMBER
10 OCTOBER
1977
759
in the provision of treatment, and insurance payments are a considerable portion of funds available for the treatment of any illness, the mental health exclusions and limitations constitute very real barriers to treatment. For several years providers of mental health services, consumers, and mental health advocates have engaged in political activities aimed at reducing or eliminating these barriers. As a result, many states have enacted laws mandating the inclusion of certain kinds of coverage for nervous and mental disorders. Such regulations may appear in a state’s code under the subtitle of insurance, health, or mental health. From a search through the relevant codes of all the states, a state-by-state summary of the coverage required for mental illness has been compiled and is presented in Table 1. The summaries reflect the provisions in the codes as of January 1 1977. They show that as of that date, 22 states had statutes mandating or regulating in some way the coverage of mental illness, and 29 states had none. The provisions in the codes generally apply to group policies; in some instances they apply to individual policies as well. The fact that a state has not mandated some form of coverage for mental illness does not mean that coverage is not available in the state; often administrators of group plans negotiate contracts with insurance carriers for benefits and premiums that are mutually agreeable. And conversely, the existence of a state regulation that certain benefits must be included in plans, or offered as an option, does not guarantee that all insured citizens will have the mandated coverage. For example, an employer may provide coverage under a contract written in another state.
TABLE
1
State
Provisions
Delaware District
(Continued)
None of None
Columbia Florida
Mandatory
coverage
patient
care
in
appropriate
for
group
additional
patient
benefits
None
Hawaii
None
Idaho
None
days’
in-
only,
at an
premium.
are
If
provided,
to pay no more than insurance. Outpatient limited to $500. Georgia
30
policies
out-
patient
50 per benefits
has
cent
co-
may
be
,
Illinois
No
benefits
for
services
None
Iowa
None
Kansas
None
Kentucky
None
Louisiana
Carriers of
mandated
1
A summary in
state
of
codes
mental
as
of
State
Provisions
Alabama
None
health
insurance
January
1,
coverage
lacks
it
or
offer
equal
are
deny
claims
a hospital
solely
facilities.
the permitted) for other ill-
policyholders premium
to those
accidents
when
treatment
is by
a psychiatrist, by a licensed psychologist, or by a social worker acting under the prescription
Maine
No
of a physician.
benefits
mandated.
included,
Alaska
in
a higher
benefits
if benefits
not
surgical
must (with
nesses
1977
may
provided
because Indiana
But
carriers
option
TABLE
mandated.
included,
None
But
carrier
censed
must
psychologist
if benefits
are
reimburse the
a
same
way
li-
as
a
physician.
Arizona
None
Arkansas
None
California
provide or exclude coverage for mental health services. If carriers include services, they must reimburse licensed psychologists and licensed
Maryland
Insurance
carriers
social
workers
the
same
way
as
90
defined
benefits days’ in state
for 45 days’
partial
outpatient
pays
between
insurance.
psychia-
in
Mandatory
(as
care. patient paying
760
HOSPITAL
for
60 days’
Mandatory major-medical benefits of $1000, with 50 per cent co-insurance.
& COMMUNITY
acute
ill-
mental
to
care 50
Must
group
Massachusetts
improvement
for
and offer
policies,
which
patient
per
80
cent
optional
hospitaliza-
benefit. alcoholism.
for
co-
coverage,
for partial
an inpatient coverage
Mandatory patient
regulations).
benefits
for
subject
Must
offer
inpatient
hospitalization
up Connecticut
is
plus
tion as optional
Mandatory care,
benefits that
through short-term therapy; they include a minimum of 30 days’ inpatient care,
may
trists.
Colorado
Mandatory ness
inpatient
outpatient
PSYCHIATRY
coverage care
to $500
and per
for
for
12-month
of a comprehensive
60
outpatient period.
health or
days’
ization,
licensed
CM HC, licensed
and licensed psychologist are
in-
treatment service
accredited psychiatrist covered.
Services organhospital, or
TABLE
1
TABLE
(Continued)
1
(Continued)
State
Provisions
State
Provisions
Michigan
None
South Carolina
None
Minnesota
Mandatory alcoholism coverage in group plans for 28 days’ inpatient care and 130 hours’ outpatient treatment. Treatment of emotionally handicapped children must he reimbursed the same way as other medical illness. Carriers must provide ambulatory mental health coverage of 90 per cent of the first $600 of services if they are provided by a hospital, CMHC, licensed psychologist, or psychiatrist.
South
Mandatory
Mississippi
coverage
for
alcoholism
treat-
up to $1000. Licensed psychologists must he reimbursed the same way psychiatrists.
Dakota
None
Tennessee
Mandator’ inclusion mentally retarded. services for mental
Texas
No benefits mandated. included, tax-supported he excluded.
Utah
None
Vermont
Carriers must offer additional premium inpatient coverage age at 100 per cent visits and 80 per after, to a maximum must offer optional benefits equivalent care.
Virginia
Mandatory care.
coverage
Washington
No
benefits
ment
Missouri
None
Montana
None
Nebraska
None
Nevada
None
New
Hampshire
as
Mandatory inpatient benefits equal to those for other illnesses. Mandatory outpatient coverage for at least 15 visits. If coverage is offered under major-medical plans, the same co-insurance and deductibles must he offered as for other illnesses, up to an optional maximum of $3000 per year and $10,000 per lifetime.
specific
discrimination to
Jersey
None
New
Mexico
None
race,
New
York
None
North Carolina
Carriers may not exclude state-operated nervous and mental institutions.
North
Mandatory coverage, the same as for other illnesses, for groups of 50 or more, with minimum of 70 days’ inpatient care or 140 days’ partial hospitalization.
Dakota
Ohio
None
Oklahoma
None
Oregon
Coverage orders must group
plans.
Pennsylvania
None
Rhode
Mandatory outpatient benefits, exceed $1000, with patient paying cent co-insurance.
Island
not to 50 per
mandated,
but
states
“The
because
anti-
right of
or
creed, color, national origin, sex, the presence of any sensory, mental,
or
physical
handicap
.
is
recognized
and
a civil right. This right . the right to engage in
transactions.”
Wisconsin
Mandatory coverage for 30 days’ inpatient treatment for disorders including nervous and mental disorders, drug abuse, and alcoholism. Mandatory outpatient coverage for the first $500 of services.
Wyoming
None
KINDS
my
OF of the in state
PROVISIONS
mental-health-related provisions that do can be classified into six categories. classifications and the commentary are based on
The mental and nervous dishe offered as an option in
of 30 days’ inpatient
None
Virginia
Most exist of
as an option, at an if necessary, 45 days’ plus outpatient covercoverage of first five cent coverage thereof $500. Carriers partial hospitalization to 45 days’ inpatient
provision
declared to he shall include .
West
But if benefits are hospitals cannot
be free from discrimination
insurance
New
of benefits for the If a contract excludes illness, it must say SO.
experience
mental health
in dealing
with
insurance
contracts
as a
on study of the mental national health insurance programs, and on activities as an advocate for mental health coverage in health insurance plans. #{149} The health insurance contract must provide coyerage for a minimum number of days of inpatient psychiatric care. States having such a provision are Cob-
VOLUME
health coverage
codes
administrator, in proposed
28 NUMBER
10 OCTOBER
1977
761
While the insurance industry
can cite
studies showing that mental illness is essentially
uninsurable,
proponents of mental health coverage cite other studies indicating that coverage is financially feasible. rado, Connecticut, Florida, Maryland, Massachusetts, New Hampshire, North Dakota, Oregon (coverage must be offered as an option in group plans), Vermont (coyerage must be offered as an option), Virginia, and Wisconsin. The provision has been written in some codes because some insurance contracts totally exclude hospital coverage for nervous and mental disorders. #{149} The contract must provide coverage for a minimum number of days of partial hospitalization treatment. States with such provisions are Colorado, Maryland (coverage must be offered as an option in group policies only), North Dakota, and Vermont (coverage must be offered as an option). Partial hospitalization, usually defined as a structured treatment program of a minimum of four hours a day, is a treatment modality unique to the psychiatric field. It is generally recognized by the psychiatric field, if not as often by insurers, as an alternative to inpatient care. However, since insurance carriers customarily use only the classifications of inpatient and outpatient care, partial hospitalization, if it is covered at all, is usually covered as outpatient care. The co-insurance, limitations, and deductibles are usually much more stringent for outpatient than for inpatient care; thus the financial difference these provisions make for the patient encourages the use of inpatient care rather than partial hospitalization. #{149} The contract must provide coverage for a specified minimum amount of outpatient treatment. States with such provisions are Connecticut, Florida (coverage must be offered as an option), Maryland, Massachusetts, Minnesota, New Hampshire, Rhode Island, Vermont (coverage must be offered as an option), and Wisconsin. Most major-medical plans provide coverage for outpatient treatment on a co-insurance basis-that is, the patient must pay some expenses of the illness-and only after the patient has paid a first-dollar deductible. Frequently the treatment of nervous and mental conditions is excluded from major-medical coverage completely, or the patient must pay a higher percentage of the cost than for physical illnesses. Major-medical programs were designed to meet unusual expenses not specifically covered under basic policies, which provided for in-hospital treatment. Because the cost of most outpatient treatment for a single phys-
762
HOSPITAL
& COMMUNITY
PSYCHIATRY
ical illness usually does not reach the amount of the deductible, major-medical coverage generally is not used for physical illness. However, outpatient treatment of a single mental illness is often of extended duration, and thus majormedical plans would provide coverage. In fact, for longterm psychotherapy or psychoanalysis, the length of treatment may even be predictable during a contract year. Thus for psychiatric outpatient treatment the insurance principle that individual need is unpredictable is obviated. Insurers may then assert that more risk must be shared with individuals rather than with the group by requiring that patients pay a higher proportion of the co-insurance. #{149} The contract must cover the services of psychobogists, social workers, or both in the same way it covers the services of physicians. Such provisions apply in California, Louisiana, Maine, Massachusetts, Mmnesota, and Mississippi. Typical health insurance plans include the provision that the determination of physical illness must be made by a physician and, further, that a physician is the only one qualified to provide or direct treatment. However, in the mental health field, other kinds of professionals have been trained to treat illness, and in at least six states they are considered capable of providing mental health services without the direction of a physician. Insurance plans that fund treatment provided by professionals other than physicians in the same way as treatment provided by physicians are expanding the manpower capabilities of the mental health field. #{149} The contract must offer certain benefits or types of coverage as an option, perhaps at additional cost, which the subscribers can accept or decline. The states of Florida, Maryland, Oregon, and Vermont have such a provision. Such a clause requires the insurance companies and the administrators of group plans to address the issue of providing a certain kind of coverage while avoiding political arguments of government control of insurance companies or government regulations that affect competition; it also allows legislators to escape the responsibility for rising premiums. It is frequently a compromise that may or may not lead to the inclusion of such coverage. Careful monitoring of whether the coyerage is actually offered to subscribers and included in contracts should provide data to determine the need for further legislation. #{149} The contract may not exclude coverage of services solely on the basis that the hospital providing them does not have surgical facilities or that it is state-operated. States with such provisions are Illinois, Maryland, North Carolina, and Texas. To avoid coverage of services in state mental institutions and other psychiatric hospitals, some insurance contracts exclude state-operated institutions totally or include in the definition of a hospital the requirement that it have surgical facilities. The statutory
tion.
provisions
of
three
states
forbid
such
discrimina-
OUTLOOK
FOR
THE
National
FUTURE
Health The cally but sion tial tions
state of Washington does not have a statute specifirelating to insurance coverage for mental illness, in 1974 it enacted a broad antidiscrimination proviwithin the state code that has considerable potenfor eliminating exclusive definitions or other limitain health insurance contracts. The statute (see the Washington entry in Table 1 ) includes protection from discrimination for the mentally ill and specifically mandates their right to engage in insurance transactions. Follow-up on the effects of this statute on insurance contracts could provide data for helping change the many restrictions on mental health coverage that exist in other state codes, or that exist because of the lack of codes mandating coverage. Most of the provisions for mental health coverage that do exist in state codes were enacted only within the last three to five years. As various groups grapple with the problems of current restrictions and limitations, as well as the changes proposed through state legislatures and national health insurance programs, it becomes essential that proponents of mental health insurance become familiar with utilization experiences under plans providing mental health benefits and with the available cost-effectiveness data. The National Institute of Mental Health has funded several contracts to evaluate existing insurance programs. There are several research documents from those and other studies, including those of Louis Reed and Evelyn Myers of the American Psychiatric Association, that are helpful; they are listed in the bibliography below.U SELECTED
MENTAL
READINGS
HEALTH
Institute
of
Issues and National
Arrangements, Institute
Development
and
Quality
Mental
Care In the United
States:
Health,
Financing
A Study
and Assessment
Rockville, Maryland, Mental Health, Office
of
Analysis,
The
Financing,
Mental
of
1973. of Program
Utilization,
and
Mental Health Care in the United States, draft report, April 1976. L. S. Reed, Coverage and Utilization of Care for Mental Conditions Under Health Insurance: Various Studies, 197374, American Psychiatric Association, Washington, D.C., 1975. L. S. Reed, E. S. Myers, and P. L. Scheidemandel, Health Insurance and Psychiatric Care: Utilization and Cost, Amencan Psychiatric Association, Washington, D.C., 1972. S. S. Shanfstein, “ So Much for So Few: Insurance for Intensive Psychotherapy,’ ‘ paper presented at the annual meeting of the American Orthopsychiatric Association, April 14, 1977,
of
New
York
City.
S. S. Sharfstein, C. A. Taube, and I. D. Goldberg, “ Problems in Analyzing the Comparative Costs of Private Versus Public Psychiatric Care,” American Journal of Psychiatry, Vol. 134, January 1977, pp. 29-32. C. A. Taube, Utilization of Mental Health Facilities, 1971, National
Institute
of
Mental
Health,
Rockville,
Maryland,
1973.
ON
INSURANCE
Blue Cross of Western Pennsylvania, The Effect of Outpatient Psychiatric Utilization on the Costs of Providing Third-Party Coverage, Pittsburgh, December 1976. Blue Shield of Michigan, Final Report: Preparation of StatLstlcal
Tables
for
Psychiatric
Care
Under
Prepaid
Health
InsurancP, Detroit, December 1974. Committee on Governmental Agencies, The Effect of the Method of Payment on Mental Health Care Practice, Group for the Advancement of Psychiatry, New York City, Novemher 1975. R.
Through
Fink,
“
Financing
Psychiatric
Outpatient
Mental
Insurance,”
Mental
April 1971, pp. 143-150. M. A. Glasser and T. Duggan, Experience With UAW Members,”
chiatry, I. D.
Vol.
126, November
Goldberg,
G. Krantz,
Short-Term
Outpatient
Utilization
of Medical
1969, and
Psychiatric Services
“
Health
Hygiene,
Vol.
Care 55,
Prepaid Psychiatric Care American Journal of Psypp. 675-681. B. Z. Locke, Effect of a Therapy Benefit on the “
in a Prepaid
Group
Practice
Program,” Medical Care, Vol. 8, September-October 1970, pp. 419-428. M. I. Herz et al., “Day Versus Inpatient Hospitalization: A Controlled Study,” American Journal of Psychiatry, Vol. 127, April 1971, pp. 1371-1382. Medical
M. McIntyre,
pitalization,” pitals Journal,
“A Third-Party
Payor’s
View
of Partial
National Association of Private Psychiatric Vol. 8, Spring 1976, pp. 18-22.
HosHos-
VOLUME
28
NUMBER
10
OCTOBER
1977
763
