Mental-health insurance coverage is about to improve nationwide, when the Affordable Care Act goes into effect Jan. 1.
The federal law, sometimes referred to as “Obamacare,” will require insurance companies to offer mental-health benefits, as well as ensure that small-group and individual health-care policies offer mental-health benefits equal to physical-health benefits.
Historically, medical insurance companies have discriminated against people with mental illnesses compared to those with physical illnesses. For example, while a person with a physical illness could visit a medical doctor or check into a general hospital an unlimited number of times, a person with mental illness would be limited in visits to mental hospitals or mental-health care professionals.
“If I had cancer and my doctor said I needed chemotherapy three times a week for 40 weeks in a row, I would get it,” says UNLV law professor Stacey Tovino, who specializes in health and medical law. “On the other hand, if a psychologist or psychiatrist said I was suicidal and I need counseling twice a week or three times a week, the insurance company wouldn’t allow it.”
Take, for example, the policies of Medicare, government-sponsored insurance for seniors. From its website:
“There’s no limit to the number of benefit periods you can have when you get mental-health care in a general hospital. You can also have multiple benefit periods when you get care in a psychiatric hospital. Remember, there’s a lifetime limit of 190 days.”
Furthermore, people ages 22 to 64 are not covered by the federal government for long-term inpatient care in “institutions for mental disease.” Only children and the elderly are covered. Adults are a state’s responsibility.
As federal law stands, “it encourages individuals with mental illnesses to see non-mental-health professionals,” Tovino says.
This provision of the Affordable Care Act will go into effect Jan. 1, 2014, and will offer three major improvements to mental-health care. It will expand federal mental-health parity law, mandate mental-health benefits and eliminate caps on visits.
Currently, only members of large-group health plans benefit from mental-health parity, which ensures mental benefits equal to physical health benefits offered. The Affordable Care Act will expand those benefits to people with small-group or individual plans.
Although large groups will not be required to offer mental-health benefits under ACA, Tovino notes that many already do.
“The theory was that people who are lucky enough to work for large employers, say Barnes & Noble or Walmart or Starbucks, they probably already have pretty good health benefits,” Tovino says. “The focus of the Affordable Care Act was folks who work for employers like a coffee shop or a hair salon who might have no or poor health insurance.”
It’s possible that the law will change to include large groups in 2017, Tovino says, but many large-group plans offer mental-health benefits voluntarily because they believe it’s the right thing to do and reduces expenses. Outpatient treatment is far less expensive than inpatient or emergency care.
Right now, the law does not require large groups to offer mental-health benefits, but if they do, those benefits must match what is offered in physical-health benefits.
In addition to the exceptions for large groups, the Affordable Care Act also excuses the self-insured and grandfathered insurance plans from complying. A grandfathered plan is defined as one in existence before March 23, 2010, when President Obama signed the bill. As long as coverage hasn’t significantly declined and premiums haven’t significantly increased, grandfathered plans are exempt.
For people with large group plans with mental-health coverage, this exception is likely inconsequential, but for holders of small-group insurance, it’s akin to punishment for job loyalty. And it’s not as easy as dropping a health plan and re-enrolling — the grandfather clause follows the policy not the policy holder.
“You’d have to hope that the grandfathered health plan already offers some good mental-health benefits, and you’d have to hope that you’re in a state with a strong mental-health parity law,” Tovino says. She says she would never advise dropping a group plan for an individual one because the quality of individual plans is often inferior.
Despite its limitations, Tovino sees the law as a benchmark for the nation.
“The Affordable Care Act is historic in terms of mental-health benefits for two reasons,” Tovino says. “It’s the first time we’ve required anyone other than large-group health plans to offer mental-health parity law, and two, because it requires many, but not all, to actually offer mental-health benefits. No other prior federal law ever required a health plan to offer mental-health benefits.”