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More employers are providing mental health coverage to their employees, but they are doing so by offering programs that are increasingly saddled with restrictions, according to a new survey published in the May/June issue of Health Affairs.
The survey by economist Gail Jensen, Ph.D., of Wayne State University in Detroit and colleagues, compared data from a 1991 survey by the Health Insurance Association of America (HIAA) with data from a 1995 survey by KPMG Peat Marwick and Wayne State University. The comparison showed that between 1991 and 1995 the proportion of insured workers with mental health benefits increased significantly.
By 1995, 93 percent of insured employees were covered for inpatient psychiatric care, compared with 87 percent four years earlier. The proportion with outpatient benefits rose from 86 percent to 92 percent over the same period. The changes were sweeping, occurring for workers in firms of all sizes nationwide and within all four major types of health plans. Those plans are preferred provider organizations (PPO's), health maintenance organizations (HMO's), point of service (POS), which is a hybrid of the HMO and PPO, and conventional fee for service.
The data cover a period prior to the 1996 Mental Health Parity Act, which went into effect in January. But author Jensen notes that many states had passed their own mental health insurance mandates by 1995, and that one consequence was that some firms moved from purchasing insurance to self-insuring, which let them avoid state mandates as allowed by the federal Employee Retirement Income Security Act (ERISA). These firms are, however, subject to federal law and hence must comply with the 1996 Mental Health Parity Act.
"There is a large body of research that has looked at the effect of state-level mandates for mental health benefits, and that research has shown there are unintended consequences," Jensen told Psychiatric News. Although some firms switched to self-insurance, a far more common pattern was the imposition of more formal and informal limits on the provision of the mandated mental health benefits, she said.
Informal limits imply strict utilization review and careful scrutiny of mental health benefits claims, she explained. "In the 1990's, these may be more constraining than the apparent limits defined in a specific health plan," she noted. "I think it's a whole other level of constraint on coverage." This is an unresearched area, however, and the precise impact of utilization review on access to mental health services is unknown, she added.
Joanne Ritvo, M.D., chair of APA's Committee on Managed Care, spoke with Psychiatric News. "That companies have used ERISA and the more informal limits to restrict access to care is unconscionable. As Dr. Jensen knows, the precise impact is as yet unknown. It is my impression as a clinician, however, that micromanaging care authorization and provision of psychiatric and substance abuse services has increased significantly since 1996."
It may not be possible for advocates of better mental health benefits to prevent unintended consequences of partial parity laws as they strive for true, universal parity, said Jensen. But being informed about the benefits available in different plans may help people receive better mental health services, she said.
Just how much difference will the 1996 Mental Health Parity Act make, given that it does not require true parity and permits a variety of limits not applied to other medical care?
"I think it may encourage firms to tighten other benefit limits as a defensive gesture," said Jensen. This may include dropping existing coverage of substance abuse, which is not required under the law, and adding a panoply of restrictions, including day limits, dollar limits, higher copayments, and carveouts. In fact, the 1996 law requires only that aggregate annual and lifetime limits for mental health benefits be the same as those for other benefits. It also has an opt-out provision for firms with 50 or fewer employees, firms that choose to provide no mental health benefits, and firms that document that providing the mandated benefit increases their premium costs by 1 percent or more.
It is hard to tease out how the new law may have impacted the growing trend toward managed care, said Jensen, but it is clear that all kinds of health plans have added limits when faced with state mandates. A revised parity law was introduced in Congress this March (Psychiatric News, April 17). It mandates coverage of substance abuse, ends the 1 percent exemption, and ensures that mental health benefits be subject to limits no more stringent than those for other medical services regarding frequency of treatment, number of visits, and copayments.
Many advocates of parity have argued that better care saves employers money by improving employee morale and productivity. "Some research suggests there is a cost offset," said Jensen, "but there is other research that has found very little offset effect." Employers remain unconvinced.
"Although the passage of partial parity was a step in the right direction, we must pass the revised parity law," remarked Ritvo. "We must get hard data as well as cost-offset data that show the value in increased productivity, decreased absenteeism, and, most importantly, decreased suffering."
At a press conference to announce the introduction of the revised parity bill in March, former APA president Harold Eist, M.D., articulated the case for parity in human, economic, and political terms. Parity, said Eist, "is not only affordable; we cannot afford not to provide it. Failing to do so will unreasonably increase human misery while actually massively increasing costs, and it will drive a wedge between the people and the representatives who have let them down."
Dusting off her crystal ball, Jensen predicted that the experience of the states that have adopted true parity, which now include only Minnesota and Vermont, will determine whether a federal law mandating true, comprehensive parity ever wins approval.
"We are now in a position to see what's going to happen, because for the first time in history we have some states that have adopted [true parity]," she concluded.
-R.B.K.