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Parity laws are gaining ground across the country as state legislatures continue to consider bills that would provide insurance coverage for mental health equitable to that of physical health. Sixteen states (Arkansas, California, Colorado, Connecticut, Delaware, Indiana, Maine, Maryland, Minnesota, New Hampshire, North Carolina, Rhode Island, South Dakota, Tennessee, Texas, and Vermont) have enacted laws.
Nearly 70 parity bills were introduced or carried over in 29 states during the 1998 legislative session, and three laws were passed this year. Twenty states considered coverage of all mental illnesses, 15 states considered coverage of a defined set of mental disorders, and 10 states introduced bills covering substance abuse disorders. Three state bills provided coverage for state employees.
State legislatures have recently begun to include managed care concepts in the language of their parity bills. Vermont, which adopted its parity law in 1997, was one of the first states to include managed care provisions, and now several states do so.
APA District branches, with the assistance of theDivision of Government Relations (DGR), have been working with mental health advocates to pass parity legislation at the state level since the late 1980's. A summary of selected state parity legislation appears below.
The law permits insurers to limit coverage of "serious mental illness" to those services that are deemed medically necessary. The law does not apply when a beneficiary of a plan that provides mental health benefits within a network of providers obtains out-of-network services.
Tennessee
H.B. 3177, also signed into law in May, prohibits group health plans from imposing aggregate lifetime or annual limits on mental health benefits, in terms of dollar amounts, that are less than those imposed on medical benefits. The plans also may not establish a separate limit for out-of-pocket cost-sharing for mental health services that is more costly than that for other services.
The law requires group health plans to provide certain minimum benefits for mental health services, including at least 20 hospital inpatient days a year and 25 outpatient visits a year, excluding visits for medication management.
The law does not apply to group health plans issued to employers with two to 25 employees or services for substance abuse disorders. After a year of experience, insurers may seek to avoid compliance if they can document that the plan experienced a cost increase of more than 1 percent.
South Dakota
H.B. 1262, enacted in March, requires coverage for the treatment and diagnosis of "biologically based mental illnesses" with the same dollar limits, deductibles, coinsurance factors, and restrictions as provided for other covered illnesses. The new law applies to individual and group health insurance policies, small employer health benefit plans, service or indemnity-type contracts issued by nonprofit medical and surgical or hospital service plan corporations, and health maintenance contracts.
"Biologically based mental illness" is defined as any mental illness that current medical science affirms is caused by a neurobiological disorder of the brain; substantially impairs perception, cognitive function, judgment, and emotional stability; and limits the life activities of the person with the illness. The term includes schizophrenia, bipolar disorder, major depression, and obsessive-compulsive disorder and other anxiety disorders that cause significant impairment of function, and other disorders proven to be "biologically based mental illnesses."
S.B. 1265 requires benefits to be provided for a range of services that allow medically necessary treatment to take place in the least restrictive clinically appropriate setting.
Louisiana
Two parity bills were considered by the Louisiana legislature during the 1998 session. S.B. 167 passed the Senate on April 14 with amendments that direct the Department of Health and Hospitals and the State Insurance Commissioner to define "severe mental illness." H.B. 120, which failed the House Insurance Committee by a 3-4 vote, would have covered specified "severe mental illnesses."
New Jersey
S.B. 86, which passed the Senate by 36-1 on March 30, requires insurers to cover the treatment of "biologically based mental illness" under the same terms and conditions (e.g., copayments, deductibles, or benefit limits) as any other sickness.
"Biologically based mental illness" is defined as a "mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with the illness...."
New Mexico
Governor Johnson vetoed H.B. 315 in March. The bill would have established a two-year pilot program for mental health insurance parity for state employees. "Severe, persistent, biologically based mental illnesses" would have been covered at parity with any other physical illness with respect to the terms, conditions, rates, benefits, or requirements of the insurance contract.
New York
In February the New York Assembly passed A.B. 8315B. The bill requires all managed health care and indemnity insurance plans that cover the "diagnosis and treatment of mental, nervous, or emotional disorders or ailments" to do so on the same basis, terms, and conditions as they do any other illness in such plans.
The New York State Psychiatric Association teamed with the state medical society to form a coalition of mental health consumer and provider groups to focus on parity. The Mental Health Equality Not Discrimination (MEND) campaign, which has more than 60 member groups, has undertaken several projects to promote parity, such as holding Picnics for Parity in key legislative districts; collecting state-specific actuarial data; sponsoring public opinion polls and petition drives; gathering business support, and grass-roots lobbying. The MEND campaign is working on S.B. 5484, a parity bill pending in the Senate.
Oklahoma
In April Governor Keating vetoed a parity bill (S.B. 1059) passed by the state legislature for the second consecutive year. The bill required individual and group health plans to provide benefits for the treatment of adults, adolescents, and children with "severe mental illness" equal to benefits for the treatment of other physical illnesses. The bill permitted insurers to provide benefits through a managed care system. While the Senate overrode the Governor's veto, the House failed to override the Governor's veto.
Puerto Rico
S.B. 1140 is a broad-based bill that would apply to every group health plan, public and private. It would cover patients who suffer any of the conditions described in the DSM and the International Classification of Diseases.