Mental Health Benefits: An Insurer’s Perspective

By Patricia Obletz
From Washington Park Beat June-July 2007

“Everyone, will at some time in their life, be affected by depression — their own or someone else’s.”
— Australian Government, www.upliftprogram.com

Mental health is a family affair for all of us, wherever we live, whatever we do, and wherever we come from. But insurance coverage for mental health services continues to lag behind benefits for physical health services. That’s why it’s so crucial for you to keep urging your elected officials to support Parity Mental Health Insurance 2007, House Bill 1367 and Senate Bill 558.

John Tomlinson, Vice President, Employee Benefits, of Mid State Insurance and Investment Services, an Independent Insurance Agency, agreed to talk about the insurance industry perspective on mental health benefits. He specializes in health insurance plans.

John said, “The original Parity Mental Health Act was signed into law in 1996, but it still has certain exemptions. First, companies must have at least 50 employees before physical and mental health services are equally covered. Second, if the cost of mental health services results in an increase in the cost of the plan of at least one percent, companies are free to deny these services after complying with the state mandated coverage of $7,000 annually for hospitalization, and $2,000 outpatient visits, and $3,000 for transitional treatment. Third, companies bypass unlimited dollar amounts for mental health treatment by imposing limits on the number of days, allowing 20 outpatient visits a year and 30 inpatient days a year, for example. Also, the Mental Health Parity Act does not apply to benefits for substance abuse or chemical dependency. However, insurance companies don’t care about parity, employers do, because they fear cost increases. This fact perpetuates stigma, which prevents people from getting services they need, unless they pay out of pocket.

“My brother’s first inpatient stay at an addictions’ rehabilitation center wasn’t enough to help him overcome his problem; my uncle and I paid the bill of $60,000 for his second stay. We were lucky we could. Seventy percent of ‘graduates’ relapse within the first two years according to some rehabilitation specialists.
“Of course, based on family history and everything I’ve read, 30 days just isn’t enough to overcome addiction. In the past, addicts used to receive disability benefits, but no longer — unless they also have a mental illness. Today, the insurance industry puts addiction treatment in the same barrel with gastric bypass surgery. The thinking is that people should be able to handle these problems themselves, to a certain extent.

Family doctors don’t always study mental health symptoms and medications
“Today, psychiatric medications are being prescribed by family doctors and psychiatrists in an almost 50–50 split, according to the therapists and medical doctors I had talked to, whether or not the family doctor has studied this area of medicine. Insurers have limits to the number of mental health treatment office visits that are allowed per the State of Wisconsin Mandates. It’s a gray area that health insurers want to stay away from for several reasons. Without tangible diagnostic evidence of mental health issues to begin with, need for services is difficult to measure. Some people see a therapist because they like having someone to talk to; others expect insurance to cover chiropractic visits because they ‘feel good,’ but are not medically necessary. But people, especially when in crisis, sometimes need to talk to a professional and insurance covers just so many visits. That’s why most larger insurance companies offer 24-hour nurse hotlines for their customers through Employee Assistant Programs. They do it because the cost of the nurse is far less than unnecessary emergency room visits. They know that prevention is cheaper. People also pay out of pocket who are affected by the stigma attached to mental problems. Today, the rich and the very poor are the ones who get the health services they need.

“It’s a double-edged battle in mental health because the drug companies are pushing their brands in the media: images of rain and then sunshine, or young people huddled in a corner while a party goes on around them switches to them in the center of smiling attention. These ads tell society that all they need do is pop a pill to fix any problem. The ads also make recovery appear immediate. They also influence the way some people think about prescription medicines. I was in a doctor’s office the other day with two clients who were complaining about increasing premiums. Their applications for their kids included $500 a month worth of psychiatric medicine between the two families. The doctor’s office manager, not even a psychologist, said, ‘I’m not afraid of kids who are on these medications, I’m afraid of the ones who are not on them.’ Is she basing that comment on prescriptions advertising?

“I think that the pharmaceutical industry is its own worst enemy because not every mental illness should be fixed by pills. To insurance companies, the mental health benefits issue isn’t how many pills people take, or how often they see a psychiatrist, since they’re medical doctors. The issue is in the hands-on/talk therapy with psychologists and social workers. They’re the ones who have to fill out all the paperwork to justify extending mental health services. My personal opinion is that hands-on therapy should be step one, not pills.

More people are addicted to prescription drugs than illegal drugs.
“The insurance industry also is concerned about the number of psychiatric drugs that have become street drugs. I recently read a statistic that more people are addicted to prescription drugs than illegal drugs. And I know people can get Vicodin painkillers off the Internet, as my brother did, so I imagine they could get other medicines.

“A growing number of talk therapists are accepting cash payments from clients in order to avoid paperwork, or because they aren’t in certain isnsurance provider networks. Bottom line: the very rich people are fine; the very poor people are fine; it’s the people in the middle who are not fine when it comes to mental health insurance coverage.”

Educate yourself. Mental illnesses run in every family. For more information, call 1–800–273-TALK; visit www.nimh.nin.gov; for information on the Mental Health Parity Act 2007, go to the U.S. Department of Labor website at www.dol.gov.

Last edited by Tyler Schuster.   Page last modified on April 06, 2009

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