Is Your Mental-Health Coverage About to Improve?

EQUAL PROTECTION

LEGISLATION COMPELLING insurance companies to provide the same coverage for mental illness as they do for physical illness is being considered by Congress. The bill, known as the Mental Health Equitable Treatment Act, also covers disorders in the Diagnostic and Statistical Manual of Mental Disorders, with the notable exception of substance abuse.

Today, only disorders with a demonstrable biological origin are covered, leaving depression and eating disorders--both of which can be fatal if untreated--in the cold. "This is civil rights legislation," says the bill's cosponsor, Senator Paul Wellstone of Minnesota. Wellstone and Senator Pete Domenici of New Mexico introduced similar legislation to equalize insurance coverage for mental and physical disorders in 1996. Although that legislation ensured the same annual and lifetime dollar limits, insurers quickly found loopholes.

Wellstone is optimistic that Congress will pass the Mental Health Equitable Treatment Act, despite opposition from managed-care companies and small-business advocates. Those groups say the bill will drive up costs, thus harming small employers struggling to provide adequate benefits to workers. Most research shows that health-care premiums will rise approximately 1 percent.

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"When you put that against the costs that occur when mental disorders are not treated, it's nothing," says Jeanine Cogan, executive director of the Eating Disorders Coalition for Research, Policy & Action, which is lobbying Congress in support of the bill. Indeed, Americans lose more than $150 billion each year in costs related to treatment, disability payments and lost productivity, according to the National Institute of Mental Health.

Besides, advocates say, clinically effective care is also cost-effective. One study showed that when inpatients stayed for longer periods--an average of 50 days--only 10 percent returned for treatment. When third-party payers began limiting the number of days they would reimburse, patients stayed an average of 15 days, but almost one-third of patients were later readmitted.

The bill, however, is not a mandate. Only plans that currently offer some mental health coverage will be affected, and businesses with fewer than 50 employees are exempt.

Still, the insurance industry is worried. "If we're not careful we could kill the goose," says Jerry Vaccaro, president and CEO of PacifiCare Behavioral Health. He suggests that managed-care companies might jettison their mental-health coverage altogether if the new law becomes too burdensome or costly to implement. Wellstone disagrees, saying that employee demand for mental-health coverage is strong enough that no insurer would dare do this.

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