Help that hurts

By Robert Landauer – editorial columnist for The Oregonian, July 4, 1998. Not available elsewhere online.

Oregonians with mental illnesses aren’t confused. They see clearly that the Mental Health Parity Act of 1996 has led irrationally to lower benefits.

The federal laws regulations went into effect Jan. 1. They require group health plans that cover mental illnesses to provide benefits at least equal to the dollar limits for other physical illnesses.

The acts lead architect, Rep. Peter DeFazio, D-Ore., was intent on protecting consumers from blatant insurance discrimination. He relied on two streams of research:

Scientists have proved that mental illnesses such as schizophrenia, major depression and bipolar disorder are biologically based and can be treated medically.

Major studies have verified that insurance parity for mental illness is cost-effective. Rand Corp., for example, found that equalizing annual limits (typically $25,000) would increase costs by about $1 per employee per year under managed care.

Other benefits could be huge: more people employed; less homelessness; fewer bankruptcies, jailings, hospitalizations, referrals to the Oregon Health Plan and foster care.

A fly has landed in this ointment. For 15 years, insurers in Oregon have expressed mental -health benefits in dollars — typically how much could be spent on a patient over each two-year period. This allows flexibility in adjusting to needs. They vary from time-consuming tests and evaluations to few-minute visits for adjusting prescriptions, or from full-court-press hospitalizations to occasional outpatient treatment, and from individual treatment to group therapy.

Now all group insurers have switched to calculating the benefits by counting the number of visits. Its the result of how an Oregon Insurance Division rule resolved a conflict between the state and federal law.

Tamara Hancock, president of Oregon’s affiliate of the National Alliance for the Mentally Ill, explains: Insurers would have to increase benefits to the same level as for other physical conditions if they stayed with dollar limits. By switching to limits on days and visits, they can squeeze through a great big loophole in the federal law.

“This is how it affects me, Lee Ann Bourcier wrote to the Insurance Division. Under my previous ODS benefits of $2,000 every 24 months, I could see my doctor 50 times every two years before my mental health benefits ran out. Under the benefits as of April 1, I can see my doctor only 26 times every two years –a reduction in ODS benefits of nearly one-half! Looked at another way, I used to get $2,000 compared to the $1,038 I receive now.

(In a later recalculation, Bourciers benefits fell to $415, down 80 percent.)

Some insurers have put ceilings on visits to alcohol and drug programs even though the temporary rules dont apply directly to them, warned Carol Van Houten, administrator of Building Recovery, a Eugene program. Best practice for treatment . . . calls for group therapy and frequent visits. Under the old system, a $1,500 reimbursement for a typical course of treatment would include assessment ($100), five individual/family sessions paid by insurance ($70 each) and 38 group therapy sessions ($28 each) for a total of $1,514.

The new 20-visit cap, she said, probably would include assessment, three individual/family sessions and 16 group sessions — $758, or about half the old benefit.

There was lots more testimony like this at a May 22 meeting at the Insurance Division in Salem. None showed that durational limits equal or exceed dollar benefits.

Only insurance lawyers could argue with a straight face that the companies don’t peg numbers of visits to costs. By switching, they sidestep the federal laws intent. Oregon’s Insurance Division must make insurers prove that durational limits provide as much mental -health coverage as dollar limits. Otherwise the state will stand as a co-conspirator in a very squalid evasion.

A new hearing occurs Wednesday to set permanent rules. Maybe this time, the rules will benefit the patients instead of victimizing them.