Annual Limits On Mental Health Benefits example essay topic

Introduction: The Mental Health Parity Act (MPHA) refers to the law that requires the health insurance provider to cover mental health and substance abuse services as much as other physical health services. President Clinton signed Mental Health Parity Act of 1996 into law on September 26 1997. MHPA was headed by Senator Domenici whose daughter suffers from schizophrenia and senator Wellstone whose brother has severe mental illness. This act forces allows employer group health plans and health issuers, and others offering mental health benefits to set annual limits on mental health benefits that are no lower then the limits for medical and surgical benefits. Companies with more than 50 employees have to include mental health coverage in the health insurance benefits. A group health plan or policy that doesn't impose an annual or lifetime dollar limit on medical and surgical benefits may not impose such a limit on mental health benefits.

This parity is the first to promote equality of health insurance coverage for treatment of both mental illness and other medical illness. Before the passing of the MPHA, the typical mental illness coverage was $50,000 for lifetime and $5,000 for annual and typical medical coverage of $1,000,000 lifetime and no annual cap. Now I will discuss some points showing weakness of "Allocation", "Delivery", "Finance" and "Provision" of the Mental Health Parity act of 1996. Allocation: A major question is "who needs mental health parity?" , "what are the criteria used to determine eligibility" and "how do you know who needs help?" Currently under the key provisions businesses with 50 or less employees and those who do not offer mental health benefits are exempt from this law.

This scope of parity legislation differs state to state. This inflicts enormous emotional and financial burden on individuals and their families. According to "National Center for Policy Analysis" ninety-one percent of the small firms and ninety-nine percent of large firms offer mental health. So that leaves nine percent of small firms and one percent of large firms that are not offered mental parity. This leaves many small employers to be exempt from the parity. According to "U.S. Department of Labor" it is stated that almost 40 percent of the employees with health insurance have health insurance coverage through self-insured plans and are not protected by state law.

Since there are no objective tests for "mental illness", all kinds of socially unacceptable behaviors are considered mental illness. According to TIME magazine, there are at least 236 phobias, comprising about half of the more than 500 phobias psychiatrists give credence to and get paid to "treat". It is said that the number of Americans who are said to be "mentally ill" reached 560,950,000 (which is more than double the population of United States of America"). According to Amy Fletcher's research, $43.7 billion are spent annually treating Depression.

Facts like these give the mental health industries an opportunity to pass off fraud and abuse as "treatment to mental illness". In 1994, the U.S. Department of Justice collected $480 million dollars in fines and penalties for mental health care fraud. In September, 1998, Medicare barred 80 communities mental health centers in nine states from serving the elderly and disabled after investigators found patients were charged $600 to $700 a day for watching television and playing bingo instead of getting the proper treatment to cure their illness. The best solutions for such problems are to have mental health under their current health insurance.

According to the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders, "There is no satisfactory definition that specifies precise boundaries for the concept 'mental disorder. ' " Delivery: The delivery of the services has been driven by some extremely obvious vested interests - psychiatric clinics, hospitals and psychiatric organizations. Though the deliveries of the services are vast, 79 percent of the $480 million in fines from frauds were collected from psychiatric industries. Fallout's like such should put fear in the patients and the insurers from the fear that the patients aren't getting legit treatments and that insurance company won't have to spend vast amount of money in investigations of fraud.

Finance: The finance aspect of MHPA is the biggest problem created by this act. In 1998, Mathematica estimated a 3.6 percent increase across all plans, with a range of six percent increase for HMOs and up to a 5 percent increase for fee-for-service plans. Pricewaterhousecoopers indicates a cost increase of around one to three percent depending on the type of health care delivery system. The cost of treating mental disorders rose by 84 percent of overall benefit cost in the first year of the parity.

Once the parity was passed the insurers and employers complained that the parity raise premiums and forced firms to limit other benefit to give mental illness the same stature as the physical illness or having to cutback mental health overage due to the extreme cost of the plan. The congressional budget office reported that Health Insurance Premium (HIP) increased an average of 4 percent to 11.4 percent as result of the bill. They also claim that MHPA would run small business out of business due to the HIP. The MHPA will help increase the 16.3 percent of the U. S uninsured population to 28.3 percent. In figure one, from Henry Yennie's article titled, "Parity Costs - But How Much" you can see once the parity is activated Watson-Wyatt's premium is hike to a staggering 11.4%, with Price Waterhouse at 8.7%. According to a survey done by Mercer of 4,000 employers, 34 percent of the employers switched from annual and lifetime cap restrictions prohibited under the federal legislation to day or visit limits to hold down cost.

Provision: The provisions that came with the MHPA includes three services: inpatient, outpatient, and transitional treatment service. All three services covers treatment of nervous and mental disorder or alcoholism and other drug abuse problem. In the web website, it is stated that there are about 14 million alcoholics living in the United States. Just imagine if they ever heard or understood this parity. Our entire HIP would go sky high and push the uninsured statistics over the 30% that is close to a third of the population. In the substance abuse and mental health services administration website it states that 14 million people are victims of drug abuse problems.

That is about 80,287,642 people of the total U.S. population, which is 286,741,578. That is a lot. In case of outpatient there are three conditions that must be followed. The first is the approval of the Department of Heath and Family Services to run a program in an out patient treatment facility. This means very few facilities are out there to treat patients and patients having to travel long distance to find suitable facilities.

Secondly, a licensed physician who has completed a residency in psychiatry in an outpatient treatment facility or in the physician's office. Thirdly, a licensed psychologist who is listed in the National Register of Health Service Providers in psychology. These restrictions keeps facilities to be furnished because of the lack of professions willing to move to different locations just so the government could provide mental help to patients in rural or out in the country side where there might be less than 10,000 population. The last service is transitional treatment service where patients are provided to an insured in less restrictive manner but in a more intensive manner. Other minimum coverage's provided for inpatients are the first 30-day as an inpatient in a hospital, or at least $700 transitional treatment. The problems with these are that people do not need them are paying for it through their premiums and the people who need them don't want to admit that they need help.

So money and services are going to waste. They should have a service where if you fit under the MHPA the state or fed should assign you to a facility for treatment and if you don't you are penalized or denied of future mental health services. In conclusion this new mandate will only help the deteriorating number of people lucky enough to have health insurance, booting the national uninsured population 30%, which is a staggering number. In the end there will be billions of dollars poured into an already corrupt and obsolete mental healthcare system. The only way the insurance can blanket the mental-health parity is by either raising the rate or reduce medical coverage. As they say, you must sacrifice something to get something.

Bibliography

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Summary of findings from the 2001 National household survey on drug Abuse", Department of Health and Human Services, web September 2001.
The Mental Health Parity Act" Health Care Financing Administration, web 2001.
Hennessy, Kevin D, and Goldman, Howard H. "Full Parity: Steps Toward Treatment Equity for Mental and Addictive disorders. Health Affairs. Volume 20, Number 4. July / August 2001, 58-67.
Otten, Allen L. "Mental Health Parity. What can it accomplish in a Market Dominated by Managed Care?" Milbank Memorial Fund web June 1998.
Rover, Julie. "Opposition builds to Mental Health Parity in Labor-HHS" Congress Daily November 29, 2001, p 10, 2 p.
Mechanic, David. "Closing Gaps in Mental Health Care for Persons with Serious Mental Illness" HSR: Health Services Research 36: 6, December 2001 Part I, p 1009-1017.
Frank, RG & Shore, MF. "Performing Measures for Managed Behavioral Healthcare Programs: PERMS 1.0" American Behavioral Healthcare Association. 1996.
Congressional Budget Office. "CBO's Estimate of the Impact on Employers of Mental Health Parity Amendment in H.R. 3103", Washington, D.C. : Congressional Budget Office, April 23 1996.
Sing, M, Hill, S., Smokin, S, & Heise r, N. "The Costs and Effects of Parity for Mental Health and Substance Abuse Insurance Benefits". U.S. Department of Health and Human Service Publication, Publication No. SMA 98-3205, 1998.