Is Achieving Mental Health Parity a Pipe Dream?

The Mental Health Parity and Addiction Equity Act passed by Congress in 2008 was hailed as “a milestone in the quest for civil rights, an effort to end insurance discrimination and to reduce the stigma of mental illness.”

This law, which finally took effect in July 2010, prohibits large group insurance plans from placing coverage or treatment limits on mental health and substance abuse services that are more restrictive than those imposed on medical and surgical services. The Parity Act also prevents these plans from requiring patients to pay a larger share of mental health charges in terms of deductibles and co-payments. When the legislation first passed, federal officials predicted that some 113 million Americans would have better access to behavioral health services—82 million of those through their employer health plans.

Under the Patient Protection and Affordable Health Care Act, mental health parity is now set to be extended to millions more Americans. Most significantly, all insurance plans sold on the state exchanges in 2014—available to individuals and smaller companies with fewer than 50 employees who were exempt from the 2008 Parity Act—will have to offer coverage for mental health services that is on par with medical and surgical services. Some of the 32 million currently uninsured people who will newly qualify for Medicaid benefits will also have mental health parity—but only if they are enrolled in managed care plans.

This is all encouraging news—in theory. In 2008 The American Journal of Psychiatry estimated that the economic burden of serious mental illness totaled some $316 billion each year, including $193.2 billion each year in lost earnings. These calculations did not include the added costs of incarceration or homelessness in this population, but did take into effect that the mentally ill earn at least 40% less than people in good mental health. Providing access to treatment for so many of these currently underserved individuals could only save money in the long-term.

But in practical terms, achieving mental health parity—even with the onset of the ACA—is going to face steep challenges in the years ahead. The problem (as usual) comes down to money—specifically draconian cuts to state budgets—and a shortage of qualified providers to treat all those expected to seek care. The current mental health system in this country is “horribly broken and horribly underfunded,” says Michael J. Fitzpatrick, Executive Director of the National Alliance on Mental Illness. “And across the nation, budget cuts continue to eviscerate community mental health programs that reach out to vulnerable individuals and put them on a path to recovery.”

Since 2009, states have cut more than $2 billion from mental health programs and shut down more than 4,000 inpatient beds, according to Fitzpatrick; the National Conference of State Legislatures reports that some one-fifth of states have passed or proposed cuts in mental health budgets for the next fiscal year.

Children and adolescents remain woefully under-treated or inappropriately treated for serious mental health and addiction problems even as we’ve witnessed a huge increase in the number of kids with attention disorders and other behavior issues who are prescribed strong psychiatric drugs.

A study in the January 2011 issue of the Journal of the American Academy of Child and Adolescent Psychiatry finds that “only half of adolescents that are affected with severely impairing mental disorders ever receive treatment for their disorders.” These include adolescents with severe anxiety, eating, or substance use disorders for whom fewer than 20% received treatment. The investigators also found deep-rooted disparities; with Hispanic and black adolescents far less likely than their white counterparts to receive services for severe mood and anxiety disorders. In the article, the Journal authors write, "marked racial disparities in lifetime rates of mental health treatment highlight the urgent need to identify and combat barriers to the recognition and treatment of these conditions."

Another new study—also published in January in the Journal of the American Medical Association—found that “More than 45 million of US adults—about 1 in 5—had a mental illness in 2009, yet fewer than half received any treatment.”

Mental health advocates see the recent cuts in state mental health budgets as dangerous and shortsighted. As programs serving the mostly poor and frequently homeless mentally ill shut down, there is a direct connection to a rise in these same people showing up in emergency rooms and prisons—far more expensive options. For example, faced with a huge budget deficit last year, Arizona cut services for about 14,000 of its mentally ill residents. The Los Angeles Times reports that at University Medical Center in Tucson, “requests for psychiatric consultations in the ER have jumped 20%,” according to Dr. Steven Herron, a forensic psychiatrist there. A powerful documentary from Frontline (accessible here ) explores the dichotomy that “fewer than 55,000 Americans currently receive treatment in psychiatric hospitals. Meanwhile, almost 10 times that number — nearly 500,000 — mentally ill men and women are serving time in U.S. jails and prisons.”

The recent surge in unemployment has increased the number of uninsured, poor individuals who can no longer afford mental health care or needed psychiatric drugs. Open Minds, a behavioral and mental health care consultant that works with a “wide range” of provider organizations says that their clients are currently seeing a “'flood' of Americans who are uninsured and…underinsured looking for free services. Provider organization budgets for free services are very small—certainly not enough to cover the U.S. population currently uninsured and underinsured for the treatment of mental illnesses and addictions.”

Mental health parity is a stated goal of health reform. But balancing cost control with a greater demand for services has been a sticking point for how to achieve parity over the years. For starters, how will the government decide which mental health ills warrant coverage? Will they stress medication over talk-therapy; day programs over residential care; promote computer-assisted cognitive behavioral therapy conducted in a primary-care setting?

When crafting the legislation, lawmakers looked to the Federal Employees Benefit Program, which already has mental health parity in terms of coverage and, according to The New England Journal of Medicine hasn’t seen an explosion in claims. That’s because the federal health insurance program decided that equal benefits can only be obtained for “medically necessary” mental health charges. According to the NEJM, in 2002, almost all of the federal program’s spending for mental health services went toward serious, debilitating problems including anxiety, attention deficit–hyperactivity disorder, depression, bipolar disorder, and schizophrenia.

The ACA also uses “medical necessity” to decide what treatments must be covered, versus using the “Diagnostic and Statistical Manual of Mental Disorders” (DSM)—the manual published by the American Psychiatric Association that includes all recognized mental health disorders. Under the new law though, insurers will have to make documentation and guidelines public to providers and patients who are denied coverage for treatments deemed medically unnecessary. It’s an area that has yet to be defined.

With the expected surge in requests for mental health treatment, the government will also have to confront the serious shortage in providers. Currently, many people with mental health problems get no further than a primary care doctor at a community clinic or an attending at an emergency room. There just aren’t enough child psychiatrists, psychologists and psychiatric nurses to attend to all those seeking care. The ACA provides funding for more mental and behavioral health training programs and also is introducing (and funding at 90%) a pilot Medicaid program that would assign individuals with serious (and chronic) mental health illness to a “medical home.”

The National Council for Community Behavioral Healthcare has a very good resource site for those interested in learning more about the specifics of how health reform will impact mental health benefits.

But the take-away is that under the ACA more Americans will have access to mental health and behavioral services. This is undeniably a plus for those with employer-based insurance; after 2014, even those at small companies. The question remains whether states—struggling to slash budgets in the face of the unrelenting recession, and slashing community and Medicaid mental health services for the poor, will be able to ramp up their programs enough to even approach parity for low-income people, the largest group of Americans who are untreated or under-treated for mental health issues.

9 thoughts on “Is Achieving Mental Health Parity a Pipe Dream?

  1. Thanks Naomi-
    Complex topic but full mental health parity is probably a pipe-dream.
    Until we have “objective bio-medical tests” and “short procedural interventions” for mental illnesses we will be impeded in achieving parity.
    We are stuck with a bio-medical model in US medicine which derives power and profit from denying psycho-social causes/contribtutionsto most of our illnesses and even injuries.
    Conversely we medicalize what could be solved through social interventions.
    My thoughts.
    Dr. Rick Lippin

  2. Dr. Lippin is right–this is a very complex topic. I wanted to share a few thoughts from my experience both as a state mental health and addictions commissioner in Oregon between 2003 and 2008; plus additional work I’ve been doing as the CEO of a behavioral health managed care organization. I’ve been especially interested in how we can develop much more accountable care agreements (and eventually accountable care organizations) that really take responsibility for providing integrated mental health, chemical dependency, physical and oral health. In addition, I believe the area of least understanding is the way in which risks outside of these 4 traditional health areas are understood–and that they eventually should be woven into accountable care agreements. In other words, addictions treatment should reduce involvement in criminal justice–but only occasionally (such as in drug courts) is this explicitly written into contracts, etc. The same could be said for mental health services improving school success for children and adolescents.
    Even with health care, it’s often the case that the social, behavioral, genetics, and environmental factors have more influence thah medical treatment itself on health outcomes like morbidity and mortality (see Schroder’s excellent NEJM Sept 2007 Shattuck Lecture article for details).
    And as long as I’m citing articles that make these points, Atul Gawande’s article this past week in the New Yorker really drives home the point that health care services narrowly conceived (and I would say incentivized) are not going to take advantage of the potential savings from integrated care. The last factor I wanted to point out is that the positive effects of integrated care are often not only outside the bounds of most accountable care agreements, they are also often though not always delayed effects.
    To sum up, we need accountable care that gets us outside our usual thinking and indeed outside our usual comfort zones. We need to retrain most staff to have the knowledge, skills, and attitudes to deliver proven integrated services. And we need financial support from funders by assuring them we can use evidence-based interventions to achieve results over reasonable periods of time–and we need their help in lessening the stigma that is often behind reluctance to fund services.

  3. Opening up provider panels (Medicare and others) to Licensed Professional Counselors would help ease the provider “shortage”.
    Mostly there aren’t short procedural interventions. That’s a pipedream. People need adequate services, which might mean longer-term interventions/sessions/programs rather than promoting such high levels of medication usage.
    Alleviating poverty would help, but that goes against “New Democrat” values of accumulating wealth in the upper ranks.

  4. Hi Naomi:
    If we are going to discuss mental illness and the law, the first thing we must do is take it out of the adversarial court room where a win is a notch on someone’s gun and place the decisions in the hands of trained medical psychiatric professionals who have little to lose. Nor should the mentally ill be confined to the “Dunnings” of creation. We have progressed and yet we still turn people out in Reagan’s streets.
    At Jackson, one prisoner leaped to his death and the guards argued with the ambulance personnel about entry while the prisoner bled to death. At another prison, one prisoner suffered successive seizures and I was asked to write a letter to the NAACP on his behalf. They later treated him and I was spared. Complex Partial Seizure victims are imprisoned along with the likes of Deerslayer who was accused of grinding his victims up in a chipper and feeding the hogs, the prostitute killer who traveled from port to port, etc.
    We are so backwards in treating the mentally ill who are prosecuted and convicted, it is criminal in itself.

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  6. This is a complicated issue, and it is my belief that it will be impossible to have mental health parity.

  7. Nice coverage of this issue, Naomi.  I’d like to point out that just because an insurance plan “covers” mental health, doesn’t mean the consumer can afford to use the benefit.  I am aware of an increasing number of low wage workers with insurance that can’t afford their mental health copays, often $50/visit (after which the plan pays the clinician about $13), and who also are rejected from public clinics because they have insurance. As a private practitioner of psychotherapy I see this situation with some frequency, as do my colleagues .  I recently learned that those clinicians who may be inclined to accept a lower copay for a particularly needy client  are prevented from doing this by their managed care contracts under which this practice is considered fraud.  So these people get caught in the middle and have great difficulty accessing care.

  8. There is an interesting debate in the blogosphere exploring the reasons for the persistent high unemployment rates in the US and elsewhere. Conservatives lay the blame on the structural skills mismatch and argue that this cannot be resolved through any stimulus spending measures. Liberals claim that the massive slump in aggregate demand from the boom, means that there are massive idling resources which can be brought to work with an appropriately structured stimulus program.