New law tackles mental health coverage
Insurance benefits for mental illness increase
Monday, February 23, 2009
Parents of children with mental disabilities will soon feel some relief from a newly passed law that requires businesses to offer mental health insurance coverage comparable to coverage for other general health issues.
The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which becomes effective in 2010, requires businesses with 50 or more employees to provide the same overall level of health insurance coverage for mental and physical health.
According to the act, such things as lifetime or annual caps on a particular benefit—such as doctor visits—now have to be more equal for both general medical and mental health coverage, says Matt Cohen of Monahan and Cohen, a Chicago-based law firm that specializes in health, human services, special education and disability law. The law also equalizes deductibles, length of coverage, copayments and coinsurance, among other things.
Virtually all recognized mental health disorders are covered, including ADHD, autism, anxiety disorders and alcoholism.
The act is a big step forward in improving the quality of life for people with mental disabilities.
"In the past, people with psychiatric disorders were very likely to need more intensive and ongoing care than insurance companies would typically pay for," Cohen says. "The difference in coverage for physical illness versus mental illness was so great that the limits on mental health coverage denied many people the limited level of mental health coverage they needed."
People with mental disabilities often had to pay out-of-pocket for treatment. When money ran out, people were less likely to continue the treatment and their health problems got worse, Cohen says.
"You can only imagine what it would be like to be in the hospital for any other disorder and have to pay the bill yourself," says Dr. Sheldon Miller, president of the Illinois Psychiatric Society.
The Mental Health Parity and Addiction Equity Act isn’t perfect, Miller says. Parents should examine their policies and benefits to make sure they comply with the new federal law.