Center for Addiction Medicine

Are Nevadans with mental illnesses getting the help they need?

LV Health Magazine

July 2002

By Dr. Michael S. Levy

The 1990s brought great improvements in understanding the brain and developing treatments for mental disorders. Concurrently, Parity Laws arose out of concerns about the availability and quality of care for individuals with mental health disorders. These laws were designed to stop mental health care insurance coverage from shrinking at a time when advances in the treatment of mental disorders were vast.

Parity, or equivalence, means that mental health and substance abuse would be treated similar to physical conditions in the realm of health care benefits. Deductibles, co-payments, and limits should be consistent with those for physical health conditions.

The federal government mandated equal coverage for mental health and medical condition by passing the Mental Health Parity Act of 1996. Although the law’s intent was to increase availability of mental health care coverage, problems exist with the national law.

The Mental Health Parity Act merely requires that dollar limits of mental health coverage to equal those of medical benefits on insurance plans that offer mental health benefits. The law fails to require conditions on co-payments, deductibles, limits on office visits or length of hospital stays, or coverage for substance abuse. It gives both employers and insurers the option to drop mental health care coverage completely, and exempts any insurance plan that would increase total medical costs by 1 percent or more.

Further, the national mandate does not apply to employers with 50 employees or less. Group health insurance plans can restrict some mental health benefits and still comply with the law. For instance, the plans can limit the number of covered visits for mental health benefits, or have higher insurance co-payments for mental health services as opposed to medical and surgical services.

The lack of compulsory parity coverage led many states to adopt separate parity laws. In the past five years, several states have imposed parity laws that are much stronger than the national law. With the states’ ever-growing population and rapidly increasing need for quality mental health and substance abuse services, Nevada passed its own parity law that took effect in 2000.

While Nevada’s parity law builds upon the Mental Health Parity Act of 1996, the state law still falls far short of residents’ needs. The state law only mandates equal coverage for those with sever mental illness. Nevada’s parity law also allows for higher insurance co-payments for mental health services and exempts employers with 25 or fewer employees from the coverage mandate. Most importantly, the law continues to overlook the dire need for substance abuse coverage in the state.

Opponents fear that complete parity would result in an increase in the use of mental health and substance abuse services or higher insurance rates. Studies have shown, however, that other states’ parity laws have had no effect on the utilization of mental health services. In other words, use of these services is not higher in states that lack parity laws.

Recently, parity legislation research has focused on cost and utilization patterns for mental health and substance abuse treatments, which are generally managed by specialized managed care companies for most privately insured people.

Previous estimates were based on information from the 1970s and 80s, which does not accurately reflect current mental health or substance abuse treatment approaches. None of the earlier studies included data from employers that have adopted parity.

A recent study by RAND Health, a non-profit institution that hopes to improve decision-making and policy through research and analysis, focused on employer-sponsored health insurance plans with parity-level benefits. The results of these studies showed that parity in employer-sponsored health plans is not extremely costly under managed care.

The Ohio State Employee Program, on of the first employee-sponsored parity-level health plans, has provided for a long-term example for researchers to follow. In 1991, a switch to managed care followed the addition of mental health care and substance abuse benefits. Initially, costs dropped for the expanded insurance program. After 10 years, the level of services for mental health and substance abuse treatment has remained constant, with no evidence of significant cost increase.

With the continued growth of Nevada’s population, many fear the lack of quality mental health care facilities in the state will become the state’s next health care crisis. Because Nevada lacks community-based services for people with mental health disorders, it is imperative that we consider legislation mandating complete party.

A real discrimination against mental health diseases still exists in society. Many insurance companies continue to distinguish between mental and physical illness. As a community, we must recognize that addiction and mental illnesses are not going to disappear if we ignore them. With mandated coverage and specialized medical care, these illnesses can be treated and managed with respect to the individual.