Health Insurers' Response to Current Mental Health Parity Laws.

• Author: Ward, Charles

1. INTRODUCTION 843 II. BACKGROUND 844 A. A Brief History of Mental Health Parity in the United States 846 1. The Development of Federal Mental Health Parity 847 a. The Mental Health Parity and Addiction Equity Act 848 b. The Affordable Care Act 848 c. The 21st Century Cures Act 849 2. Mental Health Parity at the State Level 849 B. The Mental-Health Parity Debate 850 III. ANALYSIS 852 A. How Insurance Companies Sidestep Existing Law 852 B. Initial Challenges Health Insurance Companies Faced 853 C. Parity at the State Level 854 D. Parity Federalism 855 IV. RECOMMENDATION 856 A. Insurers Use of the Wrong Criteria 856 B. Administering Payments and Claims 857 C. Enforcement 858 D. COVID-19 and Public Policy Moving Forward 858 V. CONCLUSION 859 I. INTRODUCTION

   This Note examines how health insurance companies process claims for mental health services and stresses the importance of a functional mental healthcare model by looking to states with the most successful parity laws in order to help achieve this ambition. Since insurance regulation primarily occurs at the state level, that is where a majority of the discussion will take place. Further emphasis is placed on the parity laws in Iowa as well as states with similar mental health parity laws. The discussion then shifts to how these laws affect the conduct of health insurance companies within these states. Lastly, this Note argues that health insurers should take a more meaningful role in complying with and promoting mental health well-being. If they fail, the consequences will be higher administrative costs, decreased access to care, and unnecessary hardship for some of the most vulnerable groups in this country.

2. BACKGROUND

   Mental illness is a serious concern for millions of Americans. For children ages 3-17, 7.4 percent or approximately 4.5 million have a diagnosed behavioral problem, 7.1 percent or approximately 4.4 million have a diagnosed anxiety problem, 3.2 percent or approximately 1.9 million people are diagnosed with depression, (1) and over 9 percent or approximately 6.1 million people have some form of ADHD. (2) As for adults, nearly one in five live with some form of mental illness, (3) yet it is estimated that close to half will never receive treatment. (4) 2022 findings show that the number of adults with serious suicidal thoughts increased by an additional 664,000 people from the previous year's data. (5) The latest CDC data shows that more than 47,500 suicides took place in 2019 alone (6) , while more than 70,000 drug-involved overdoses occurred that same year. (7) Additionally, the mental health problem is the worst it has ever been among historically vulnerable populations. (8) And still, these numbers may not entirely reflect the problem. (9)

   It goes without saying that the year 2020 made a bad thing worse. Even before the COVID-19 pandemic, millions of Americans were already facing a debilitating mental health pandemic. (10) Nonetheless, COVID-19 went on to reorganize our lives in ways we never before thought possible, overrun hospital systems, and at times, shut down the global economy. At the time of writing, there have been more than 65 million confirmed COVID-19 cases and more than 850,000 deaths in this country alone. (11) Many experts who predicted the proliferation of ever-more virulent variants turned out to be prescient as Omicron swept the globe in late 2021. (12) Whatever the case might be, the undeniable result is that COVID-19 has had, and will continue to have, long-lasting negative effects that will be felt for years to come. (13)

   It is against this backdrop that we must realize the complex yet vitally important role health insurance companies play in formulating better mental health outcomes for everyone. It will not be easy; no single solution can alleviate the myriad of competing interests within a healthcare system such as the United States. (14) Regardless, it is not hyperbolic to say health insurers have the potential to change the world, or at least the world as millions of Americans experience it. (15)

   1. A Brief History of Mental Health Parity in the United States

      It is harder to get mental health treatment in this country than in traditional medical or surgical procedures. (16) The reasons for this are manifold; they include people's social convictions about mental health, (17) the belief that some health care providers are not apt to handle these types of illnesses, (18) certain public policy failures, and numerous systematic conventions that vehemently protect the avaricious behavior of certain financial institutions. (19) That said, nearly all these contentions are premised on two primary concerns: cost and the inconspicuousness with which mental illness often disguises itself. (20)

      The good news is that people's attitude towards mental health is changing; they are fed up with the lack of fairness and are ready to reorganize what society values. Some data spearheading this change include biological research suggesting a predisposition for mental illness in some people and how mental-health-related illnesses have many of the same adverse effects on a person's life as physical illnesses. (21)

      1. The Development of Federal Mental Health Parity

         Mental health parity aims to require health insurance companies to provide equal coverage for both illnesses of the mind and illnesses of the body. (22) The first time a widespread initiative resembling mental health parity appeared at the national level was when President John F. Kennedy pursued mental health parity for federal employees through the Federal Employees Health Benefits Program, (23) although these efforts were short-lived. By the 1980s, any progress made up to that point was soon after undetectable. (24) President Bill Clinton later considered mental health parity during his healthcare reform efforts in 1993, (25) but these efforts were equally unsuccessful. (26)

         It was only in 1996 that Senators Pete Domenici and John Danforth introduced the first round of momentous federal parity legislation known as The Mental Health Parity Act of 1996 (MHPA). (27) Although the MHPA was a compromised version of the more extensive 1992 Domenici-Wellstone bill, it nonetheless was the first of its kind and a sign of things to come. (28) According to the MHPA, insurers were prohibited from imposing disparate annual and lifetime limits for mental health benefits when compared to surgical and medical benefits as offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan. (29) While this meant that insurers could no longer stymie access to mental health services by providing unequal coverage under a plan, the MHPA contained certain important exceptions. For example, the MHPA did not require insurance companies to cover mental health services for all plans. Rather, it only applied to group health plans that offered mental health benefits at the outset, and it did not apply to employers with fewer than 50 employees. (30) Moreover, insurers were free to charge different copays and coinsurance rates. (31) Lastly, employers could request exempt status from any requirements if they could show a one percent increase in premiums. (32)

         1. The Mental Health Parity and Addiction Equity Act

            To combat the vast shortcomings of the MHPA, (33) Congress eventually passed the Mental Health Parity and Addiction Equity Act in 2008 (MHPAEA). (34) This newly enacted law prohibited differences in treatment options as well as certain cost-sharing schemes insurers previously engaged in under the MHPA. For example, according to the MHPA, insurers could set daily limits on outpatient mental health services, set their own coinsurance rates (including co-pays, deductibles, and out-of-pocket maximums), and limit treatment benefits irrespective of any parity considerations. (35) Nonetheless, despite these additional requirements, the MHPAEA did not require that health insurers provide coverage for any type of mental health services. (36)

         2. The Affordable Care Act

            Beyond providing health care for 20 million previously uninsured Americans, the Affordable Care Act (ACA) set the stage for what would become the largest development in access to mental health services this country has ever seen. (37) Most notably, the ACA defined "mental health and substance use treatment" as an essential health benefit (EHB) (38) and required individual and small-group plans to cover all EHBs. (39) As previously noted, the MHPAEA only applied to large employers (50 or more employees) and only if they chose to provide mental health coverage. The ACA also prohibited what is known as underwriting, the process whereby insurers screen patients and, among other things, use the information to deny coverage and increase the price of cost-sharing plans. It is important to note that before the ACA, people diagnosed with conditions such as depression, anxiety, and substance use disorders were regularly labeled as having preexisting conditions. (40)

         3. The 21st Century Cures Act

            While not nearly as expansive as the MHPAEA or ACA, the 21 (st) Century Cures Act, passed in 2016, demonstrates a continued interest--at least among some public officials--in increasing access to mental health services in the United States. (41) Division B of the Act includes the Helping Families in Mental Health Crisis Act, strengthening preexisting mental health parity measures. (42) The Act also sets up a $5 million grant to provide assertive community treatment for people with mental illnesses (43) and provides $1 billion to states over a two-year period to combat the opioid epidemic. (44)

      2. Mental Health Parity at the State Level

         Long before the MHPA was ever contemplated, states took it upon themselves to promote mental health parity by way of private insurance. (45) As early as 1970, certain states established minimum benefits for illnesses such as alcoholism, drug abuse, and specific mental...