Good mental health is an essential part of life. It is needed in order for a person to be productive and successful in every aspect of their life. Mental illnesses do not discriminate on race, religion, economic status, or gender. Several mental illnesses have interdependency on one another. For example, depression is usually accompanied by alcohol or drug abuse or schizophrenia is exhibited with a bipolar disorder. It is important to examine the definitions of “disorder” and “disease” as use in the context of this paper. A “disorder” is diagnosed when symptoms or signs of distress are present. Disorders are diagnosed using clinical criteria. A “disease”, on the other hand, is the exhibition of conditions that can be detected physically (Shalala, ch 2).
Many people resort to suicide as a result of a mental illness or substance abuse. The statistics on suicides related to mental illnesses and substance abuse are staggering. According to the National Institute of Mental Health, 30,535 Americans dies of suicide in 1998. Of the people who committed suicide 90 percent have a diagnosable mental disorder. Suicide is the 8th leading cause of death in the United States and the 3rd leading cause of death for ages 15 to 24. Research has shown that men are four times more likely to commit suicide, however, women are three times more likely to attempt suicide. Studies have found that suicide can be prevented by early detection and treatment for mental illnesses and/or substance abuse.
There are three main risk factors that are attributable to suicide. They are depression and related mental illnesses, substance abuse, and aggressive or disruptive behavior. According to the Surgeon General’s report on mental health four of the ten leading causes of disability are mental disorders. These are major depression, bipolar disorder, schizophrenia, and obsessive-compulsive disorder (OCD). Major depression is the leading cause of disability in the United States. Approximately 18.8 million people are affected by major depression each year. The average age of onset is the mid-twenties. Depressive disorders usually coexist with substance abuse and anxiety disorders. Mood disorders are most commonly associated with depression. Symptoms of mood disorders are irritability, social withdrawal and the idealization of suicide. Bipolar disorder affects 2.3 million people each year in the United States. The average age of the first manic episode is when the person is in their early twenties. Schizophrenia affects 2.2 million people each year. The earliest signs of schizophrenia are exhibited between the late teens and early thirties. Alterations in perception and thought processes are more commonly associated with schizophrenia. This can include disorganized thought and hallucinations. Obsessive-compulsive disorder affects 3.3 million adults each year. However, it is more prevalent among adolescents. The first signs of OCD begin during childhood or adolescents. OCD is most commonly associated with anxiety disorders.
The diagnosis of mental disorders is very difficult. There are very few tests that can be performed that give definitive results. For a symptom to be declared a mental illness must meet three criteria. These are “reports of the intensity and duration of symptoms, signs from their mental status examination, and clinician observation of their behavior including functional impairment.” (Shalala, ch 2). The Diagnostic and Statistical Manual of Mental Disorders, fourth edition (DSM-IV) is widely used in the United States to diagnose mental disorders. The manual organizes mental disorders into 16 different classes that are used for diagnosis. Within each diagnostic class there are specific criteria that are used to make an appropriate diagnosis. One unique aspect of The Diagnostic and Statistical Manual of Mental Disorders is that is does not state causations for these disorders.
Since 1960, there have been several attempts to coordinate mental health care. The Community Mental Health Center (CMHC) program was initiated in 1963. The programs purpose was to consolidate community-based mental health services. However, CMHCs were highly ineffective with regards to the severely mentally ill and their ability to work with state mental health hospitals. The Community Support Program (CSP) was then implemented. Its intent was to network mental health and human services agencies to aid in providing for the complex needs of people with severe mental illnesses. The fault of the CSP was that there were no incentives for cooperation and the development of new services. Today, case management is the answer to the coordination of mental health care. The purpose of using case managers is to integrate the efforts of independent specialty provider agencies.
In the late 1970’s and early 1980’s it became apparent to employers that the cost of mental health care was rising faster than the cost of other health areas. Most insurance companies and businesses started to reduce mental health benefits as an answer to these rising costs. Cuts to mental health benefits were made in various ways by employers and managed care organizations. Deductibles were raised, outpatient visits and hospital days covered were lowered, and the lifetime or annual ceiling limits for benefits were lowered. A typical benefits package under managed care for mental health in the 1990’s covered thirty inpatient days per year and twenty outpatient visits. A $50,000 lifetime ceiling was allotted for mental heal or substance abuse. Some mental health disorders were not even covered.
According to the Bureau of Labor Statistics, in 1981 58 percent of employees who had employer based health benefits had coverage for inpatient visits and 10 percent and outpatient coverage for mental illnesses. By 1993 only 16 percent had inpatient coverage and 4 percent had outpatient coverage. During this time many families were forced into debt due to hospital and therapy bills. Many families had to tap into college or retirement funds to cover these additional mental health costs.
The cost of mental health was not the only driving force behind cuts in mental health benefits. Insurers and businesses believed that mental health coverage was being abused. Companies were paying for employees to see a therapist for everyday problems such as dissatisfaction with their job or marriage. Many employers were not sure if these constitutes as “real” mental health problems and if they should be covered by company insurance. Another problem with mental health coverage was the stigma and misunderstand attached to mental disorders. Many people felt unsympathetic toward those with mental health or substance abuse problems. It was commonly thought that such problems were due to the lifestyles of the individual or their lack of self-control.
In 1996, the total health care costs for mental illnesses in the United States total $69.0 billion. However, monetary costs are not the only cost associated with mental illness. The indirect costs can be very substantial also. Indirect costs can include premature death, loss of productivity in the workplace and other aspects of a person’s life. The indirect cost of mental illness is estimated at $78.6 billion in 1990. The growth of spending for mental health has been roughly the same as other health care spending. However, employer and insurance companies have been forced to cut healthcare costs by using cost-containment strategies. Many mental health benefits were cut due to these strategies. This, in turn, created higher out-of-pocket expenses for families that were afflicted with mental health problems. These inequalities in the spending and coverage of mental illness and physical illness prompted legislature and advocacy groups to take action. The federal Mental Health Parity Act (MHPA) was enacted in 1996 and was implemented in January of 1998.
During the 1980’s and early 1990’s the notion that mental illnesses were biologically based began to surface. It was during this period that researcher found that most mental disorders had excellent success rates with the proper treatment allowing for the person to return to work and be a productive. In the early 1990’s many advocacy groups started vocalizing their opinions on the lack of mental health benefits offered by businesses and healthcare organizations. These advocacy groups brought stories of families forced to use below par state mental health facilities die to the lack of mental health benefits offered through their employers struck a chord in many Americans. Thus, the quest for mental health parity was born.
Mental health parity has come along way and fought a hard fight. Because mental health parity is such a “hot” topic it is hard to get a legislative consensus. Many compromises had to be made in order for the MHPA of 1996 to be passed. Two very important players in the legislative battle for mental health parity were senators Pete Domenici (Rep.) and Paul Wellstone (Dem.).
In July of 1996, Domenici and Wellstone brought forth a much-compromised amendment to Senate Bill 1171, The Health Insurance Reform Act. SB 1171 did not originally include mental health parity. The bill stated that workers would be able to continue with their insurance in the event that they lost or changed jobs and that health insurance companies would not be able to deny anyone coverage due to pre-existing conditions. The goals of Domenici and Wellstone’s amendment goal were to include parity on lifetime and annual benefits, mental health benefits would not be required, substance abuse parity would not be allowed and business that has 25 or fewer employees would be exempt. The amendment would have several effects. The cost to the federal government was projected to decrease from $16.7 billion to $1.8 billion. The amendment stated that there would be a .4 percent increase in premiums. However, employers should only expect to see a .16 percent increase in premiums. After months of debating mental health parity was removed from SB 1171. The bill with the compromise amendment was passed in the house. However, it was removed from the reform bill due to opposition from the Republicans in the House of Representatives.
On the first of August, Domenici and Wellstone introduced the Mental Health Parity Act of 1996, SB 2031. This bill was completely separate from the previous comprise that was made in July. After yet another compromise the parity amendment was attached to the Veterans Administration and Housing and Urban Development bill. A final addition to the amendment was that business could claim parity exemption if they could prove a 1 percent increase in health care costs. On September 26, 1996 the Mental Health Parity Act was signed into law. It took affect January 1, 1998 and will stop in 2002. The federal MHPA of 1996 is view as a benchmark towards true mental health parity.
The Mental Health Parity Act of 1996
The Mental Health Parity Act of 1996 mandates that “if companies employing more than 50 workers offer any mental health benefits at all, those benefits cannot have annual or lifetime dollar ceilings lower and more restrictive than those place on medical and surgical benefits.” (Otten 10). Also, this law will not preempt state laws that have more favorable mental health benefits. There are, however, few exceptions and restrictions accompanied by this law. If a company does not already offer mental health benefits then it does not have to provide them. The federal law does not apply to benefits related to substance abuse. If a company deems it appropriate, they can make up the cost of covering mental health benefits by removing physical and surgical annual or lifetime ceilings, thus reducing mental health benefits. Other cost-containment strategies include deductible and co-payment increases or the reduction of hospital stays and therapist visits that are covered.
There are also exemptions that apply to companies under MHPA. According to the law, any company that has 50 or fewer employees is exempt from the law. If a company can prove that it’s health care costs have increase by at least 1 percent then they can apply for an exemption. The company must use data provided from six months of operating experience under the new requirements to apply for and to show that there are monetary reason for exemption. If granted exemption, the company will continue to be exempt from the MHPA until September 30, 2001 regardless of any changes to the benefit’s structure. However, if a company fails to notify it’s health care plan participants it forfeits the right to an exemption.
State Mental Health Parity Legislation
The MHPA of 1996 gave mental health advocacy groups new hope and a greater drive for mental health parity at the state level. Prior to the law there were only five states that had parity laws: Maryland, Minnesota, Maine, Rhode Island, and New Hampshire. Five more states added parity laws in 1997. These state laws went above and beyond what the federal parity law required. These states were Arkansas, Colorado, Connecticut, Texas, and Vermont. State employees of Indiana, Texas and North Carolina are covered under full parity benefits. It is important to note that state parity laws do not cover self-insured companies. This is due to the exemption claimed under the federal Employee Retirement Income Security Act of 1974 (ERISA). ERISA forbids states from regulating self-insuring companies. It is estimated that 60 percent of employers are self-insured in the United States.Many state laws also provide exemptions for small businesses. However, it depends on the states definition of “small” on how many people actually benefit from state parity laws.
Several problems present themselves concerning state parity laws. This is because state parity laws differ in what is covered, the minimum benefit requirements, approved providers, the use of managed care, exemptions and populations covered and specificity of parity. Coverage seems to be the most troublesome aspect of state parity laws. Parity laws only require that mental health benefits be equal to physical and surgical benefits. If a company has poor physical or surgical benefits then they will have poor mental health benefits. Parity laws also have no control over the quality of care that is given. This proves troublesome in regards to bad managed healthcare organizations.
One other coverage problem is that of benefits only related to “biologically based” mental illnesses. Schizophrenia, major depression autism, OCD and bipolar disorders are considered biologically based.This proves to be problematic in regards to only covering severe mental illnesses. Many states followed in the federal laws footsteps and used a broad definition of mental illness. However, this too poses a problem according to some employers, insurance companies and HMO’s. These groups believe that a broad definition of mental illness will promote abuse of benefits. Specifically, the abuse from people who are “worriers”. The majority of these people have do not exhibit symptoms of mental disorder but seek out help for day-to-day problems. May employers are worried that people from this particular group may cause premiums and costs to rise.
Vermont’s mental health parity law is deemed the most comprehensive of all state mental health parity plans. Vermont’s plan mandates that mental health insurance be offered in Health insurance plans. It, also, prohibits cost shifting and requires that service charge be equal to the limits for physical illnesses. Vermont’s plan also covers substance abuse and the law applies to all businesses regardless of its size.
Behavioral managed care organizations began emerging in the early 1990’s. A majority of these companies were subsidiaries of major health insurers such as Blue Cross and Blue Shield and Aetna. These subsidiaries became known as “carve-outs” because HMO’s were using them to subcontract mental health benefits. It was thought that behavioral managed care organizations would help to provide more accurate diagnosis and lower cost through the use of medical professionals experienced in mental health and substance abuse. It is a general rule “if managed care is not in place before parity, it will be there soon after.” (Otten 9). However, the presence of managed care makes it difficult to determine the impact of parity. According to one benefits specialist, “You won’t really know the true effect of parity except where it is added after managed care has been in effect for a few years.” Research has proven inconclusive regarding the effects of parity and manage care on mental health costs.
Some advocacy groups have voiced concerns that managed care will begin under treating patients in order to reduce costs and maintain profits. One of the most use cost reductions by managed care is the reduction in hospitalization benefits. This is most often the most expensive benefit to cover. Due to the high cost of hospitalization, emphasis is concentrated on the use of medication.There has been a significant increase in the number and quality of medication offered in helping with mental disorders. This has made it more possible for people to quickly return to work and lead more normal lives.
In March of 1998, the Substance Abuse and Mental Health Services Administration issued a report on the cost of mental health parity. The report stated that most employers are not becoming self-insured and do not intend to shift additional costs to their employees. These were two of the biggest fears of managed care organizations and some consumers. In fact, lower costs and lower premiums were reports the first year of parity. The study also found that full parity for mental health and substance abuse would increase premiums 3.6 percent, not the 4.2 percent to 11.4 percent that had been estimated earlier. Some state examples of how mental health parity has affected costs are Maryland and Texas. According to studies, Maryland saw a .2 percent decrease after full parity was implemented and Texas saw a 47.9 percent decrease in cost for state employees enrolled in its managed care plan under parity.
It is estimated that between 7.7 million and 12.8 million young people has mental health problems. These problems, often called disorders, can include depression, ADHD, anxiety, conduct and eating disorders. It is also estimated the 6 million young people have serious emotional disturbances. This term is used to refer to children who have the afore mentioned disorders, in which the disorder interferes with the daily functioning socially, academically, and emotionally. Anxiety disorders are the most common of childhood disorders, affecting 8-10 of every 100 children and adolescents. Major depression is the second most likely disorder, striking up to 6 out of 100 children. The other statistics are staggering. According to the Action Alliance for Children, 70 to 80 percent of children under the age of 18 do not receive mental health services, 100,000 children receive residential treatment or hospital based treatment each year, 2 million children receive outpatient mental treatment. It has also be documented that at least 30 percent of all elementary school children experience moderate to severe school adjustment problems. According to the World Health Organization, it is estimated that by the year 2020, childhood mental disorders will rise by over 50 percent internationally. This means that childhood mental disorders will become on of the five most common causes of morbidity, mortality, and disability among children. There are several problems associated with the diagnosis of a mental disorder in a child. One problem is that pediatricians are the PCPs for young children. However, they do not have the training or time for mental disorder diagnosis. Also, it is difficult to distinguish between mental health problems and normal aspects of a child’s development. And, of course, the stigma attached to mental disorders keep parents from getting their child the proper treatment.
There are positive and negative sides to enrolling a mentally ill child into a managed care plan. Some advantages to managed care are the improvement of the coordination of health care services, the offering of medical home care for children who would otherwise only receive episodic care, and the encouragement of preventive health services. On the downside, under capitation, health plans have an incentive to enroll only health, low risk children, and providers have an incentive to provide less care than is needed. Under managed care there may also be some limitation to the enrollees’ choice of providers. Specialized behavioral health carve-outs are another are of concern. Approximately 80 percent of children with mental disorders are covered under these carve-outs. This is an area of concern due to the utilization of services, quality of services and coordination of services.
The cost to treat a child with a mental disorder is not expensive. Children only account for 7 percent of mental health expenditures. In 1996, an average of $984 was spent on the treatment of children with mental health problem. This averages out to $45 per child. The majority of this money is spent on inpatient services, followed by physician services, drugs, and emergency room visits.
It is clear that mental health is as important as physical health. Poor mental health can have adverse affects on productivity and absenteeism in the workforce as well as prevent a person from leading a normal life. The Mental Health Parity Act of 1996 was a tremendous help in combating the inconsistencies of mental health benefits. However, many changes must still be made in order for there to be full parity. Further changes must happen at the federal level as well as the state level.
In order for these changes to occur several things must be accomplished. The public and health care providers must be educated on mental illness. The stigma attached to mental illnesses must be overcome for the acceptance of mental illnesses as equal to that of physical illnesses. The proper classification and diagnosis of mental disorders must be developed and implement in order to effectively and successfully treat mental illnesses. And, finally, lawmakers must be willing to compromise on mental health issues without sacrificing the true intent of the laws…to serve and protect the rights of all people.
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Effects of the mental health parity act of 1996 online. http://www.mentalhealth.org/cmhs/managedcare/parity/parityacteffcts.htm. Accessed: 2001, March 24.
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