Health Care

March 3, 2013

Insurers are scrambling to deal with rule making mental health an ‘essential benefit’ under new law

Linda Gale was without insurance for seven years because of a pre-existing condition.

Linda Gale was without insurance for seven years because of a pre-existing condition.

She had sought mental health care, and her efforts to find a company that would offer insurance she could purchase were fruitless.

Now retired, the former office accountant and paraprofessional said she found herself among the uninsured after she changed employers about 10 years ago. When she tried to get a new insurance plan, she was denied coverage.

So she started avoiding going to the doctor.

“I was lucky enough that I didn’t have any major problems,” she said. “I just didn’t go. It’s as simple as that.”

Now Gale is on Medicare and has her medical expenses covered. She said she’s glad others who are in the situation she was in won’t be denied coverage because of provisions included in the Affordable Care Act.

“I feel we should have certain rights, and we should take care of one another,” Gale said. “That’s why I’ve been a big fan of the president’s plan. I think being a citizen of the U.S. gives you certain benefits, and one of those should be health care.”

The pre-existing condition provision of the health care law is set to go into effect Jan. 1, 2014.

While the cost and the medical effects of the Affordable Care Act have been discussed at great length, mental health services haven’t received as much attention.

Recently, the Department of Health and Human Services announced a final rule that mental health and substance use disorder benefits are to be included as “essential health benefits” under the new law.

So starting Jan. 1, all insurance plans in the individual and small-group markets will have to cover mental health and substance abuse benefits, according to Kit Wagar, an Affordable Care Act specialist for the U.S. Department of Health and Human Services who is based in Kansas City, Mo.

States were able to choose which benchmark plan they wanted, or they could default to a federal plan to implement essential health benefits. Kansas chose the state’s largest small-group plan – Blue Cross Blue Shield of Kansas Comprehensive Major Medical Blue Choice – and added the standards of pediatric oral and vision from the children’s Medicaid program to meet minimum standards.

According to the state’s essential health benefits benchmark plan on the Kansas Insurance Department’s website, mental and behavioral health inpatient and outpatient services will be covered, and there will no quantitative limit on those services.

Outpatient services will include group, psychoanalysis, testing and family counseling.

Linda Sheppard, Kansas Insurance Department accident and health division director and Affordable Care Act project manager, said the department does not have a cost estimate for including mental health benefits with no dollar limit. Mary Beth Chambers, spokeswoman for Blue Cross and Blue Shield of Kansas, said that even though there are no dollar limits, insurers can use “medical management and necessity criteria” to limit services covered. That might apply to the length of treatment in a rehabilitation center or the number of therapy sessions a patient receives.

Chambers said Blue Cross doesn’t see the mental health component specifically driving costs but that other areas of the Affordable Care Act could.

For example, the law puts a ratio of 3-to-1 on the cost for health insurance differentials between older people and younger ones who are buying the same plan. And adding an estimated 320,000 people to insurance rolls also could increase costs for the company and its customers.

“We don’t know if that’s a healthy group of people or a lot of folks that have chronic conditions that require a lot of medical services,” she said.

Blue Cross already had included mental health in all of its plans prior to the essential health benefit rule, she said.

But insurers that didn’t include all of the essential health benefits may see the need to increase premiums to cover those areas when they introduce their plans, Chambers said.

Marilyn Cook, executive director of Comcare, Sedgwick County’s community mental health center, says that the Affordable Care Act is helping to drive the direction of medicine and mental health care.

“Quality, access and cost – it’s always been a balance between those three things, and this is causing all of us to look differently at how we do things,” Cook said.

Also under the Affordable Care Act, nearly every person will be required to have some sort of coverage, be it private insurance or government entitlement. With the predicted flood of newly covered people, Cook said she hopes it will cause more people to get mental health help who need it.

“By saying this is an essential benefit, everyone is stressing that mental health is a part of overall health,” Cook said.

HHS estimates that 32.1 million Americans will gain access to coverage for mental health and/or substance use and an additional 30.4 million who already have some of those benefits will gain from the parity protections, according to the HHS website.

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