In some states, co-payments and deductibles must be equal until a threshold level of care is reached, after which the patient costs for mental health care can be higher. Nevada, for example, requires that severe mental illness be covered, but co-insurance or co-payments can be as much as 150% of the out-of-pocket expenses for medical or surgical benefits. In North Dakota, there are no co-payments or co-insurance for the first five hours of mental health care, but they can be as high as 20% for the remaining hours.
In addition to its parity law covering state employees, Texas has a mandated benefit law for HMOs and groups of 50 or more employees. The 2001 statute passed in Massachusetts provides full parity for biologically based mental illnesses, but it stops at mandated benefits for substance abuse. Michigan passed a mandated benefit law in 2001 that includes an exemption for employers whose costs would increase by 3% or more.
Mandated-offering laws do not require any level of benefits. In some states, the mandated-offering law requires that mental health coverage be offered to an insured, with the plan allowed to impose whatever pricing, co-payment or co-insurance levels it wishes. Some mandated-offering laws stipulate that if benefits are offered, they must be equal to the benefits for other illnesses.
"Mandate-to-offer plans have been around since the '70s and early '80s," Linda Raines, executive director of the Mental Health Association of Maryland, told PT. "When advocates tried to get mandated benefits, the industry would lobby for mandate-to-offer."
Raines does not believe that all of the new parity legislation at the state level will have a positive effect on coverage. "In South Carolina, it's not really a state parity law," she said, "because it covers a very limited pool of people -- state employees. Some states have started with that and then shifted to private employees. In my book, I don't log that as a parity law."
"Alabama's new law won't have much effect," Raines continued, "because it's a mandated-offering law and small businesses are excluded. Put those two things together and that bill will have a minimal effect."
In addition to the 2001 statute in South Carolina, a mandated-offering measure that covers both mental illness and substance abuse was passed as a state law in 1994. The new law in Utah is a mandated offering measure that covers mental illness as defined in the DSM-IV. Some states initially passed mandated-offering laws and later imposed either mandated benefits or full parity. California, for example, in 1974 enacted a mandated-offering law that covered mental or nervous disorders for group health plans. In 2000, the state extended the law to require parity for severe mental illness for group, individual and HMO plans.
At least one state, Virginia, is going the other way. It requires full parity for biologically based mental illness, including alcohol(Drug information on alcohol) and drug addiction, through June 30, 2004. On July 1, 2004, the law changes to the mandated-benefit category, with co-payments and co-insurance of up to 50% for outpatient care.