Extending Mental Health Coverage: What the House and Senate Have in Mind

January 13, 2010

There are very few, if any, direct mental health provisions in the congressional health care legislation that has passed the House and is now awaiting Senate approval. The Senate bill-the Patient Protection and Affordable Care Act (HR 3590)-debated on the floor in December is similar in some respects to the Affordable Health Care for America Act (HR 3962), which the House passed by an extremely thin, Democrat-heavy vote of 220-215 on November 7, 2009. Both bills appear to extend mental health parity to individual and group policies sold within new health insurance Exchanges. They would also expand Medicaid, begin funding medical home demonstrations, and ban insurance companies from denying policies based on an applicant’s preexisting condition.

There are very few, if any, direct mental health provisions in the congressional health care legislation that has passed the House and is now awaiting Senate approval. The Senate bill-the Patient Protection and Affordable Care Act(HR 3590)-debated on the floor in December is similar in some respects to the Affordable Health Care for America Act (HR 3962), which the House passed by an extremely thin, Democrat-heavy vote of 220-215 on November 7, 2009. Both bills appear to extend mental health parity to individual and group policies sold within new health insurance Exchanges. They would also expand Medicaid, begin funding medical home demonstrations, and ban insurance companies from denying policies based on an applicant’s preexisting condition.

Referring to the last provision, Alan F. Schatzberg, MD, president of the American Psychiatric Association (APA), said, “This alone will be of direct benefit to our patients, even more so when coupled with the elimination of lifetime limits, barring insurers from varying premiums due to health status, and adding coverage of young adults up to age 27 on their parents’ insurance.”

Andrew Sperling, director of legislative advocacy at the National Alliance on Mental Illness (NAMI), said, “NAMI is generally satisfied with both bills, though neither is perfect.”

The main thrust of both bills is to extend health insurance-which would include mental health coverage-to about 30 million currently uninsured individuals and families. They would be divided into 2 groups: one group would include low-income individuals and members of families who make too much to qualify for Medicaid. The other group would consist of employees of companies that do not offer health insurance and the self-employed. In terms of a Medicaid expansion, the House bill would cover the poor who are earning up to 150% of the poverty level; the Senate uses a figure of 133%. The Senate bill also allows a state to circumscribe benefits to those earning between 100% and 133%, explained Sperling. As a result, some states could restrict mental health benefits to that group, whose numbers would be somewhat smaller than the 16 million forecast to be covered by the House’s 150% provision.

It is not clear how many individuals and small businesses would buy policies in the new state-run insurance Exchanges and which would offer private policies and at least 1 federally run policy. Companies-most of them small, service-sector businesses with low-wage employees-that do not offer insurance now, would either buy company policies in an Exchange, or their employees would buy individual policies (and the companies would pay a fine for not offering a company policy). Even some larger companies that now offer insurance might jettison those plans and force their employees to go into the Exchange.

So there would be tens of millions of Americans-estimates are all over the place-flooding these state-run Exchanges. “We estimate that the combination of Medicaid and private insurance expansions in the House and Senate health care reform bills will provide coverage to about 2.8 million persons who are currently uninsured and who have moderate to severe mental illness,” states Charles Ingoglia, MSW, vice president of public policy and technical assistance at the National Council for Community Behavioral Healthcare.

Parity is already enshrined in Medicaid. Both the House and Senate bills extend mental health parity requirements established by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 to Exchange policies sold to small businesses and individuals. This is a major gain, because the Wellstone/Domenici bill currently only applies to large-employer plans in the private marketplace. Individual and small-group policies sold outside an Exchange would remain beyond Wellstone/Domenici’s reach.

However, the House and Senate bills use different language to extend Wellstone/Domenici parity to the individual and small-group policies sold in Exchanges. This has created some dissension within the mental health community; some groups argue that the Senate language is unclear whether the Wellstone exemption for businesses with 50 or fewer employees applies to Exchange-sold policies. The House bill calls for full parity, period, for Exchange policies and makes no mention of the Wellstone/Domenici exceptions. So the APA considers it clear and straightforward. “In context of systemic health reform, we hope that Congress [will] not reach back and bring forward any kind of exceptions to parity coverage requirements,” stated Nick Meyers, director of government relations for the APA.

Sperling agreed that the language on parity is different in the 2 bills, and they are “not written in plain English.” The provisions refer back to relevant sections of the Employee Retirement Income Security Act (ERISA) and the Public Health Act. He stated that the House and Senate are on the same page-and that any disputes within the mental health community are “academic.”

Provisions in both bills related to “medical homes” are of intense interest to psychiatrists and the broader mental health community. A medical home is essentially a primary care physician’s office-or another medical facility-where a patient with a chronic disease has his or her care managed. The primary care physician receives a care management fee. He or she also receives additional fees for any medical services, as do specialists brought in to care for the patient. Many see medical homes as the future of health care because they present opportunities for cost savings and better health outcomes.

Congress previously endorsed a Medicare medical home demonstration project in the Tax Relief and Health Care Act of 2006. It was then amended by section 133 of the Medicare Improvements for Patients and Providers Act of 2008. The project (slated to begin in 2010) is being held in abeyance as the Centers for Medicare and Medicaid Services (CMS) wait to see if and how Congress changes its requirements for the demonstration in the health care reform bills. Psychiatrists have been concerned because the CMS demonstration excluded specialists such as psychiatrists from participating directly; the demonstrations were only meant to pay for medical homes run by primary care providers.

“While we understand the first round of the ‘on hold’ 2010 Medicare medical home demonstration grants were targeted at primary care, the categorical exclusion of psychiatrists and other specialists should not be permanent,” said Meyers. “APA is also concerned about how CMS will monitor any medical home demos to ensure that patients have full access to necessary psychiatric services.”

Both the House and the Senate health care reform bills include provisions to encourage development of medical homes and community health teams to improve care coordination. The Senate would create a Medicaid state plan option to establish medical or health homes and specifies that individuals with serious mental health conditions qualify to receive services through this option. The Senate bill also includes funding to support co-location of primary care in community-based mental and behavioral health settings and would create a program to fund community health teams, including primary care physicians and specialists. That provision specifically mentions “behavioral and mental health providers, including substance use disorder prevention and treatment providers.”

The House bill would establish pilot programs in Medicare and Medicaid to encourage development of medical homes. It does not specify that behavioral health specialists must be included on the treatment teams or that mental health or addiction treatment facilities should be allowed to serve as medical homes. The House bill would also redefine community mental health centers as Federally Qualified Behavioral Health Centers, similar to the Federally Qualified Health Centers. “Behavioral health organizations are currently excluded from all federal policy, regulatory, and payment preferences available to other safety-net providers,” explained Ingoglia. This provision changes that and would allow community mental health centers to play a larger role within Medicaid.