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Mental Health Coverage-Parity and Annual Maximums November 11, 2009

Posted by Admin in Health Insurance, Healthonymous, Money.
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A friend of mine will be released from the hospital soon. This friend has been there for just over two weeks. The insurance coverage ran out on the 6th day. When my friend goes home, they will not be able to return to work full time-at least right away and there will be huge out-of-pocket expenses. The reason the insurance ran out is because the stay was for in-patient mental health treatment, which has an annual cap. The annual coverage maximum was reached on the sixth day, but my friend was not medically ready to be discharged on that day.

So they are facing at least 8 days of bills for treatment, plus the opportunity cost of lost wages, during the treatment and after being discharged. I’m guessing $1000 per day. The bill is in $25,000 for 8 days!

To my friend’s credit and also  the medical staff’s, the stay did not end when the insurance coverage ran out. My friend is struggling and checking into the inpatient facility was actually the healthy thing to do in this case.

I don’t know the specifics for this particular insurance policy, but an important issue in mental health coverage is parity. Parity means the same level of coverage for mental health as there is for medical surgical procedures and illnesses. There is existing legislation about this issue in the US. But beware if you work for a “small business”. See below-

The Dept of Labor Fact Sheet describes the legislation this way:

The Mental Health Parity Act (MHPA), signed into law on September 26, 1996, requires that annual or lifetime dollar limits on mental health benefits be no lower than any such dollar limits for medical and surgical benefits offered by a group health plan or health insurance issuer offering coverage in connection with a group health plan. MHPA applies to group health plans for plan years beginning on or after January 1, 1998.

Naturally, there are some exceptions:

MHPA applies to most group health plans with more than 50 workers. According to Federal Standards, MHPA does NOT apply to group health plans sponsored by employers with fewer than 51 workers. Source

To learn more about laws in the 50 states, visit the web page for the National Council of State Legislatures site here.

My friend’s next challenge will be  financial, to get the bills covered, or written off as no additional insurance coverage will be available from the policy until January 2010. And also to balance the effort of getting the bills covered with the need to focus on the work of healing.  What a shame that our system creates this dilemma.

This is in direct contrast to Speaker Nancy Pelosi’s statement on November 7th, this past Saturday,  that the new House bill will cap only the amount that person has to pay for coverage; but there will be no cap on the benefits they may receive.

Here is a respected site (the non-partisan arm of the Library of Congress) that has published a summary of the bill. I selected the text which included the parity and prohibition of lifetime limits:

Establishes standards for qualified health benefits plans, including standards to: (1) prohibit any preexisting condition exclusions; (2) require guaranteed availability and renewability of health insurance coverage; (3) limit premium variances, except for reasons of age, area, or family enrollment; (4) prohibit discrimination based on health status factors; and (5) require parity for mental health benefits. Requires qualified health benefits plans to provide coverage that meets the standards for the essential benefits package. Prohibits an essential benefits package from imposing any annual or lifetime limits on coverage. Lists required covered services, including hospitalization, prescription drugs, mental health services, maternity care, and children’s oral health, vision, and hearing services. (bold text added)

What price health indeed?

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