Introduction
Prior to the enactment of the Mental Health Parity Act (MHPA) (1996) into US law, health insurance providers were not legally obliged to make provisions of mental health issues in their health insurance plans. Health insurance mainly pivoted around surgical and other medical benefits. The law was one of the most important legislation that shed light on mental health parity, which extended the responsibility of healthcare providers to treat mental health issues and substance abuse disorders like any other illness, thus warranting almost equal treatment and standardized coverage for such conditions for all persons with a health insurance plan (Stuckhardt, 2019). The major objective of the Mental Health Parity Act is to protect patients with mental health or substance abuse disorders from discrimination by insurance providers, making access to healthcare easier for such persons. However, the Act and its subsequent alterations, which led to the superseding mental Health Parity and Addiction Equity Act (2008), continue to face numerous challenges that limit the extent to which the legislation is implemented.
What is the MHPA?
The initial MHPA became law on September 26, 1996, required healthcare insurance providers to replicate similar lifetime or annual dollar limits on mental health insurance benefits as compared to those offered for surgical or medical benefits, which was not a requirement prior to the legislation. As a result of MHPA, health insurance providers are required, by law, to cover substance abuse disorders and other forms of mental illnesses the same way they would cover treatment for other health conditions. The major objective of the Act was to make health plans offered for substance abuse and mental health to be comparatively similar to other forms of medical benefits offered by health insurance plans, not more restrictive as with previous legislation. (Mark et al., 2018) The overall philosophy surrounding the Act is to compel healthcare providers and insurance providers to treat addiction and mental health issues like any other disease and make access to the different available forms of treatment regarding the disease easy and affordable to the people that need it the most. In general, the Act restricts health insurance providers from imposing higher costs on health insurance plans and other forms of treatment limitations such as limiting the number days covered by the plan, or visits, and the like.
Issues with the MHPA
The initial MHPA was limited, in terms of its implementation. It only applied to group health plans that began on January 1, 1998. MHPA was also limited to an initial sunset provision for insurance health benefits and plans that would be furnished after September 30, 2001 (Stuckhardt, 2019). This meant the law would have ceased to have effect once the deadline elapsed. This sunset provision was extended more than six times- the final sunset extension ran through till December 31, 2007 (Stuckhardt, 2019). Also, employers and insurers soon developed ways to circumnavigate the legislation, which meant it was comparatively harder for patients to access the required quality of care for mental health conditions. There was the emphasis by employers and health insurance providers on cost-sharing, which was mainly implemented via deductibles, co-payments as well as out-of-pocket maximums included in health insurance plans. Caps and limits on visits to a healthcare provider were also imposed, despite restrictions by the Act. The Act did not effectively outline any form of benefit to addiction, only subtly including it in its scope. These limitations served as the major precepts for the development and enactment of the Mental Health Parity and Addiction Equity Act (MHPAEA) (2008) (Stuckhardt, 2019).
The MHPAEA
MHPAEA was enacted in October 2008 as rider legislation on the initial Act. It was mainly enacted to mitigate the various challenges created by the initial legislation. MHPAEA maintained the initial requirement of total or annual dollar limits on mental health insurance coverage as well as aggregate lifetime benefits. However, MHPAEA mandates health insurance providers and team health plans to ensure financial requirement on insurance health benefits which mainly include deductibles, co-payments, out-of-pocket maximums on plans as well as other limitations on treatment benefits are not more restrictive as compared to surgical and medical health insurance benefits. It is also important to note that while these requirements are fundamental and specific to MHPAEA, they do not require employers and health insurance providers to offer explicit insurance plans for mental health issues as well as substance abuse. Instead, the Act only seeks to apply parity when insurance providers and employers offer mental health plans.
Limitations, Exceptions and Implementation Challenges
The major limitation of MHPAEA is the fact that it does not inherently apply to group health plans of smaller sizes. This requirement mainly applies to self-insured plans by private entities with fewer than fifty employees total, which also extends to employers who are self-insured and have fewer than fifty employees. The Act also does not apply to group health plans that result in at least a 2% increase in costs for the first year and 1% for the subsequent years. An employer or health insurance provider that proves to incur these costs as a result of implementing MHPAEA is exempt from complying with the requirements of the Act. Also, the law does not apply to large private and self-funded non-federal employers that decide to exempt the health insurance plan offered to employees from MHPAEA requirements based on the available requirements and procedures for HIPAA Exemption Election.
The major challenge with implementing MHPAEA is ‘carve-out’ health benefits from insurance plans. Carve-out benefits include mental health benefits separately acquired by employers as compared to other health benefits included in health insurance plans. Employers purchase such benefits from a ‘carve-out’ vendor, who is legally required to ensure parity with other forms of health benefits included in health insurance plans (FRANK, 2018). The lack of proper and efficient methods of regularly monitoring and evaluating the enforcement of these provisions means most carve-out vendors streamline their carve-out benefits to significantly reduce the cost of the benefits at the expense of the employees. Also, the Federal Parity Law is fairly complex, ambiguous, and does not effectively offer guidance on the necessary steps needed to implement and enforce MHPAEA requirements on health insurance providers as well as employers (FRANK, 2018).
Conclusion
Indeed, both MHPA and MHPAEA were premised on equity in accessing mental healthcare for employees with substance abuse disorders and other forms of mental illness. The initial Act and the subsequent rider legislation that led to the enactment of MHPAEA continue to fail in delivering on their mandate, owing to certain limitations on the explicit nature of the law and who it targets as well as institutional limitations in implementing the law. As such, it is prudent for the Act to be revised and revisited, to offer clarity in the mechanisms used to implement the law, its provisions and requirements.