The Loop

The Advantage of Mental Health Benefits

Filed under: Benefits

The World Health Organization advocates the principle that "there is no health without mental health". Its universal definition of good health is not merely the absence of infirmity, but also the state of "complete physical, mental, and social well-being". Even on a good day, not many people can claim that.

As for mental health, the science is no longer considered some nebulous state of negative feelings. Diagnosable – and treatable – mental health conditions include:

• Attention-deficit/hyperactivity disorder (ADHD)
• Anxiety
• Bipolar disorder
• Dementia/Alzheimer's disease
• Depression
• Eating disorders
• Schizophrenia
• Substance abuse

The Prevalence of Mental Illness
According to the National Alliance on Mental Illness, 1 in 5 adults in the U.S. experience a mental illness in any given year, and almost 1 in 25 lives with a serious mental disorder. Among children, more than 46 percent have experienced a mental ailment in their young lives, with over 20 percent suffering from a severe condition. When it comes to mental illness, early detection, diagnosis and treatment is key, as about half of all chronic mental illness begins by the age of 14; three-quarters by age 24.

If these statistics applied to another type of serious illness, it would likely be considered a national epidemic. But mental illness still languishes under the stigma that it's a character flaw or otherwise controllable weakness. Yet over the last 10 years, Congress has passed legislation to help eliminate barriers that prevented people from receiving mental health care, particularly within the insurance industry.

Insurance Benefits Legislation
In 2008, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) guaranteed parity protection for mental health coverage by group health insurers. This meant that policy provisions for mental health and substance use disorders were no more restrictive than for other conditions. Affected provisions include:

• Deductibles, copayments, coinsurance, and out-of-pocket limits
• Treatment limits for the number of inpatient days or outpatient visits covered
• Coverage for out-of-network providers
• Criteria for medically necessary determinations
• Requiring pre-authorization for specific treatments

However, it wasn't until 2010 that the Patient Protection and Affordable Care Act (PPACA) required all health insurance plans to provide parity coverage for mental services – deeming it one of the 10 categories of essential health benefits. Specifically, all health plans must provide coverage for:

• Behavioral health treatment, such as psychotherapy and counseling
• Mental and behavioral health inpatient services
• Rehabilitation and habilitation services to support people with behavioral health challenges
• Substance use disorder (commonly known as substance abuse) treatment
• Pre-existing mental and behavioral health conditions

The law also mandates that there can be no annual or lifetime spending limits for treatment of these conditions. Furthermore, health plans must provide 100 percent coverage for mental illness preventive services, including depression screening for adults and behavioral assessments for children.

These two pieces of legislation combined impacted more than 62 million Americans, including 23 million enrolled in Medicaid managed care organizations (MCOs), Medicaid alternative benefit plans (ABPs), and the Children's Health Insurance Program (CHIP).

The Cost of Neglect
However, it's one thing to mandate insurance coverage for mental illness, and it's another thing to get people to recognize they have it and actively seek out help to manage it. Unfortunately, in our society there is still a stigma associated with mental illness. Not as much as there was 30 years ago – when health insurers could charge higher rates or cancel a policy altogether once a patient was diagnosed with depression – but vestiges of that stigma still remain. Even medical practitioners have been known to treat mental health issues with little regard, instead focusing on healing physical ailments.

Yet not recognizing and addressing mental illness can further exacerbate the problem, particularly at work. In fact, mental disorders represent the leading cause of disability in the U.S. for adults between the ages of 15 and 44. It is estimated that missed work days and premature deaths result in approximately $150 billion in lost productivity for American employers each year.

A spotty work history can make it harder to find a good job despite having a college education and/or the training and experience appropriate for a specific job. With fewer job prospects, a person who suffers from mental health issues may be unable to support himself and his family, and therefore rely on government welfare programs. This in turn relegates a worker from contributor to economic growth to taxpayer burden. The total societal costs of increased use of the criminal justice system and social welfare benefits associated with mental illness is estimated at $80 billion a year.

The Substance Abuse and Mental Health Services Administration estimates that about 60 percent of adults with a mental illness go untreated each year. This is a significant problem since about 45 percent of people who suffer from a mental health issue also have two or more health conditions that go untreated. Not only that, patients with both mental and physical ailments tend to generate up to 75 percent higher healthcare bills than those without a mental health condition. All told, the cost of not diagnosing and treating mental illness so that physical ailments can be detected ends up costing about $70 billion a year in subsequent healthcare costs.

In total, the U.S. cost of not treating mental illnesses works out to more than $300 billion a year.

Private health insurers aren't the only ones dealing with the expense of covering mental illness. Among the nation's Medicaid enrollees, about half have a mental health diagnosis. Every state Medicaid program offers some degree of mental health services, which may include counseling, therapy, medication management, social work services, peer supports, and substance use disorder treatment. While coverage for adults varies by state, both Medicaid and CHIP programs are required to cover mental health services for enrolled children.

In states that have accepted federal aid to expand their Medicaid programs, mental health and substance use disorder benefits fall under the mandated essential health benefits and must be administered with the same MHPAEA parity requirements as private insurer plans.

Note that because forms of dementia are categorized as a mental disorder, Medicaid also covers all or a portion of nursing home costs for enrollees who suffer from Alzheimer's disease, as long as they meet the program's eligibility criteria for income and assets.

Medicare covers a wide range of mental health services. Part A (hospital insurance) covers inpatient mental health care services received in a hospital, including room, meals, nursing care, and other related services and supplies. Part B (medical insurance) helps cover psychiatrist, psychologist or clinical social worker visits, and lab tests. Part D (prescription drug) provides partial coverage for drugs prescribed for a mental health condition; coverage levels vary by each plan's formulary.

Although Medicare covers mental health services, like many private health insurance plans, it reimburses such care at 50 percent rather than the standard 80 percent reimbursement rate for other conditions. Be aware, too, that the program may deny claims for beneficiaries with a primary or secondary diagnosis of dementia.

Provider Shortage
What good is the mental health insurance benefit if there aren't enough mental health professionals to provide treatment? According to the U.S. Department of Health and Human Services, the country presently lacks 2,800 psychiatrists to meet demand – and those additional professionals would need to be positioned to attend to severely underserved areas and populations.

Not only that, but nearly 60 percent of psychiatrists are age 55 and up, signaling an even greater shortage on the horizon. One of the reasons medical students do not choose to go into the mental health discipline is because the profession earns up to 28 percent less than other physician specialties. Some states have taken the initiative to address this shortage by offering to pay the student loans of psychiatrist graduates who agree to work in underserved areas.

Child Psychiatrists
The population most impacted by the shortage of mental health practitioners is children. Recent problems such as bullying and social media attacks are blamed for the increase of depression in children and teenagers, with one in nine adolescents having experienced a major depressive episode in 2014.

The legislative mandates for mental health insurance coverage are particularly critical for this demographic. However, some child psychiatrists do not accept insurance because reimbursement rates are so low. This means many patients have to pay for mental health care out of pocket even if their insurance plan covers it – which is another deterrent for seeking care. Previous cash-only providers now willing to accept insurance plan reimbursements have had to invest in expensive billing software and navigate the complex quagmire of multiple insurer claims processes – all for 50 percent or less pay.

Unfortunately, not diagnosing and treating children who suffer from mental health issues can exacerbate health problems as they grow into adults. After all, it is widely accepted that a healthy mind is directly correlated with a healthy body. This is why many insurers and health practitioners emphasize the practice of holistic medicine, and why employers value the importance of wellness benefits.

Today, the medical community – and society at large – is beginning to understand the value of prevention, early detection, and treatment of mental and behavioral health conditions in concert with physical healthcare needs.

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