How’s S. 558 structured?
This legislation amends existing federal laws which set up standards for health insurance programs which cover the bulk of the 113 million American citizens enrolled within group health programs.
The ERISA (Employee Retirement Income Security Act) – It’s the 1974 law which permits employers to finance and set up their own health programs (that is, self- insure) and therefore avoid all state regulations. There will include an estimated eighty-two million covered lives within these ERISA programs, most of whom will have the ability to access non-discriminatory coverage for the very first time.
The PHSA (Public Health Service Act) – It’s the federal law which blends with state insurance codes to set up standards for the ‘completely insured’ marketplace for group health programs which cover an estimated thirty-one million covered lives (twenty-five million of whom will be enrolled within programs covered by state parity acts).
Key provisions of this bill which set up parity for treatment limitations and monetary limits are repeated as amendments to PHSA and ERISA alike.
Does S. 558 need coverage of mental health benefits or certain services or diagnoses?
Definitely not. It’s vital from the outset to keep in mind that parity articulates the fundamental theory of mental illness being ‘the disease like any other.’ And as such, the goal includes requiring insurance coverage which equals to, yet isn’t superior to, additional clinical conditions like diabetes, cancer, or heart disease. Parity therefore isn’t a treatment or benefit service mandate, yet instead a coverage condition; that is, if you cover mental illness, you can’t impose conditions or limits which don’t apply to all other things.
As a consequence, throughout the whole bill, there’s deference to health programs to determine what they should cover, how to decide what’s necessary medically and how they can manage coverage. Our federal government generally doesn’t impose laws for coverage of certain health services or conditions on the surgical-medical side, therefore this legislation can’t do so upon the mental health part. Furthermore, as noted soon, to the extent that state law mandates these types of activities, the bill doesn’t preempt them.
How’s S. 558 different from the 1996 federal parity law?
The Mental Health Parity Act of 1996 set up parity for lifetime and annual dollar limitations (dollar-base caps coverage applied yearly or over an enrollee’s lifetime). It left health programs free to continuously impose lower caps upon covered outpatient visits and inpatient days, and higher deductibles and cost sharing which just apply to treatment of mental illness. One GAO (Government Accountability Office) year 2000 report upon incorporation of this 1996 act confirmed the discovery. The critical provisions and real impact within S 558 include the expansions of the 1996 act to involve prohibitions upon unequal limits on visits/day limitations and monetary limits. An additionally important provision requires that the parity standard for the treatment of mental illness be measured against ‘significantly all’ surgical-medical coverage; not just a part of surgical-medical benefits.
What’s the scope of mental disorders covered within S. 558?
One difficult issue which parity proposals at the state and federal level have handled is how they can determine mental health benefits, as well as if they should put boundaries upon the scope of mental disorders which have to be covered equally as measured against surgical-medical coverage. Most state parity acts define a disorder list which are subject to equitable coverage, whilst other ones determine mental health benefits upon the basis of the DSM manual by the APA. In contrast, the federal legislation rather defers these types of decisions of scope to the health programs themselves, utilizing the phrase ‘mental health benefits as determined underneath the terms of the group health program.’ The sole qualification put upon this discretion is that substance abuse will be included.
Concerns were raised that the definition provides too much leeway to the health program to exclude specific diagnoses from parity coverage. During the same time, it must be recognized that the 1996 utilized similar language and there isn’t any proof that any health program has utilized this discretion to exclude the chronic severe diagnoses like severe anxiety disorders, major depression, bipolar disorder or schizophrenia. Lastly, as mentioned above, one underlying principle within this bill includes avoiding imposing any law for coverage of certain services or diagnoses (aside from one requirement to cover them upon an equitable basis).
Are there exceptions and exemptions to the parity requirement within S. 558?
Definitely. Firstly, this bill exempts group health programs bought by companies that have fifty or fewer employees (opposed to covered lives that would involve dependents). It has been one portion of federal parity regulations for over ten years and is made to protect small companies from high expenses which may be related to initial compliance. There’s additionally an expense increase exemption which permits companies whose expenses rise over 2 percent as a consequence of initial compliance to set apart the parity requirement for one year. But, after one year of exemption, they have to return to compliance the next year. If expenses rise over 1 percent thereafter, they can seek an additional exemption for the next year.
This expense increase exemption was in place since the ‘96 federal law went into existence and few plans or employers have sought to utilize it. The bill involves numerous features which are likely to deter plans and employers from seeking an expense increase exemption. Firstly, they have to comply with the regulation for a minimum of six months prior to seeking an exemption. Secondly, they have to compile information and seek a decision from an eligible actuary. Thirdly, they have to give notice to every plan enrollee that they’re seeking to waive this law.
Lastly, the administrative expense of creating the cost evaluation and preparing the waiver is more than likely to exceed any savings which may result from avoiding compliance for just one year (particularly within the context of a multiple-year collective bargaining agreement). Studies have shown that while done correctly, parity will increase premiums less than one percent, and within a few instances actually reduces overall expenses.
Does S. 558 permit health plans to manage benefits and use of treatment services?
Definitely. As mentioned above, parity never has been about accomplishing unique status for mental health benefits within group health programs, yet instead coverage which is equal to every additional medical condition. As a consequence, all efforts to utilize parity legislation as a chance to challenge or curb the capability of programs to involve themselves in clinical management of benefits via utilization assessment, exclusion of services deemed not clinically necessary, and so on, couldn’t be included. In other terms, a threshold determination was made that if Congress considered this type of shield as a portion of the ‘Patient Bill of Rights’ law, it’ll do this by concentrating on every health condition (both surgical-medical as well as mental health). Parity isn’t a chance to address these types of problems just for mental health.
As a consequence the bill has ‘clarifications’ that state that nothing within the bill bars programs from managing mental health benefits via the use of clinical necessity, utilization assessment, prior authorization of higher expense services, and so on.