Parity legislation, in its purest form, would include insurance coverage for mental health, alcohol, and drug abuse services that would be equal to insurance coverage for any physical disorder in terms of annual or lifetime limitations (service and/or dollar maximums, co-payments, and deductibles).
The following paragraphs briefly summarize the mental health parity legislation which was passed in each of the five states (Gruttadaro, 1995). The parity legislation passed in each state was not identical. For example, while Maryland and Minnesota required parity coverage for all mental disorders as well as substance abuse, Maine, New Hampshire, and Rhode Island required parity coverage restricted specifically to biologically-based mental disorders.
Maine (State of Maine, 1995)
Maryland (State of Maryland, 1994)
The Maryland parity law provides for at least 60 days of inpatient care, 60 days for partial hospitalization, outpatient medication management (the number of visits equal to visits for physical illnesses), psychotherapy with no annual limitations, and graduated co-payments based upon the number of outpatient visits. Partial hospitalization is also a required service benefit.
Minnesota (State of Minnesota, 1995)
New Hampshire (State of New Hampshire, 1994)
Rhode Island (State of Rhode Island, 1994) The law requires all health insurers, including HMOs and medical service plans, "to provide coverage e for the medical treatment of serious mental illness under the same terms and conditions as coverage for other illnesses and diseases". The law also requires that "insurance coverage offered pursuant to this statute must include the same durational limits, amount limits, deductibles, and coinsurance factors for serious mental illness as for other illnesses and diseases (p. I)." The law applies to inpatient hospitalization and outpatient medication visits. The law also permits health insurers to seek information from service providers regarding medical necessity and/or the appropriateness of treatment.
North Carolina (Update, 1997)
Texas (Update, 1997)
Other States (Update, 1997)
In addition to health care reform activities being addressed at the federal level, legislative efforts have been undertaken in a variety of states with regard to managed behavioral health care (including mental health, alcohol, and drug abuse services), mandated mental health and substance abuse insurance coverage, as well as mental health parity issues. While managed behavioral health care legislation has been initiated in approximately 18 states, 42 states have some type of legislative mandate for mental health and/or substance abuse service coverage. A total of 28 states have both mental health and substance abuse insurance mandates. These complex, confusing benefit and coverage limitations vary considerably from state to state (see Table One).
Maine initially enacted a law in 1992 requiring parity for specific biologically-based mental disorders. Nevertheless, in 1995, an amendment was passed (effective 1 July, 1996) that mandated health policies (in group contracts covering more than 20 persons) to provide nondiscriminatory coverage for the following mental disorders: schizophrenia; bipolar disorder; pervasive developmental disorder or autism; paranoia; panic disorder; obsessive-compulsive disorder; and major depressive disorder. This legislation also required other (group or individual) policies and nonprofit hospitals and health plans to offer nondiscriminatory mental health coverage. This law does not provide coverage for the treatment of alcoholism or drug dependence.
The Maine parity law provides for at least 60 days per calendar year for inpatient services, and least $2,000 for any combination of day treatment and outpatient care, with a maximum lifetime benefit of at least $100,000 for the costs associated with a mental disorder.
After 25 years of debate and three years of intensive discussion, Maryland became the first state to enact parity legislation for mental disorders and substance abuse in 1994 (Stauffer, 1996). The law requires non-discriminatory coverage for any person with a mental illness, emotional disorder, drug abuse, and alcohol abuse. The law also requires companies with 50 or more employees to provide for inpatient coverage for mental health and substance abuse treatment vis-a-vis inpatient coverage for physical illnesses. The law allows various co-payments for outpatient services.
In 1995, Minnesota passed legislation requiring parity for all mental disorders and substance abuse. The law stipulates that "cost-sharing requirements and benefit or service limitations for inpatient and outpatient mental health ... and chemical dependency services must not place a greater financial burden on the insured or enrolled, or be more restrictive than requirements and limitation for outpatient medical services ... and inpatient hospital medical services (p. 38)".
This parity law prohibits cost-sharing and service limitations for inpatient and outpatient mental health and chemical dependency services from being more restrictive or placing a greater financial burden on the insured than those requirements and limitations for inpatient hospital medical services and outpatient medical services.
New Hampshire passed parity legislation in 1994 (effective I January, 1995). In New Hampshire, mental illness was defined as "a clinically significant or psychological syndrome or pattern that occurs in a person and that is associated with present distress, a painful symptom, or disability impairment in one or more important areas of functioning, or with a significantly increased risk o suffering death, pain, disability, or an important loss of freedom (p. 937)." The law requires that insurers, hospitals, medical service corporations, and health maintenance organizations (HMOs) which provide health benefits shall provide nondiscriminatory coverage for the following (biologically based) mental illnesses: schizophrenia; schizo affective disorder; major depressive disorder; bipolar disorder; paranoia and other psychotic disorders; obsessive-compulsive disorder; panic disorder; pervasive developmental disorder or autism. The New Hampshire law provides for coverage for diagnostic and treatment services which are equivalent to coverage provided for physical disorders.
Rhode Island passed parity legislation in 1994 (effective I January, 1995). In Rhode Island, serious mental illness was defined as "any mental disorder that current medical science affirms is caused by a biological disorder of the brain and that substantially limits the life activities of the person with the illness (p. 2)." The term includes, but is not limited to: schizophrenia; schizo affective disorder; delusional disorder; bipolar affective disorders; major depression; and obsessive compulsive disorder.
This parity law (effective I January, 1996) applied to state government employees and covered both mental illness and chemical dependency. "Mental Illness" was defined as "an illness which so lessens the capacity of an individual to use self-control, judgement and discretion in the conduct of his affairs and social relations as to make it necessary or advisable for him to be under treatment, care, supervision, guidance, or control (for adults)." For minors, the definition was "a mental condition, other than mental retardation alone that so impairs the youth's capacity to exercise age adequate self-control, or judgment in the conduct of his activities and social relationships so that he is in need of treatment."
Legislation was passed in Texas (effective I September, 1991) which applied to all state and local government employees. In Texas, "biologically based mental illness was defined as "a serious mental illness that current medical science affirms is caused by a physiological disorder of the brain and that substantially limits the life activities of the person afflicted with the illness." The term "biologically based mental illness" included: schizophrenia; paranoia and other psychotic disorders; bipolar disorders (manic-depressive disorders); major depressive disorders; and schizo-affective disorders.
Louisiana, North Dakota, Oklahoma, and Virginia were all states that had task forces and/ or commissions created by their respective state legislatures to study parity legislative proposals. All of the states with the exception to Louisiana, were examining both mental health and substance abuse parity issues.
University of South Florida
© March 1997