There is parity and then there is parity...

Mind, as Well as Body
A new law will require many health plans to improve their coverage for mental-health care
By JANE ZHANG
Mental-health care may soon cost less for many working Americans.
Starting in January, a new law will require that group health plans put mental-health care and treatment of substance-use disorders on par with physical illnesses.
The Journal Report
See the complete Your Money Matters report.
The law, which will apply to most employers with 50 or more workers, will end currently common limits on mental-health coverage such as 30-day hospital stays and 35 visits a year to a mental-health professional, if a company's plan doesn't apply similar limits to its coverage for physical maladies.
For each plan, co-payments, deductibles and reimbursement rates for doctor visits and hospital stays will have to be the same for both kinds of care. Similarly, if a plan offers out-of-network coverage for physical illnesses, it will have to offer similar out-of-network coverage for mental-health care.
Easing Stigma
These steps will help to ease the stigma of mental illness and to make it easier for patients to get care. "It will reduce the level of formal discrimination," says David Shern, president and chief executive of Mental Health America, an advocacy group in Alexandria, Va., that pushed for nearly two decades, with other groups, to get the law passed in Congress.
The changes will likely lead to lower out-of-pocket costs for workers and family members seeking treatments for mental health and substance use, especially for long-term care. Edward Kaplan, leader of the national-health practice at Segal Co., a human-resources consulting firm in New York, estimates that currently 10% to 15% of all claims for outpatient mental-health therapy go beyond what employers cover.
Wendy Lowe Besmann, of Oak Ridge, Tenn., says the limitations of her family's mental-health insurance forced them to take out a second mortgage five years ago to help pay for her son's treatments, which ended up costing $125,000.
Her 18-year-old son, David, who has bipolar disorder and Asperger's, a developmental disorder, needed at least three months' care in a residential facility back then, far more than the 21 hospital stays covered by the managed-care company. Even now, she says, the family tries to be careful not to use up the 35 visits to psychiatrists and therapists that the plan allows every year. If her insurer removes those limits and makes mental-health insurance more like physical coverage, Ms. Besmann says, "it would make a big difference to us."
Buyer Beware
There are some caveats. The requirements for equal health-care coverage don't extend to insurance plans sold to individuals. Employers that don't provide any health care aren't required to provide mental-health coverage either.
Employers and insurers can choose which disorders to cover, just as they generally do for physical ailments. Experts say that they expect companies to cover schizophrenia, substance-use disorders and other major illnesses, but that some may choose not to cover autism, attention-deficit disorder and some others.
Insurers also are likely to cover only care that is deemed "medically necessary," just as they do for surgeries and other medical procedures. "People will still be told 'you don't need to go see a psychiatrist for a year if it's not medically necessary,' " says Pamela Greenberg, president and chief executive of the Association for Behavioral Health and Wellness, a trade association based in Washington, D.C., that represents managed-care companies specializing in behavioral health.
By law, insurers are required to tell workers, upon request, what criteria they use to deny coverage for any mental illnesses or substance-use disorders. Mental Health America's Dr. Shern says he hopes companies will consider the seriousness of illnesses and patients' rehabilitation needs. But that could also make adjusted plans more costly to employers.
Analysts expect the cost of meeting the new requirements to be low for both employers and insurers. Mr. Kaplan says behavioral-health treatments on average make up just 5% of employment-based health plans, though it varies from plan to plan. In June, when Segal Co. surveyed 18 major insurers representing 80% of the group-insurance market, all but two said the law would increase costs 1% or less, Mr. Kaplan says.
It's unclear how employers will handle the cost increase. Some may choose to absorb any small increases. But several surveys show some are considering passing it on to employees through higher premiums—for both physical and mental health—or lower wage increases.
The government still has lots of details to iron out, too. Some 400 comments from interest groups have been received, says Mary Kahn, a spokeswoman for the Centers for Medicare and Medicaid Services, one of the federal bodies shaping the regulation, along with the departments of Labor and Treasury. A deadline of Oct. 3 has been set.
That might be too late for some companies rushing to finalize their health plans in time for the open-enrollment season, which typically starts in October or November, says Kathryn Wilber, senior counsel for health policy at the American Benefits Council in Washington, D.C. The group represents large employers that offer benefits to more than one million people.
Because the schedule is tight, employees may want to be extra careful about choosing plans this year.
"If you are a patient, you want to read plan documents, look at the description of the plans, what the coverage is, what your obligations are," Ms. Wilber says.
It remains to be seen, for example, how plans will define equal treatment of mental and physical maladies. For example, will there be two annual deductibles in equal amounts: one for physical care and the other for mental health and treatment for substance use? Or will there be one, general-purpose deductible? The details in the federal regulation may clarify that.
Patient advocates want there to be one deductible that covers both mental and physical care. But many insurers want two deductibles, and if plans aren't allowed to have two, Ms. Greenberg says, insurers would likely increase the amount of the single deductible anyway.
Some employers have already made changes to their plans without waiting for the federal regulation to come out. AstraZeneca PLC, for example, started treating mental and physical health the same as of January this year, says Kathy Brooke, the company's director of North America benefits.
That process started in 2007, when the company lowered mental-health co-payments and deductibles to make them equal to those for physical illnesses. Ms. Brooke says the company hasn't seen a big uptake for the use of mental-health care, even though the recession has led to a greater need for employees to use it. "We look at it as an investment for our employees," she says.
The change, Ms. Brooke says, led to a shift to "holistic" and efficient care for the nearly 34,000 people AstraZeneca's health plan covers. "Our insurance company is treating both health and mental health together, so you don't have to use different cards, different deductibles," she says.
It also makes it easier for the management of diseases, especially 30% of the covered lives who have chronic conditions and who are more likely to have depression and other mental-health conditions, Ms. Brooke says.
--Ms. Zhang is a Wall Street Journal staff reporter in Washington, D.C. She can be reached at jane.zhang@wsj.com.