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Battle Looms over Mental Health Parity

By Jason Beahm on May 12, 2010 10:15 AM

Legislation designed to require equal insurance coverage for those with mental and physical illnesses has caused controversy in Washington. The Obama Administration has issued rules regarding a 2008 law that insurance companies and employer groups say goes too far. They argue that the mental health costs of employers and patients both would skyrocket.  

The 2008 law was designed to put an end to the insurance practice of charging higher co-payments and deductibles as well as limiting benefits for those with mental health problems and substance abuse issues. Such practices were common for mental health issues but curiously, not so for illnesses such as cancer. Reuters reported that the new law would apply to all health insurance plans provided by an employer of 50 or more workers

At the heart of the issue is whether the government can step in to regulate insurance and mental health costs in an attempt to eliminate discrimination against certain types of illnesses. As it stands, the insurance companies tend to be more receptive to physical illnesses as opposed to mental.  

Both employers and insurance companies argue that the 2008 law and rules issued by the Obama Administration go too far. They believe that they should retain the ability to manage the specifics of their coverage. As Robert Pear of The New York Times reports, Blue Cross/Blue Shield has spoken out against the measure. The purpose of the 2008 law was to ensure parity in benefits for patients, not "parity in provider reimbursement," said Justine Handelman, executive director of the Blue Cross and Blue Shield Association.

Advocates for mental health patients disagree. They argue that under the current law, mental health patients do not get the care they need because the insurance companies will not foot the bill. 

The regulations could go into effect July 1. 

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