Mental Health Insurance and Health Plan

There are many facets to the world of mental health, especially when it comes to health insurance and finding adequate coverage for a variety of afflictions and disorders. We've put together some answers to some of the more common questions revolving around these topics for you below.

Do most health plans include mental health coverage? The answer, simply put, is yes. The vast majority of insurers and health plans cover at least a limited amount of mental health care.

According to a recent employer survey published in the journal Health Affairs: •91 percent of small firms (10-499 employees) and 99 percent of large firms offer mental health and substance abuse coverage in their most used medical plans. •Mental health and substance abuse coverage was included in 87 percent of indemnity plans, 88 percent of HMOs, 97 percent of Point of Service (POS) plans and 93 percent of Preferred Provider Organizations (PPOs).

It is commonly acknowledged today, in 2006, that most employees who have employer-based health insurance have access to mental health coverage, and many of the employees who don't have coverage have simply chosen not to join an employer's plan that includes mental health services.

Does mental health coverage cost more? Yes, this is generally the case. There are limits to mental health coverage and the reason why most employers impose limits is due to cost. Estimates vary widely of how much more mental health coverage costs. Here are some results from some studies:

•A 1998 study sponsored by National Advisory Mental Health Council (NAMHC) Parity Workgroup, a division of the federal National Institute of Mental Health, estimated that mental health services would add less than 1 percent to the cost of a health insurance policy for an HMO.

•A 1998 study by Mathematica estimated a 3.6 percent increase across all plans, with a range of 0.6 percent increase for HMOs up to a 5 percent increase for fee-for-service plans.

•A 1997 analysis by the actuarial firm Milliman & Robertson for the National Center for Policy Analysis, examining the cost of a typical mental health mandate (not specific legislation), concluded that mental health services parity legislation tends to drive up costs by 5 percent to 10 percent. With regard to mental insurance in general, how do insurance companies treat mental illness? Insurance companies tend to be somewhat wary of mental health claims due to the increase of fraudulent claims. When Medicare looked for fraud in the community mental health centers last year, it barred 80 of them in nine states from participating in the program.

The Health Care Financing Administration (HCFA), which administers Medicare, knew something was amiss when the average yearly cost for each senior getting mental health services jumped from $1,642 in 1993 to more than $10,000 by 1997.

Medicare administrator Nancy-Ann DeParle contended at the time that 90 percent of the patients had no mental illness serious enough to qualify for special treatment.

That being said, it's straightforward to understand why there is trepidation on the part of health insurance providers.

What mental conditions are typically covered, and not covered by health plans? Generally speaking, a health plan pays for only those services included in the plan's list of covered services. In the case of mental health services, inpatient and outpatient treatment are most often covered by health plans.

However, there is a continuum of services between inpatient (mental health clinic) and outpatient care that effectively treat many mental disorders and are often more cost-effective than inpatient care at a mental health clinic.

These intermediate services include nonhospital residential services, partial hospitalization services, and intensive outpatient services such as case management and psychosocial rehabilitation. Psychosocial rehabilitation includes pharmacologic treatment, social skills training, and vocational rehabilitation.

Such services are covered by approximately half of employer-sponsored health plans. Prescriptions. Are they covered? Coverage of prescription medications is also important in providing access to treatment for mental health disorders. And, on a positive note, Prescription medications are nearly always covered by health plans (U.S. Department of Labor, 1996; 1998), but this coverage is sometimes limited by formulary restrictions.

Check with your healthcare provider for the exact details on what applies to you and your family with regard to your specific circumstances.