Meeting Mental Illness’ Costs

Mental illness exacts a financial toll second only to its emotional toll. Too often the burden of recovery is not adequately covered by health insurance. On April 1 a California Assembly committee will consider legislation requiring private health insurers to provide minimum mental-health-care benefits, providing the Legislature a chance for serious debate on the nature of this problem and on potential solutions.

Despite enormous strides in public sensitivity, many people still view mental illness as a stigma. Many will not protect themselves for mental illness as readily as they do for physical illness. The California Coalition for Mental Health says that 15% to 20% of all Americans will need mental-health services during their lifetimes. But, because few think that they will need the services, mental-health coverage tends to get shortchanged in bargaining on benefit packages and in attempts to reduce health-benefit costs.

The costs can be catastrophic. A local screenwriter’s insurance benefits quickly ran out when his daughter was hospitalized for a mental disorder. He and his wife have spent more than $200,000 for their daughter’s care and have sold their family home. His health insurance pays half of psychiatric fees, but there is a $20,000 ceiling and hospital care is limited to 14 days.

Assemblyman Bruce Bronzan (D-Fresno) has introduced legislation requiring that co-payment rates--the part of the bill that the consumer pays--and deductible charges be the same for mental-health care as for general-health care. His bill (AB 2752) also identifies basic types of treatment that must be covered under all private health insurance and other health-care plans. He includes emergency care, residential treatment and outpatient services. The latter is especially important, because it is less expensive than hospitalization and may provide help early enough to prevent serious mental deterioration.

The insurance industry often offers sound mental-health plans, but it doesn’t want to be told what those plans must contain. Lewis Keller, president of the Assn. of California Life Insurance Cos., argues that employers should be free to select the insurance plans that are best suited to their work forces.

The industry opposed legislation last year to require that preventive health care for children be included in all health insurance. The opposition seemed based more on the precedent for expanding mandated coverage than on the nature of the coverage. The industry’s concern was magnified last summer when the U.S. Supreme Court, in an 8-0 vote, upheld states’ authority to require specific benefits.

Members of the Assembly Finance and Insurance Committee need to nail down the most realistic estimates of how much costs and demands for services might increase with wider coverage. One of the strengths of requiring all insurance plans to contain the same minimum benefits is that the risk is spread and the costs for individuals should then be lower. The committee must also address the concern that increased coverage requirements, and any increased costs, may push more companies into insuring themselves; self-insured businesses are exempt from state insurance regulations. What then?

AB 2752 provides the basis for a thorough public debate on an issue that, sadly, confronts more Californians every year. Adequate private coverage, voluntary if possible but mandated if the Legislature deems it necessary, would save many people from an already overburdened public system.