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Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Bill 26 would prohibit an insurer that offers group and/or individual health plans from imposing treatment limitations or financial requirements on the coverage of mental health services if similar limitations or requirements are not imposed on coverage of other conditions. The bill would allow an insurer to require pre-admission screening; restrict coverage for mental health services to those that are medically necessary; and exclude mental health services from the plan. "Mental health services" excludes substance abuse, chemical dependency or gambling addition. Finally, SB 26 would amend the Insurance Code and the Health Maintenance Organization Act to make the parity provisions applicable to those Acts.

Significant Issues

Insurance coverage for mental health services has never been on par with other physical ailments. The insurance industry has often argued against including or expanding mental health benefits due to the risks of increased cost potential.

Research has shown that inaccessibility to clinically necessary mental health interventions does not reduce the cost of care to an individual; rather, the cost shifts to treating increased prolonged physical care needs and services including expensive, inappropriate hospitalization. Lack of parity has societal costs with respect to publicly funded health-related programs often absorbing those clients the private sector refuses to address. Treating individuals with chronic, severe mental illness is often challenging, given the unique needs of these individuals. Unfortunately, the insurance industry has historically focused on medical conditions and is extremely limited in its knowledge of rehabilitative or recovery-based care, especially to those with chronic mental illness.

FISCAL IMPLICATIONS

SB 26 does not contain an appropriation.

OTHER SUBSTANTIVE ISSUES

The lack of adequate insurance for these individuals has, and will continue to be, another form of discrimination until parity is addressed. However, the limitations of this legislation do not promote parity. Section 1.B allows the insurer to institute limitations such as pre-admission screening prior to authorization of mental health services if covered under a plan. Individuals with a prior history of mental illness may be denied access through the pre-admission screening process. Of more concern, however, is the language that allows insurers to exclude mental health services from the plan. This language, in essence, nullifies the intent of this legislation that is to provide parity for mental health coverage comparable to other health-related conditions.

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