Achieving Mental Health Parity: New California Law to Increase Coverage

Mental health parity describes the equal treatment of mental and physical health conditions in insurance plans. Essentially, this means that patients should be able to access mental health care just as easily as they do standard medical care.

However, this is a contentious issue. The coronavirus pandemic, economic uncertainty, and political and racial violence have led to new calls for mental health parity.

California is expected to pass a new law that would expand access to mental health services across the state, so that patients can access them before they start showing symptoms. Find out why this new bill is considered so “groundbreaking.”

A Brief History of Mental Health Parity

The U.S. signed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) into law in 2008, which ensured mental health parity for group insurance plans. The Affordable Care Act later revised the law to include individual health plans in 2010. It also required all insurance plans to cover ten essential health benefits, including mental healthcare.

Angela Kimball, National Director of Advocacy and Public Policy for the National Alliance on Mental Illness, says recent legislation has expanded insurance coverage in recent years, but “What remained were much more subtle discriminatory practices.” Certain conditions and illnesses are not covered by insurance. Some companies will not pay for care unless the patient has symptoms.

As Democratic state Sen. Scott Wiener of San Francisco, CA describes the current situation, “Imagine being diagnosed with Stage 1 cancer and being told your insurance will kick in when you get to Stage 4 cancer. That’s what we tolerate for mental health and addiction.”

For many people, particularly during the pandemic, accessing mental healthcare can be a costly burden. Depression, anxiety, and substance abuse remain some of the costliest conditions to treat in the country, far beyond the cost of treating cardiovascular disease, diabetes, and Alzheimer’s.

Behavioral health patients are four times more likely to go out of network to get care, which raises the cost for such services, according to a 2017 report by actuarial firm Milliman.

What Is California Law SB 855?

Based on these challenges, the new California law SB 855 is considered monumental. Currently, the state only requires health plans to cover nine mental health illnesses, but the new law would expand that coverage to include a wider range of mental health issues, including substance use disorders and addiction.

The proposal is expected to become law in the coming weeks, assuming Gov. Newsom signs it. If the law were to pass, it would solidify California as the national leader of mental health and addiction care.

The bill would also change how insurance providers cover mental healthcare services. It would require that determinations of medical necessity be made according to criteria developed by nonprofit clinical specialty associations, not the plans themselves.

The authors of the bill say this legislation is needed now more than ever. Many people are experiencing symptoms of depression, anxiety, and even thoughts of suicide for the first time in their lives during the pandemic, without a history of mental illness.

Julie Snyder, government affairs director for the Steinberg Institute and a composer of the bill, says with everything that’s going on in the news, symptoms of depression and anxiety can come on quickly, even among those without previous issues. Commenting on the bill, she said, “The data just keeps piling up on top of itself. We can’t let the private sector get away with not providing the treatment people need.”

A State in Crisis

Californians have a lot of reasons to seek mental healthcare these days. The state has been considered a coronavirus hotspot for months, as the infection rate continues to rise and fall. Recent reporting shows that around 2,000 stores are expected to close permanently in the San Francisco area alone.

The state also has been suffering from a series of deadly wildfires, and many residents have yet to fully recover from 2018’s Camp Fire, now considered the deadliest and most destructive wildfire in CA history.

According to a recent poll from the Kaiser Family Foundation and the California Health Care Foundation, more than half of Californians thought most people with mental health conditions can’t get the services they need. California patients were more than five times as likely to have office visits with out-of-network providers for mental health or addiction problems as patients seeking medical or surgical care.

Last year, CA insurance companies also paid primary care providers 15% more than behavioral health providers.

Increasing access to mental healthcare usually begins with the insurance industry. If these companies cover behavioral health appointments the same way they do primary care visits, consumers may not be as reluctant to see a therapist or counselor. Reimbursing mental healthcare providers at the same rate as PCPs would also create more of an incentive for providers to offer these services.

2020 has put a new spotlight on mental health concerns. Hopefully, the new California bill will become law in the near future. Once it takes effect, other states will likely follow suit.