No, wait, the law is clear! Insurance Companies Must Cover Mental Health and Physical Health the Same
The Story of Tuition Refund Insurance: 100% for physical illness, 60% for mental illness (and it gets worse).
Here is an interesting lesson about how far we’ve come (or not) it comes to recognizing the way our laws deal with mental health issues.
Since the start of time, health insurance companies provided far greater benefits for treating physical conditions than for mental health issues. Not only was there a widespread stigma against the notion of “mental health problems” but with little to no health insurance coverage for mental health conditions many people chose not to seek treatment or only availed themselves of the most limited help.
Advocates called for “Mental Health Parity”, a profound shift in policy that would require insurance companies to treat physical health and mental health equally when it came to benefit levels.
Thanks to the courageous leadership of people like Former First Lady Rosalynn Carter, outstanding advocacy work by mental health activists, and society’s growing awareness about the importance of mental health treatment, the shift toward “mental health parity” has been gaining broad-based support over the last twenty years.
At last count, at least 23 states have adopted comprehensive mental health parity laws that mandate that insurers treat mental health the same way they treat physical health.
In 2008, the United States Congress took a giant step forward on the issue by passing the Paul Wellstone
and Pete Domenici Mental Health Parity and Addiction Equity Act. The law “prohibits insurance plans from placing limits or costs on mental health and substance abuse services that are more restrictive than those imposed on medical and surgical services.”
While Connecticut was one of the states that had already adopted a mental health parity law, the new federal law went even further in some key areas.
As a testament to how our society has changed (or at least how the market has changed), even America’s health insurance industry supported the new federal legislation.
Physical and Mental Health must now be treated equally, or so I thought.
And then the other day I received a mailing from the bursar’s office of the university my daughter will be attending in September urging me to purchase their preferred “Tuition Refund Plan”, an insurance program that will minimize the financial loss should a student be forced to withdraw from school for health reasons.
As the mailing explained, “The cost of education today is a substantial investment, one which is likely to be your second largest next to a home purchase. If you are hurt or become ill and cannot complete the term, you stand to lose thousands of dollars.”
And following that clear statement of fact, the brochure informs the reader that (luckily for us) a company called A.W.G. Dewar has been providing a Tuition Refund Insurance Plan since 1930.
For only $441 I can sleep easier knowing that, if my child has to drop out, we won’t lose the tens of thousands we’ve invested in this year’s school payments (oh, and as long as she drops out prior to the 4th
week of classes).
But here is the kicker…
“Injury & Sickness Withdrawals: 100% of the insured term tuition or tuition, room and board charges, less any refund or credit due you from the college, will be refunded provided your physical condition is certified by a licensed physician and forces you to completely withdraw from classes.”
“Mental Health Withdrawals: 60% of the insured term tuition or tuition, room and board charges, less any refund or credit due you from the college, will be refunded provided you are confined in a hospital for two consecutive days during the term and have completely withdrawn from classes for any condition whose diagnosis is found in the DSM-IV Manual.”
So if a licensed physician says a physical injury or illness prevents the student from returning to school… the parent gets 100% of the money back.
But if the problem is related to a “mental health issue” the child must be “confined in a hospital for two consecutive days” and even then the “condition” must be one listed in the DSM_IV Manual.
Another company in the same market, Markel Insurance, provides 100% for physical and 75% for mental health issues.
Not a lot of parity in either case.
Meanwhile, a case in Vermont may point to change on the horizon.
Last year, Vermont state regulators determined that their reading of the mental health parity laws means that tuition insurance plans offered in Vermont must provide the same coverage regardless of whether the student must drop out due to a physical or mental condition.
In response, the University of Vermont said it would work with Dewar Insurance to develop a policy that would provide “80 percent coverage for both mental and physical health withdrawals.
Meanwhile, when a reporter with the Burlington Free Press asked the Dewar Insurance president about the policy he explained that the two tiered system was based on the fact that there were more claims for mental illness than for physical illness and that to provide a 100 percent refund for mental health reasons would make the policy so expensive that few would purchase it.
And as to the hospitalization requirement, the Dewar’s president said “while it sounds onerous, we have waived it frequently.” (oh, okay?)
While it is unclear how the Vermont policy is being handled for the academic year starting in September, the policy we were offered most definitely continues to 100 percent/60 percent refund rate.
Perhaps we should see how the Insurance Department in Connecticut (and New York) deal with a complaint. Anyone up for joining me?
After-note: Just discovered the NY Times did a story on this very topic a few days ago… http://www.nytimes.com/2011/07/23/your-money/student-loans/a-tuition-refund-policy-that-pays-less-for-mental-illness.html