We all know – Mental Health is less important than Physical Health…

No, wait, the law is clear! Insurance Companies Must Cover Mental Health and Physical Health the Same

Right?  Ah…Wrong!

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

Hooray for Transparency… Oh wait, not that kind of transparency….

(Cross-posted from Pelto’s Point at the New Haven Advocate)

Yesterday Democratic Legislative Leaders quietly announced that they had reached an “agreement” with the Malloy Administration on the bill that was once known as An Act Concerning The Rate Approval Process For Certain Health Insurance Policies.

Originally known as Senate Bill #11, the legislation passed the Connecticut State Senate 36-0 and the House of Representatives 131-14.

The bill established a public hearing process for when individual and small employer group health insurance companies and HMOs sought rate increases of 10 percent or more.

It required that Connecticut’s Healthcare Advocate and Attorney General be parties to any insurance rate increases hearings, increased the amount of time required before a new rate can take effect, mandated the Insurance Department post rate filings on its website and provided the public with a 30-day comment

Supporters of the initiative included all the major Democratic Legislative leaders, Connecticut’s Healthcare Advocate, ConnPIRG, Citizens for Economic Opportunity, the Connecticut Citizens Action Group, the Connecticut Working Families Party, the CT AFL-CIO and the Connecticut’s leading advocate for those facing serious illnesses, a group called Advocacy for Patients with Chronic Illness.

Opponents included all the major insurance associations including the America’s Health Insurance Plans, the Insurance Association of Connecticut, the Connecticut Association of Health Plans, the American Council of Life Insurers and Anthem Blue Cross-Blue Shield (the entity that had sparked the need for the law when they had requested and almost got last year’s record-breaking premium increases).

But despite heavy lobbying, in the end, the Democrats (and Republicans) supported the transparency and consumer protection legislation.

And then Governor Malloy, who had strongly opposed the huge Anthem increase last year stunned the proponents and advocates by vetoing the bill.

At the time Malloy said, “The Connecticut Department of Insurance already conducts an objective actuarial analysis of each and every rate increase request… The current process fully protects Connecticut’s residents from excessive and discriminatory rate increases.”

For an earlier post on the topic see my blog on Malloy’s veto: http://jonpelto.wordpress.com/2011/07/05/the-power-of-vengeance%e2%80%a6malloy-strikes-back-at-the-unions-at-progressives-at-the-public/

Yesterday a press release from the Democratic leaders announced that rather than attempt to override the Governor’s veto, “the legislature and executive branch are working together to achieve a common goal – greater transparency and public input in the rate increase approval process for health insurance.

The agreement does allow the Healthcare Advocate (OHA) to request that the Insurance Commissioner hold a hearing on rate increases, but only if the increase is at least 15 percent or higher rather than the 10 percent threshold that was included in the legislation.

The agreement also appears to limit the number of hearings to no more than 4 a year.

While the press release is a bit short on details, the agreement appears to relieve the Insurance Commissioner from having to adopt any rules or regulations concerning the definition of when a rate increase is considered excessive or discriminatory.

Some other aspects of the legislation also seem to have disappeared.

The Governor’s website makes no mention of the agreement; however, the press release put out by the Senate Democrats does include the traditional array of self-congratulatory quotes.

Senate President Don Williams said “The General Assembly overwhelming approved Senate Bill 11 because its members believe in the importance of changing the way rate hikes are approved…The Governor shares our concerns and is working with us to immediately improve the process.”

House Speaker Chris Donovan said, “We passed this bill after hearing from thousands of residents facing unconscionable increases in their insurance premiums-small businesses, self-employed individuals and those looking for work-folks who have no leverage to negotiate with the big insurance companies. That is why I am pleased that Governor Malloy and Commissioner Leonardi have agreed to a compromise that will allow public hearings and the participation of the Healthcare Advocate in the rate approval process.”

And Governor Malloy concluded that “This compromise will ensure that consumers have a voice in proposed insurance rate increases without compromising the health and competitiveness of the state’s insurance industry.”

And with that, the drive for transparency takes another step forward followed by another step backwards.