Insurance Update

There’s progress on insurance coverage for anorexics, but there’s still a long way to go.
A previous article on this topic page reported that insurers frequently refuse to cover long hospital stays anorexics often require. But because of recent state and federal legislative action, that situation is changing.

According to an article published on insure.com, the Mental Health Parity Act of 1996 was intended to put coverage for mental illnesses, including eating disorders, on an equal footing with that of physical ailments. However, the Act, which went into effect in January 1998, contained loopholes. The most important of these, according to the article, is the provision prohibiting insurers from setting spending caps for mental health costs. Employers are able to circumvent this restriction by limiting the number of covered visits patients can have with therapists, or the number of covered days for inpatient or outpatient treatment.

U.S. Senators Pete Domenici (R-New Mexico) and Paul Wellstone (D-Minnesota) have sought to remedy this situation by introducing a Congressional bill that would provide full insurance “parity” between treatment for mental and physical illnesses. According to a February 25, 1999 press release by the National Alliance for the Mentally Ill (NAMI), the bill would guarantee equitable coverage for disorders such as severe anorexia by eliminating “unequal restrictions on annual and lifetime mental health benefits, inpatient hospital days, outpatient visits, and out-of-pocket expenses.”

NAMI notes that the legislation would only apply to employers with group plans that already cover emotional disorders. In addition, small businesses with 25 or fewer employees would be exempt.

A 1999 Clinical Psychiatry News article reprinted on Medscape observed that the House version of the bill, introduced by Representative Marge Roukema (R-New Jersey), would provide broader coverage–including provisions that would equalize inpatient and outpatient visit limits, copays, and deductibles for mental health and purely physical conditions. However, the more modest Senate version, according to the article, is designed to minimize opposition from business and insurance interests.

Opponents of the legislation say that it will greatly increase premiums. According to CPN, the 1996 Act exempts plans in which compliance would increase costs by more than one percent, but neither version of the proposed legislation contains this exception. Mental health advocates, according to CPN, argue that any added costs would be offset by increased worker productivity. This position appears to be bolstered by a caringonline article which notes that the portion of medical premiums attributable to mental health benefits actually decreased by 0.2 percent in Maryland after that state’s implementation of a parity statute.

The CPN article observes that the Senate bill does not require plans to provide parity for substance abuse coverage. This issue is of considerable importance to anorexic patients because many of them have a history of drug and alcohol problems.

According to insure.com , as of May 2000, 31 states had parity statutes with widely varying provisions.

State legislation covers substance abuse in Kentucky and Vermont, but not in Arizona, Indiana, Maine, New Jersey, New Mexico, or Tennessee. Massachusetts and Missouri parity statutes include substance abuse only if it stems from a mental illness.

State employees are covered in Indiana and Louisiana, but not in Arkansas. North Carolina covers only state employees.

In Arkansas, there is a small business exemption for companies with less than 50 employees, while in Maine the exemption is limited to employers with a staff of less than 20. California’s statute, on the other hand, has no small business exemption at all, and New Hampshire covers group plans and HMO’s regardless of size.

There are also a number of special provisions peculiar to individual states. For example, Hawaii’s parity statute only covers schizophrenia, schizoaffective disorder, and bipolar disorder. By contrast, Vermont covers any condition involving mental illness and provides comprehensive coverage of deductibles and out-of-pocket expenses.

While the Domenici-Wellstone bill would cover severe conditions, at least one state is considering legislation which would apply to milder cases. According to a February 9, 1999 article in The Daily, the Washington State Legislature has conducted committee hearings on a bill that would require insurance companies to cover treatment for eating disorders in their early stages. According to the article, Dr. James Farrow, director of the University of Washington’s adolescent medical program, said that there would be far fewer instances of severe anorexia and bulimia nervosa if insurers paid for early-stage care.

For suggestions on what to do when insurance companies refuse to pay for treatment, and a sample letter regarding same, visit the website of the Academy for Eating Disorders. Although unrelated to insurance, readers may be interested in an article in the Academy’s Fall 2000 Newsletter, also available online, about the eating disorders documentary “Dying to Be Thin.” The program will air December 12, 2000 at 9:00 p.m (EST) on NOVA/PBS. Directed by Larkin McPhee (who authored the article), it contains case studies of eating disorder sufferers ranging in age from 12 to 56.