People With Mental Illness Gain Benefits in New Law

People with mental illness are expected to benefit from expanded insurance access and treatment coverage under a landmark $938 billion health care overhaul signed into law by President Obama on March 23. A follow-up “reconciliation” measure to make some changes sought by Democrats in the House of Representatives cleared Congress on March 25 and also was signed into law.

The primary insurance overhaul measure, titled the Patient Protection and Affordable Care Act (PL111-148), contained the vast majority of the health insurance reform and includes benefits for people with mental illness who have lacked insurance coverage or whose insurance omitted or sharply limited coverage for mental illness treatment.

“It is a major step in the history of health care reform,” APA Medical Director James H. Scully Jr., M.D., told Psychiatric News.

Although mental health care supporters celebrated the overall impact of the legislation, many conceded that it also had some shortcomings.

“While the legislation is not perfect, it is a major step forward in providing health insurance coverage to nearly all Americans and improving the quality of care to our nation's most vulnerable populations, particularly those needing treatment for mental illness, including substance use disorders,” wrote APA President Alan Schatzberg, M.D., in a letter on March 20 to Obama and congressional leaders the day before the House passed the bill.

The legislation requires most Americans to purchase health insurance and provides taxpayer funds to cover 32 million of the 47 million who are currently uninsured. Half of the newly insured—16 million people—are expected to receive coverage from Medicaid, which is already the nation's largest single payer for mental health care.

A raft of popular insurance reform provisions will eliminate lifetime and annual dollar limits, exclusions for preexisting conditions, and rates based on health status, gender, or occupation.

Uninsured Get New Option

New state health insurance exchanges will serve as a marketplace to assist uninsured individuals and small employers in purchasing private health plans. All plans in the exchanges must offer the same minimum benefits package, which must include mental health services, including substance use treatment.

Other provisions require insurers to offer and renew insurance coverage for all who apply; prohibit health insurers from cancelling coverage; specify that premium rates in the individual and small-group market can vary on only the basis of tobacco use, age, family composition, and state-defined geographic rating areas; and allow adult children to remain on their parents' health policies until they turn 27 if they do not have access to a policy on their own.

Because the legislation phases in various insurance provisions over the next decade, the legislation includes a more immediate benefit that may assist people with serious mental illness: new high-risk pools. The legislation requires the Department of Health and Human Services to identify such risk pools by July and to provide temporary coverage for such people until the ban on insurance denials for preexisting conditions begins in four years.

Concerns Remain

Despite their satisfaction with most of the legislation's provisions, APA and other physician groups are concerned about some of them, including a new Medicare cost-control panel, which will analyze various treatments based on comparative-effectiveness research. Some psychiatrists worry that because psychiatric care may not have the types and quantity of comparative effectiveness research as other areas of medicine, its treatments may be more vulnerable to recommendations by the new Medicare commission that the federal government not pay for them. APA plans to watch the commission's work closely.

The legislation also limits to pilot programs funding of innovative health care approaches known as medical homes and co-location of mental health and primary care professionals that could improve care for psychiatric patients with comorbid conditions. Those approaches will be tested on a limited basis; if they are beneficial, mental health advocates plan to push for their adoption throughout Medicare. Such programs have previously been found beneficial, but Medicare does not reimburse physicians for such cooperative care.

It is hoped that these pilot programs will show the benefits of such care so that they will be eligible for reimbursement, said Scully.

The vast expansion of the number of people with insurance coverage has raised concerns that the physician workforce is inadequate to meet an expected rise in demand for its services. Scully said expanding pilot programs to Medicare-wide policies that encourage more primary care physicians to provide basic mental health treatment could offer a way to address the expected increased demand for mental health treatment.

The reconciliation bill that cleared Congress on March 25 (the Health Care and Education Affordability Reconciliation Act of 2010, PL 111-152) makes a series of changes to the new health care reform law that some House Democrats had wanted. This law does not, however, contain any major mental health components. Further, neither law addresses a disparity in Medicare reimbursements for psychiatric care, which mental health groups plan to push for in the future.

“We still have to be mindful that appropriate reimbursement for psychiatric services is still needed,” said Schatzberg in an interview with Psychiatric News.

Another contentious issue that was not addressed in the health care reform legislation is the lack of a long-term “fix” to the federal physician reimbursement system. Congress continues to work on a long-term overhaul of the payment formula used by Medicare and other programs and at press time planned to vote to put off a pending 21 percent cut until May 1. Although an overwhelming majority of senators support continued postponement, Republicans have raised objections since there have been no offsetting spending cuts identified.

More information on the mental health components of the health care reform legislation is available to APA members in a special edition of RushNotes at <http://archive.constant-contact.com/fs091/1101795608829/archive/1103249925487.html>.