Washington State Lawmakers Expand Parity Mandate

Psychiatrists are celebrating a new Washington state law that expands mental health parity legislation first enacted two years ago.

Last month Gov. Chris Gregoire (D) signed legislation (HB 1460) that extended existing mental health parity requirements to individual and small-group insurance plans. It built on legislation passed two years ago that required all private health insurance policies to provide equal coverage for medical and mental health treatment for large companies—more than 51 employees—by adding companies with fewer than 50 employees. The measure will become effective on January 1, 2008.

“This was one of our leading priorities,” said Sharon Farmer, M.D., chair of the Government Relations Committee of the Washington State Psychiatric Association (WSPA), about the law.

Farmer told Psychiatric News that psychiatrists worked closely with the Washington State Medical Association and the 142-member Washington Coalition for Insurance Parity, which pushed for the bill's passage. The WSPA dropped a push for legislation that would overhaul insurance and Medicaid coding for psychiatrists to focus on the parity push in this session of the state legislature.

The parity law will require health plans to apply the same copayments and out-of-pocket spending caps to all mental, surgical, and other medical procedures. After July 2010, all deductibles must be uniform, and the number of psychotherapy sessions and other mental health treatments may not be capped unless the caps are applied to all medical conditions.

The mental health parity requirement enacted in 2005 became effective January 1, 2006, with requirements that maximum out-of-pocket limits and a single deductible be phased in by 2008 and 2010, respectively.

Gregoire described the measure as helping to create one of the strongest mental health parity requirements in the nation. Although 41 states have some type of parity law, according to APA, 20 states—including Washington—provide exemptions for some small groups from their law's requirements.

“Mental illness, like any illness, must be treated seriously, with timely attention and care,” Gregoire said in a written statement.“ Requiring coverage for mental health care is common sense and means that Washingtonians will get better and more comprehensive care, which is less expensive.”

Supporters est imated that about 540,000 more Washington residents would have mental health coverage through the law. The 2005 law covered about 1.5 million people, including state employees and beneficiaries in Washington's Basic Health Plan, a subsidized health insurance program for the working poor.

Supporters said the biggest beneficiaries of the new law will be individual insurance buyers, because no individual health plans in the state have mental health benefits. Patients with severe mental disorders that require prolonged treatment also would gain, because the law will lift some limits that insurance plans are now allowed to impose on the coverage of psychiatric treatment.

Critics of the law described it as a new mandate on businesses that have smaller profit margins and less flexibility in the insurance they offer employees than companies with hundreds of employees.

Parity proponents countered that an actuarial analysis conducted for the coalition in December 2006 found that the legislation would increase costs for small business and individual plans by only about .05 percent to 1.5 percent. The analysis did not include the expected benefits of mental health parity, which research has shown can result in increased worker productivity, a decrease in absenteeism, and fewer disability claims. Supporters said the law would save society money in the long run through reduced homelessness, emergency-room use, and jail time, which are exacerbated by mental illness.

Parity studies have shown that it has minimal cost impact, “and anyway it's likely to be offset by the benefits,” said Christos Dagadakis, M.D., chair of the WSPA's Public Affairs Committee, in an interview with Psychiatric News.

The coalition pushed for many years to have legislators approve the state's first parity law, but the recent measure worked its way through the legislature with very little opposition. The bill's quick passage has encouraged the psychiatrists to consider further parity changes in coming years. About two-thirds of Washington residents, or about 4 million people, remain uncovered by the new rules, because they receive their health insurance through federal public health programs or employers who self-insure.

“Our plan is to build on parity in small steps,” Farmer said.

Mental health parity supporters said they hoped the law would not be overridden by a weaker federal measure under consideration in Congress (see "DBs Voice Caution About Some Parity Bill Provisions").

The Washington parity legislation is posted at<http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1460&year=2007>.▪