A Tale of Two States: Do Consumers See Mental Health Insurance Parity When Shopping on State Exchanges?

For 75% of products offered on both state exchanges, quantitative treatment limitations and prior authorization requirements described for behavioral health benefits appeared equivalent to or, in a few cases, more generous than those described for medical-surgical benefits. However, different pictures emerged for each of the two states. There was a fivefold difference in the number of products offered on one exchange versus the other. On the smaller exchange, a potential enrollee could expect to encounter products that appeared inconsistent with parity law more than half of the time, especially products with discrepancies in prior authorization requirements for behavioral health versus medical-surgical benefits. In contrast, on the larger exchange, a potential enrollee could expect to encounter apparent inconsistencies with the parity law less frequently but would be more likely to encounter a benefit description that appeared inconsistent with the financial requirements of parity than would an enrollee on the smaller exchange. This suggests that indicators of inconsistencies with parity law may manifest in patterns that vary from state to state.

The first observable area of discrepancy with federal parity concerns the type of financial requirements (that is, copayment, coinsurance, and deductible) imposed on behavioral health benefits versus medical-surgical benefits. For example, in one product, inpatient medical-surgical stays at out-of-network providers require a copayment, whereas inpatient behavioral health stays at out-of-network providers require coinsurance, which typically results in a higher total out-of-pocket payment than a copayment. [A table with language from benefit documents illustrating each discrepancy is available in an online supplement to this column.] We observed this kind of discrepancy occurring, albeit infrequently, in products offered on both states’ exchanges, affecting in-network and out-of-network benefit categories for inpatient and outpatient services.

We also noted an apparent discrepancy in the application of financial requirements to mental health versus substance abuse benefits. In one product, for example, outpatient in-network primary care and mental health visits were combined for the purpose of exempting the first three visits of either kind from the plan deductible. In comparison, outpatient in-network substance abuse treatment remained subject to the plan deductible from the first visit. Such a benefit design may cause the plan to appear less inviting to potential enrollees who intend to use outpatient substance abuse services, raising concerns about plan selection.

A third area of discrepancy occurred exclusively on the larger state’s exchange, where 11% of products impermissibly matched the financial requirements for outpatient in-network behavioral health visits to financial requirements for outpatient surgical visits, rather than to a reference category of general medical office visits. Although subdivision of outpatient services into office visits and other benefits (for example, outpatient surgical visits) is permitted under parity law and under the interim and final regulations, a comparable subdivision process must be carried out for outpatient behavioral health services in order to apply appropriate financial requirements (5,6). In the pattern we noted, all outpatient behavioral health services appear to be treated on par with the outpatient surgical benefit, which raises concerns about plan selection. Coverage for surgical visits is often more restrictive than for medical visits, so exchange plans that peg their behavioral health benefits to surgical visits may appear less generous to potential enrollees than competitor plans that peg their behavioral health benefits to medical visits. This discrepancy with the parity law may therefore have the effect of encouraging individuals with behavioral health treatment needs to choose a different exchange plan.

As noted above, the prior authorization requirement for behavioral health or medical-surgical benefits was one aspect of compliance with regard to nonquantitative treatment limitations that we observed. Because the processes and evidentiary standards used by issuers to apply these prior authorization requirements are not explicit in the summary documents, we employed a narrow measure of parity in this dimension, flagging only plans whose language suggested that prior authorization requirements are imposed automatically on all behavioral health benefits in a manner inconsistent with the requirements of parity law and guidance issued by the Department of Labor (6). Even using this narrow criterion, we noted several apparent instances of noncompliance with regard to prior authorization occurring in the outpatient benefit classification for products in our sample.

For several health plan products, summary documents specified prior authorization as a requirement for all outpatient behavioral health visits. In contrast, for these same products, prior authorization was either not specified at all as a requirement for outpatient medical-surgical benefits or specified as a requirement that would be selectively applied to certain services in the medical-surgical category. This inconsistent use of prior authorization appeared most often (although not exclusively) on the smaller exchange and was an issue for nearly three-quarters of products on that exchange. There are several possible explanations for the apparent inconsistencies with federal parity law related to prior authorization exhibited in summary documents. For example, issuers may be erroneously interpreting behavioral health as a subspecialty on par with other prior authorization–limited subspecialties in the medical-surgical service category (for example, outpatient radiology or rehabilitative services), rather than as a defined category on par with medical-surgical benefits.