In theory, the new Mental Health Parity and Addiction Equity Act is a good law, but it will have a much more serious financial impact than what has been represented to the public, Brian O'Dwyer, a labor attorney, told attendees at the 54th annual International Foundation of Employee Benefit Plans Conference last week.
Starting in 2010, health insurance providers will have to make sure that their mental health benefits are on par with physical illness coverage in terms of the financial and treatment requirements, including copays, coinsurance and limitations on therapy visits and hospitalization. The Congressional Budget Office estimated that the new law would increase premium costs for employer-provided health plans by 0.2%.
"That has not been my experience" with robust coverage of addiction services benefits," O'Dwyer said during his session on basic fiduciary issues in health and welfare plans.
The employment law attorney, who is a senior partner at O'Dwyer and Bernstein, a New York-based law firm, advises trustees and plan fiduciaries to benefit plans governed by the Taft-Hartley Act, the federal law that regulates benefits negotiated between a labor union and employers.
"The first thing that the service provider asks when someone comes in is, 'How many days do you get to be here?' Unfortunately, there are [some service providers] out there who will hear 15 days and then decide that the person can be helped in 15 days," O'Dwyer explained. "But if they hear it's 30 days, then they decide that the person can be helped in 30 days. And if it's 60 days, then that person gets 60 days."
O'Dwyer asserted that equitable mental health and substance abuse coverage is going to be a "costly benefit." "I maybe wrong, because I am not an actuary. But I have been practicing in this field for over 30 years," he added. Some years ago, one of his clients decided to offer unlimited coverage for treating alcohol addiction. "The coverage almost busted the health and welfare fund," O'Dwyer said.
With the new mental health parity law, most employers will probably use a managed care system where an insurance company will determine how many days of hospitalization are required for a particular individual, thus ensuring that patients and health care providers do not take advantage of the law.
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