By Shelly Nortz
Deputy Executive Director for Policy
Coalition for the Homeless
From: the August 2006 NAMI-NYS News
New York is the only state in the country that does not even have a mandated minimum for mental health coverage by private health plans. Moreover, HMOs and other health insurance plans are permitted to discriminate against those with mental health and addiction treatment needs by charging much higher co-payments and deductibles compared with the fees they charge consumers for regular medical office visits. Many plans also exclude coverage for chronic mental illnesses or impose restrictive limits on inpatient and outpatient care.
For example, top HMOs and health plans in New York have restricted mental health coverage to "acute" mental health conditions susceptible to short term treatment, excluded coverage for chronic mental illnesses; charged a $50 per visit co-pay for the 4th through 20th outpatient visits; and imposed 60-day (30 days per year) lifetime limits on inpatient psychiatric care. All of these restrictions are lawful under New York statutes, as well as the limited federal laws, which merely prohibit separate annual and lifetime dollar limits for mental health care.
Timothy's Law seeks to remedy these barriers to care. It is named in memory of a 12 year-old boy from Rotterdam who hanged himself five years ago after being denied coverage for care he needed to deal with his mental illness. At one point his family even relinquished custody of Timothy, and paid child support to the state, so that they could obtain Medicaid to cover his treatment costs.
At the end of June, the New York State Assembly and Senate reached a last-minute agreement on a compromise bill called Timothy's Law, and both expect to return to Albany before the end of the year — likely in September — to pass it.
BACKGROUND
For the past three years the coalition of more than 350 organizations across New York — including NAMI-NYS as a major leader — known as the Timothy's Law Campaign (TLC) has worked closely with Timothy's family, other parents, and mental health as well as addiction treatment advocates in pursuit of a broad "mental health parity" law for New York.
Thirty-nine other states have one form or another of mental health parity, and advocates here have pushed various bills over the last 15 years, without success.
The original “mandated offering” law in New York merely requires health plans to offer a mental health option to employers; it provides coverage for $700 worth of outpatient treatment and 30 inpatient days per year.
The obstacles to Timothy's Law seemed insurmountable. Opposition from the business community as well as the very powerful HMOs and other health plans had long stalled the effort in the State Senate. Attempts at compromise – including one TLC drafted and released last year – were rejected by both houses as too weak or too much.
TLC sought a basic mental health mandate for all employers (a starting place that assured there would be no loss from what is covered now) with an additional broad parity requirement for large employers that small employers could also buy at their option. This second requirement would exclude unlimited coverage for controversial diagnoses like caffeine addiction, transvestism, and vague things like “relational problem” on the theory that if medically necessary, treatment for such conditions would at least be covered in the base benefit and would not likely require the unlimited coverage that is sometimes required for more debilitating conditions.
Most arguments against parity are rooted in myths about its potential impact upon small employers — that their premiums would rise to such a degree that many would drop health insurance altogether. Parity laws in other states have not proved burdensome. Not a single state has repealed parity, and, in study after study, the real result is lower out-of-pocket costs for consumers, and savings – even under the broadest laws – as the locus of care shifts to outpatient settings and the need for more costly inpatient care is averted.
Businesses elsewhere have not dropped coverage or switched to self-insured status to any appreciable degree. The few that have made changes in their insurance coverage do not cite parity as the reason for the change.
A PricewaterhouseCoopers actuarial analysis for the New York insurance market estimated parity would cost $1.26 more per member per month to provide unlimited mental health and addiction treatment coverage for all employers not exempt under federal law (ERISA).
Nevertheless, the facts were not winning against powerful business and insurance interests – or the stigma that remains attached to mental illness and addictions, which clearly still shapes the opinions of some lawmakers.
Timothy's Law passed the Assembly for the fourth time early this year with only nine negative votes and passionate bi-partisan support. It faced daunting opposition in the Senate, however, where a stripped down alternative parity bill was so universally rejected by advocates, it was not even moved out of committee.
It became clear that only a well-orchestrated campaign with a very strong grassroots element and expert lobbying could hope to win the day on this issue. And that is what TLC did this year. Along with coalition partners and Timothy's father, Tom O'Clair, local groups sponsored crucial grass- roots activities that took place in Suffolk, Westchester, Rockland, Utica, Binghamton, Watertown and several Capital District communities.
The threshold issue that had to be breached was whether there would be any requirement for small employers. There would be no negotiation with the Assembly if not, so the first objective was to get the Senate to include small employers, and find a way to pay for it.
The culmination of this campaign came over the last two weeks of the Legislative Session in Albany with 18-hour days, personal calls and meetings, of which some of the most important were between Senate Majority Leader Joseph Bruno and Tom O'Clair. This included the “crashing” of the opening day event at the Joseph Bruno baseball stadium in Renesselar, in which several advocates participated, including NAMI-NYS. During that event, Senator Bruno promised Tom on the spot that he would not only work to pass a negotiated version of Timothy’s Law, but also to override a Pataki veto if necessary.
That moment resulted from many other “Albany moments.” There were many temper tantrums and lines drawn in the sand — some that stuck and some that washed away. There were endless meetings, vigils, rallies, call-ins, press briefings, late-night last-minute negotiations and efforts to hold a diverse coalition together in the face of immense pressure to split and choose sides. There were also some serious shenanigans from the insurance lobby.
In the end a worthy compromise was struck (very similar in structure to the TLC compromise bill from last year) thanks to expert lobbying and constant grassroots pressure. The mission was to get a law, a win and a foundation from which to build.
At the last minute a demand to move one line out of the insurance law to the back of the bill — where it would live on with the same force in “unconsolidated law” — set the deal back enough that it prevented the bill from being printed in time to pass on the very last night of the Legislative Session. TLC succeeded in persuading all the parties to “lock” the agreement, however, with a joint news release, printing of the bill, and a pledge to pass it on the Legislature's return to Albany later this year.
THE AGREEMENT
The Timothy’s Law agreement specifies a two-tiered mental health benefit structure that can best be understood as two mandates for large employers and a subsidized mandate paired with a “subscriber option” for the same coverage for groups with 50 or fewer employees.
Basic coverage for all;
small employer subsidy
A base benefit would be mandated for all employers, large and small, that offer health insurance not exempt under federal law (self-insured plans) or state law (Healthy New York). The benefit would consist of broad-based mental health coverage, including at least 20 outpatient days and 30 inpatient days, with co-payments and deductibles comparable to those used for physical ailments (financial parity).
Exclusions may be no more restrictive than the state's parity product for civil servants (and lawmakers), the Empire Plan. Exclusion of chronic mental illnesses would thereby be prohibited.
Importantly, the law requires the state Superintendent of Insurance to “develop a methodology to fully cover the cost” of the base benefit mandate for employers with 50 or fewer employees.
The price tag for this state subsidy has been estimated to be anywhere from $60 million to $220 million per year.
This benefits both small employers and the health plans — for which it ends up being an indirect subsidy.
Large employer parity;
small employer option
Above and beyond the base benefit is a parity benefit. The parity benefit also includes “financial parity,” and is mandated for all non-exempt employers with more than 50 employees. The same coverage is optional for small employers.
The benefit provides unlimited mental health coverage of medically necessary care for children and adults with the following diagnoses: schizophrenia/psychotic disorders, major depression, bipolar disorder, delusional disorders, panic disorder, obsessive compulsive disorders, anorexia and bulimia.
It also provides unlimited coverage for children under age 18 who have serious emotional disturbances and are diagnosed with attention deficit disorders, disruptive behavior disorders, or pervasive development disorders, where there are serious suicidal symptoms or other life-threatening self-destructive behaviors; significant psychotic symptoms (hallucinations, delusion, bizarre behaviors); behavior caused by emotional disturbances that place the child at risk of causing personal injury or significant property damage, or behavior caused by emotional disturbances that place the child at substantial risk of removal from the household.
Note that many of the listed diagnoses are plural, meaning they are categories that include more than one diagnosis. It is anticipated that the insurance department will issue a full list once they can consult with clinicians to interpret the list for them. The children's list is fairly clear in this regard. The categories include the following:
Pervasive Developmental Disorders: Asperger's Disorder, Autistic Disorder, Childhood Disintegrative Disorder, Rett's Disorder, Pervasive Developmental Disorder (Including Atypical Autism) not otherwise specified, and
Attention-Deficit and Disruptive Behavior Disorders: Attention-Deficit/Hyperactivity Disorder, Conduct Disorder, Oppositional Defiant Disorder, Disruptive Behavior Disorder not otherwise specified.
Notable among the many diagnoses not included in the parity mandate are Post Traumatic Stress Disorder, many cognitive impairments, a variety of anxiety disorders, personality disorders, eating disorders, sleep disorders, and many addiction-related disorders.
Chemical dependency
Regrettably, the hard-fought effort to include addiction treatment failed. Under current law, there is a 60-visit per-year mandated outpatient treatment benefit for chemical dependency, often with a five-day detoxification benefit included in the major medical coverage, plus optional coverage for seven days of detoxification, and 30 days of rehabilitation. Twenty of the 60 outpatient visits may be for a family member of the insured. Employers may purchase coverage for the inpatient chemical dependency treatment at their option, but this is not required as part of Timothy's Law.
SUNSET
The compromise agreement also provides for a three-year sunset provision as well as a detailed study to be conducted during the course of the three-year period.
What’s next?
The outcome of this year's campaign is obviously bittersweet for those who sought a full parity law covering all diagnoses and addictions. It is terribly disappointing to know there are those amongst us who have been counting on winning a much stronger law in order to address their own needs or those of their loved ones.
On the other hand, this outcome provides a solid foundation from which the law can be strengthened going forward, as TLC works for full coverage for all employees and all mental health conditions, including addictions.
The task for advocates in the near term will be to assure that both houses make good on their promises and pass the bill, and that an agreement can be secured from Governor Pataki to sign the bill into law.
Editor's Note: Governor Pataki signed the bill on December 22, 2006.
