Law Requiring Parity of Mental and Substance Abuse Health Insurance Benefits Implemented

Emma Hitt, PhD

January 29, 2010

January 29, 2010 — Government departments today implemented a law requiring that health insurance cover mental and physical illnesses to the same extent.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 prohibits group health insurance plans from restricting access to care by limiting benefits and requiring higher patient costs for mental health and substance abuse disorders compared with those costs that apply to general medical or surgical benefits.

The new rules were jointly issued today by the US Department of Labor, the US Department of Health and Human Services, and the Treasury.

"Today's rules will bring needed relief to families faced with meeting the cost of obtaining mental health and substance abuse services," stated US Secretary of Labor Hilda L. Solis in a written release. "The benefits will give these Americans access to greatly needed medical treatment, which will better allow them to participate fully in society."

The act expands on the Mental Health Parity Act of 1996, which required parity in lifetime benefits for mental and physical disorders and was not applicable to substance use disorder benefits.

According to the Department of Health and Human Services release, the new law applies to out-of-pocket costs, benefit limits, and practices such as prior authorization and use review. "These practices must be based on the same level of scientific evidence used by the insurer for medical and surgical benefits," the written release states.

The new rules are effective for plan years beginning on or after July 1, 2010, and apply to group coverage provided by employers with 50 or more workers whose group health plans offer mental health or substance use disorder benefits.

"We pushed hard to make sure that the intent of Congress was reflected in the implementation of the parity law," noted Katherine Nordal, PhD, the American Psychological Association's executive director for professional practice in a statement issued today. "We are delighted that under these regulations consumers are protected from insurance discrimination to the greatest extent possible."

Dr. Nordal added that the banning of separate deductibles or the setting of separate out-of-pocket caps for mental health and medical/surgical services is "particularly significant."

"This is a big win for anyone seeking mental health treatment," she said.

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