Coverage compromise reached between insurers, advocates for mentally ill

February 04, 1994|By John W. Frece | John W. Frece,Sun Staff Writer

Insurers and advocates for the mentally ill struck a compromise yesterday that could substantially expand insurance coverage of mental illnesses in Maryland.

The agreement also is likely to avert a legal fight over implementation of a mental health parity law that was passed last year but has never gone into effect.

Generally, coverage for physical ailments has been much greater than that for mental illnesses, and advocates for the mentally ill have sought parity for years.

The two sides agreed to support emergency legislation that would eventually eliminate differences in

benefits for inpatient treatment of mental illnesses compared with that of physical illness. For outpatient services, historic disparities would be minimized.

The new legislation, which probably will be introduced today, is intended to replace a law that was to have gone into effect Jan. 1. That law was blocked by a lawsuit filed Dec. 29 by a group of commercial and nonprofit insurers and health maintenance organizations who contended that it was so "imprecise as to be BTC incapable of interpretation, administration or enforcement."

A Feb. 2 trial date was postponed until March 1 when a compromise appeared likely.

As part of yesterday's deal, both sides agreed to ask Baltimore Circuit Judge David Ross to dismiss the lawsuit as soon as the emergency bill is enacted, said Deborah R. Rivkin, executive director of the League of Life and Health Insurers of Maryland.

To push the bill to speedy passage, parties to the compromise -- the Mental Health Association of Maryland, Blue Cross/Blue Shield of Maryland, other insurers, HMOs, psychologists, social workers and others -- have drafted a letter to all General Assembly members endorsing the compromise.

Sen. Patricia R. Sher, a Montgomery County Democrat who arranged the final compromise, said it will offer the mentally ill a full range of benefits they do not now have.

"I think it is wonderful," said Randall M. Lutz, president-elect of the Mental Health Association of Maryland and pro bono attorney for some of the nongovernmental defendants in the lawsuit.

One central element of the deal is a decision to drop a controversial provision in the contested law that would permit policyholders who do not want to pay for mental health coverage to waive it. The effect, both sides agree, would be to make the cost of mental health coverage unaffordable because only those who were likely to need it would sign up.

"People shouldn't have to choose whether they want mental health benefits or substance abuse benefits, because they never know when they may need them. This should be built into their insurance policies, and that's what we have achieved," said Del. Virginia M. Thomas, a Howard County Democrat also instrumental in bringing the two sides together.

Because the proposed changes would enrich the overall benefits that policyholders would receive, the cost of health policies would likely go up by about $5 or $6 per policy per month, according to insurance industry figures.

The contested law, because it contains a waiver, would have led to higher premiums for those who selected mental health coverage. The industry had estimated coverage would cost an additional $200 a month.

If the new law is passed, it would replace the contested law on July 1. Under terms of the agreement, the new law would:

* Raise coverage for inpatient mental illnesses from the current 30 days to 60 days a year until June 30, 1995. After that, coverage would expand to up to 365 days a year, or whatever a policyholder's contract allows for any physical illness.

* Increase coverage for outpatient services from a maximum of 100 visits a year, with the policyholder paying 50 percent of the cost, to an unlimited number of visits, with the policyholder picking up a gradually larger share of the cost as the number of visits increases.

* Cover up to 60 days a year of "partial hospitalization" for those suffering mental illnesses who may need to be hospitalized for more than four hours a day, but for less than 24 hours.

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