Gov. William Donald Schaefer signed legislation yesterday that puts Maryland at the national forefront of mental health care by requiring insurers to provide coverage for mental illness similar to that offered for other ailments.
Advocates are hoping the new law -- which took effect immediately with the governor's signature -- will drastically improve the mental health benefits available to about a third of the state's roughly 5 million residents.
"The passage of this bill clearly puts Maryland way out front in the country," said House Speaker Casper R. Taylor Jr., an Allegany Democrat.
"We've done something really great for the consumer," said Del. Virginia M. Thomas, a Howard County Democrat. "We've done something to help people help themselves."
Typically, insurers have offered far fewer benefits for mental illness than they have for other health problems, a disparity that health care advocates say amounts to discrimination. This law is an attempt to address that concern.
"There is no reason to separate them," said Bette Stewart, executive director of the Alliance for the Mentally Ill of Maryland. "The brain is just another part of the body."
New benefits will be phased in over the next two years, but the measure immediately repeals last year's attempt to establish parity in coverage.
The original law, which was to have taken effect Jan. 1 of this year, has been contested in court by the health insurance industry as vague and difficult to administer. Industry lawyers have said they will drop the lawsuit now.
Insurers say they still fear the new law will increase health insurance costs. Blue Cross/Blue Shield of Maryland officials, for example, estimate that it could cost their policyholders an additional $4 to $6 per month.
Advocates say it is the most comprehensive effort nationwide to establish parity between coverage for mental and other illnesses. Two other states already have required insurers to provide comparable benefits for the most serious mental illnesses, including schizophrenia and manic-depression.
Maryland's new law requires a broader array of benefits, including coverage for emotional disorders and substance abuse.
Insurers will be allowed to phase in the new coverage over the next two years. However, by July 1, 1995, they must provide the same hospitalization coverage -- up to 365 days a year -- that they do for other illnesses.
For the first time, insurers also will be required to pay at least a portion of the cost of psychotherapy if other out-patient treatments are covered.
The law applies to most people who, on their own or through their employers, purchase medical benefits from an insurance company or health maintenance organization.
It does not apply to people who receive benefits through an employer who is self-insured. Government workers and individuals 65 and older also are excluded. And employees of small businesses will be offered a different package of mental health benefits under another state health reform law passed last year.