In a report released this week by the National Alliance for Mental Illness (NAMI), Georgetown researchers Dania Palanker, JoAnn Volk and Kevin Lucia document the many ways that individual market plans available before the Affordable Care Act (ACA) fell far short of providing adequate, affordable coverage for people with mental illness and substance use disorders. Based on interviews with individuals working in the individual health insurance market and a review of plans available prior to the ACA, the report, Mental Health Parity at Risk: Deregulating the Individual Market and the Impact on Mental Health Coverage, finds a combination of underwriting practices, coverage limitations and medical management practices that made coverage unavailable, inadequate and unaffordable for many people in need of mental health and substance use treatment. Specifically,
- Insurers sought to avoid enrolling individuals with mental health or substance use conditions by requiring applicants for coverage to answer questions about their health history. People with preexisting mental health or substance use conditions would routinely be denied coverage altogether or offered coverage that was much more expensive or excluded the services they were likely to need.
- Benefit limitations and aggressive use of utilization management for mental health and substance use services meant many enrollees were discouraged or prevented from accessing coverage for needed services.
- Restricted access to prescription drugs further limited coverage for mental health treatments. Some plans provided no prescription drug benefits at all, covered only generic drugs, or excluded drugs used to treat mental health conditions.
Prior to the ACA, most states had no requirement that individual market health plans cover mental health services. With enactment of the ACA, all new individual market plans must cover essential health benefits, including mental health and substance use disorder services, and implementing regulations apply federal parity rules to those services, meaning that insurers cannot apply stricter limits on mental health and substance use services than apply to other medical care. But the Administration’s proposed rules on association health plans and short-term plans would expand access to plans that don’t have to meet the ACA’s consumer protections, including coverage of mental health and substance use disorder services, marking a return to the pre-ACA coverage that failed people with preexisting conditions.
To learn more about individual market coverage available before the ACA, visit NAMI’s website, here.