CDCAN REPORT #014-2012: Mental health parity bill, which would require expanded coverage of mental health and substance abuse treatments, advances to Assembly floor

MENTAL HEALTH AND SUBSTANCE ABUSE PARITY BILL ADVANCES TO ASSEMBLY FLOOR FOR CRITICAL VOTE AS EARLY AS THIS THURSDAY

AB 154 Would Require Private Health Insurers and Managed Care Plans To Expand Coverage for Mental Health and Substance Abuse Equal to Other Medical Conditions Covered For Persons of All Ages - Bill Must Pass Out of Assembly By January 31st To Remain Alive

SACRAMENTO, CA (CDCAN) [Last updated 01/24/2012 09:00 PM] - Legislation that would significantly increase coverage for mental health and substance abuse treatments that private health insurers and managed health care plans are currently required to provide under state and federal mental health parity laws, faces a key hurdle, as the bill comes up for a final vote on the Assembly floor as early as this coming Thursday (January 26).  If AB 154, authored by Assemblymember Jim Beall Jr. (Democrat - San Jose, 24th Assembly District), passes the Assembly as expected, the bill then heads to the State Senate, where it faces likely more difficult prospects for passage in the Senate Health Committee.

The legislation could have major impact on millions of Californians with mental health needs and substance abuse issues, including people with disabilities - including people with autism spectrum disorders - who are also diagnosed with a mental illness or for substance abuse. The legislation is one of over a dozen bills pending in the Legislature dealing with expanding health care mandates (requirements).

AB 154 is seen by many mental health, senior and disability advocates as critical in ending discrimination against people with mental health and substance use disorders, saying that people struggling with mental illness quickly exhaust limited coverage and personal savings, and then become dependent upon taxpayer supported benefits

Opponents of this bill including health plans - say AB 154 the new proposed health benefits will increase costs and end up limiting many types of health benefits overall.

AB 154 is similar in concept impacting some of the same population to SB 946 by Senate President Pro Tem Darrell Steinberg (Democrat - Sacramento - 6th State Senate District), which passed the Legislature on September 9, 2011 and was signed by Governor Brown on October 9th.  SB 946 will require from July 1, 2012 through July 1, 2014, private health care service plans and health insurance to provide coverage for behavioral therapies and treatment for persons with autism spectrum and pervasive developmental disorders.  Steps are being taken to implement that legislation over the coming months by state agencies, advocates, health plans and insurers and other stakeholders.

Bill Would Expand Coverage Beyond State and Federal Mental Health Parity Laws

• California currently has a limited mental health parity law for specified severe mental illness since July 1, 2000, the effective date of AB 88 (Chapter 524, Statutes of 1999) authored by then Assemblymember Helen Thomson (Democrat - Davis, 8th Assembly District) that was signed into law by then Governor Gray Davis on September 27, 1999.
• AB 88 requires, after July 1, 2000,every health service plan or disability insurer contract, issued, amended, or renewed on or after July 1, 2000, that provides hospital, medical, or surgical coverage, to also cover diagnosis and medically necessary treatment of severe mental illnesses of a person of any age and the serious emotional disturbances of a child.  The bill exempted, as AB 154 does, Medi-Cal, though not health coverage provided through CALPERS.
• AB 88 defined "severe mental illness" as including schizophrenia, autism, and anorexia nervosa. It defined "emotional disturbances" of a child as one or more mental disorders, other than substance abuse or developmental disability, as identified in the "Diagnostic and Statistical Manual of Mental Disorders".
• Under current State law, less serious mental health issues are subject to utilization controls such as annual caps on number of visits and patient co-payments that exceed co-payments for other medical treatment.
• Under current federal law - the Mental Health Parity and Addiction Equity Act (MHPEA) of 2008 - which went into effect on January 1, 2010, already requires that group health plans with more than 50 employees that offer both medical and mental health benefits to ensure that the mental health and substance abuse benefits are equal to those provided for other medical and surgical benefits.  AB 154 expands this requirement for parity
• AB 154 would change existing State law and expand requirements under AB 88 (except coverage through CALPERS) to require parity to other mental illnesses specified in the Diagnostic and Statistical Manual of Mental Disorders (DSM)-IV to include less serious mental illness such as low-grade depression and anxiety and substance abuses (with certain exceptions) of people of any age.  AB 154 also would go beyond the parity requirements under federal law to require parity - as specified in the bill - for health insurance and health plans for individuals and group health plans with less than 50 employees.

Legislative Analysis of AB 154 Estimates 17 Million Insured Californians Would Be Covered by Bill

• A legislative analysis of AB 154 done by the University of California's California Health Benefits Review Program (CHBRP),  a non-partisan entity established by AB 1996 by then Assemblymember Thomson in 2002 to assess and review legislation proposing new health requirements or mandates (benefits and services) for the Legislature, reported that about 17 million insured persons in California would be covered by AB 154's requirements (mandates).
• The analysis notes that about 74% of those people covered in health plans and policies who would be covered by this bill currently have mental health parity coverage for non-severe mental illness (SMI) services and that 64% have coverage for substance abuse treatment that is at parity to those for medical services.
• The analysis of AB 154 reports that the legislation would provide new covered benefits for non-severe mental illness for 4.5 million people covered in health insurance and health plans and substance abuse treatment for 6.3 million covered by health insurance and health plans.
• The legislative analysis estimates that, among individuals in health plans and policies covered by this bill, utilization (use of services provided as a benefit that this bill would require) would increase by 7.4 outpatient mental health visits and 2.3 outpatient substance abuse visits per 1,000 members per year.  Increased utilization would be the result of elimination of benefit limits that currently exist, and a reduction in cost sharing because current co-insurance rates are often higher for non-severe mental illness and substance abuse treatments than for other health care.
• Utilization would also increase, according to the legislative analysis, among insured individuals who previously had no coverage for conditions other than the severe mental illness (SMI) diagnoses covered under existing State law.
• The analysis on AB 154 also indicates that more stringent management of care would partly offset increases in utilization due to the proposed expansion in coverage in AB 154.
• The analysis further indicated that the impact of the bill would be most extensive in the small group and individual markets since services for non-severe mental illness and substance abuse treatments would already be covered at parity for enrollees in large group plans or policies under the federal Mental Health Parity Act
• The legislative committee analysis of the bill estimates a potential annual increased premium costs in the private insurance market of $60 million. These costs reflect increased premiums by employers for group insurance and premiums paid in the individual health insurance market, that would be partially off-set by reduced out-of-pocket costs of $26 million due to reduced co-payments and deductibles.
• The federal health care reform act - officially known as the Patient Protection and Affordable Care Act (ACA) could eventually further reduce the fiscal impact of AB 154 because that federal law requires a mandatory mental health and substance abuse treatment parity as part of the essential benefits package that all health plans will provide through the State-run California Health Benefits Exchange, according to the committee analysis.

Previous Mental Health Parity Bills By Beall Vetoed

Assemblymember Beall authored three bills in previous legislative sessions (AB 423 in 2007, AB 1887 in 2008 and AB 244 in 2009) relating to the mental health parity issues in AB 154, but all were vetoed by then Governor Arnold Schwarzenegger due to concerns regarding the potential costs of the proposed requirements.

CDCAN SUMMARY OF AB 154

AB 154 - MENTAL HEALTH SERVICES
AUTHOR: Assemblymember Jim Beall Jr. (Democrat - San Jose, 24th Assembly District)
CDCAN SUMMARY:

• Would require private health plans and health insurers to provide coverage for mental health and substance abuse treatment at parity with other medical conditions, for persons of all ages.
• Exempts CalPERS and Medi-Cal from requirements established by the bill.
• Specifies that it will not require a health plan participating in the California Health Benefits Exchange to provide any greater coverage than is required by the "essential benefits package" as defined by the federal government
• "Mental illness" for the purposes of this bill, means a mental disorder defined in the "Diagnostic and Statistical Manual of Mental Disorders IV (DSM-IV)" , (fourth edition) published by the American Psychiatric Association, and includes substance abuse but the bill would exclude treatment of the following diagnoses, all as defined in the manual:
  • Noncompliance With Treatment
  • Partner Relational Problem
  • Physical/Sexual Abuse of an Adult
  • Parent-Child Relational Problem
  • Child Neglect
  • Physical/Sexual Abuse of a Child
  • Sibling Relational Problem
  • Relational Problem Related to a Mental Disorder or General Medical Condition
  • Occupational Problem
  • Academic Problem
  • Acculturation Problem
  • Relational Problems
  • Bereavement
  • Physical/Sexual Abuse of an Adult
  • Borderline Intellectual Functioning
  • Phase of Life Problem
  • Religious or Spiritual Problem
  • Malingering
  • Adult Antisocial Behavior
  • Child or Adolescent Antisocial Behavior
  • There is not a Diagnosis or a Condition on Axis I (V71.09).
  • There is not a Diagnosis on Axis II (V71.09).
  • Nicotine Dependence (305.10). 
• Following publication of each subsequent volume of the manual, the definition of "mental illness" in this bill shall be subject to revision to conform to the list of mental disorders defined in the new latest edition of the manual. Any such revision to the definition of "mental illness" shall be done through State regulation proposed jointly by the Department of Insurance and the Department of Managed Health Care.

PREVIOUS ACTION ON BILL - 01/19/2012:  PASSED out of Assembly Appropriations Committee ("Do pass as amended") by vote of 11 to 6.
CURRENT STATUS OF BILL - 01/23/2012:  On Assembly Floor.  Amended.
NEXT STEPS:  Assembly must pass this bill to the State Senate on or before January 31, 2012 or will be considered "dead" for the rest of the 2012 session.  If it passes out of the Assembly, the bill will then be referred to the Senate Health Committee for a hearing sometime before April 27, 2012 (deadline for policy committees to report out bills that have some fiscal impact)
LATEST VERSION OF AB 154 AS AMENDED - HTML VERSION:  http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0151-0200/ab_154_bill_20...
LATEST VERSION OF AB 154 AS AMENDED - PDF VERSION:  http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0151-0200/ab_154_bill_20...
CDCAN COMMENT:

• AB 154 uses standards and information from the "Diagnostic and Statistical Manual of Mental Disorders, 4th. Edition " issued originally in 1994, with a "text revision" released in June 2000 (the two versions are almost identical according to those who reviewed the book, with some significant changes to the text portions of the manual, but with the diagnostic sections largely the same un both versions).
• Mental health or psychiatric diagnoses are categorized in this manual, sometimes known as the "DSM-IV", and is published by the American Psychiatric Association covering all mental health disorders for both children and adults. The manual also lists known causes of these disorders, statistics in terms of gender, age at onset, and prognosis as well as some research concerning the optimal treatment approaches.
• Mental health professionals use this manual when working with people with mental health needs as a guide to help understand their mental health needs and possible treatments.
• The manual also is used by other professional groups dealing with mental health issues - such as health plans and health insurance regarding mental health needs of their patients.  Many mental health professionals and policymakers dealing with mental health issues consider the manual a critical resource for making mental health diagnoses.
• The manual is available for purchase from several online and physical site bookstores, ranging from $40 to $80, including Amazon and other mainstream online sellers.  The June 2000 revised text version of the manual is 943 pages long.

PRIORITY: VERY HIGH