Information on AB 1100, Legislation
To Provide Non-discriminatory Health care Coverage for Brain Diseases and
Disorders
Assembly members Helen Thomson (D-Davis) and Don
Perata (D-Alameda) have introduced AB 1100. This bill eliminates discrimination
against coverage of brains disorders and diseases by health insurance companies.
It also requires non-discriminatory coverage for other mental illnesses.
AB 1100 is a cost effective and affordable solution to insurance discrimination
against persons with brain diseases.
If you so desire, you may wish to write or telephone
the state Senator and the State Assembly member who represent you, asking
them to vote in favor of this bill. If you do not know who they are, you
may find out by contacting the Senate or Assembly home page. They are linked
to our home page under California Government. The Assembly home page should
also give you information on where this bill is in the legislative process.
We discuss below some of the
reasons this bill is important.
Brain disorders and diseases affect nearly 25%
of Americans.
_Over 50 million adults - at least 22 percent of
the U.S. adult population - suffer from diagnosable brain disorders or diseases
every year. 18 million Americans are affected by depression each year -
twice as many as are affected by coronary artery disease. A recent study
examining six major medical conditions - including hypertension, diabetes,
lung diseases, and arthritis - found only severe heart disease to be associated
with more disability and interruption of daily functioning, including absence
from work, than depression.
Reviews, protocols and cost controls can be
applied by health plans to psychiatric disorders in the same way they can
be applied to treatment of all other diseases.
Individuals with brain diseases and disorders face blatant health insurance
discrimination.
_Nearly 98% of private sector health insurance
plans impose some form of unfair, discriminatory limits on brain illness
treatment, such as higher copayments, and fewer allowable outpatient visits
and inpatient days than are provided for other illnesses.
_If a patient has a brain disease with physical
symptoms, such as Parkinson's disease, a health plan covers the treatment
needed for the disease, but if the disease is schizophrenia, the patient
receives little or no health coverage, even though both are caused by a
malfunction in the brain's production of the chemical Dopamine.
The high costs to society of untreated and undertreated
mental illnesses are well-documented.
_Although approximately 2.8% of American adults
have severe brain diseases (schizophrenia, manic-depression, severe depression,
obsessive compulsive disorder, and panic disorder), they are about 25% of
the people on federal disability and about 33% of the homeless.
_The MIT Sloan School of Management reported in
1995 that clinical depression costs American businesses $28.8 billion a
year in lost productivity and worker absenteeism.
Equality in health care coverage could help
the state save money.
_In a 1993 landmark report to Congress, the National
Mental Health Advisory Council concluded that equality in coverage for severe
brain illnesses would result in a net savings of $2.2 billion a year. It
stated, "The enormous but often hidden costs of untreated or undertreated
severe mental illnesses which are now borne by the general health care system
and society at large, can be appreciably reduced."
_An estimated 7% of prison inmates-seven times
the general population-have schizophrenia. Effective treatment could greatly
reduce this, saving society significant costs in crime, imprisonment, and
human suffering.
Advances in medical science have yielded successful
and cost-effective treatments for brain disorders in the last two decades.
_Major depression, a common clinical problem in
primary health care, can be treated successfully with antidepressant medications
and psychotherapy in 65 to 80% of all cases - a success rate which exceeds
many current common medical treatments for non-psychiatric illnesses.
_Use of the medicine Clozapine to treat schizophrenia,
approved by the FDA in 1990, saves an average of $23,000 in treatment costs
per patient every year, largely by reducing the need for hospitalization.
An estimated $1.6 billion has been saved with Clozapine treatment.
States with non-discrimination laws prove
that equitable coverage of brain illness results in minimal cost increases.
_In Maryland, inpatient psychiatric hospitalization
days declined significantly the first two years after enactment of equality
requirements.
_In Minnesota, Governor Arne Carlson and insurers
report that there has been no explosion in costs due to the state's
non-discrimination law. In fact, the Blue Cross and Blue Shield programs
actually reduced premiums after the Minnesota law had been in effect for
a year.
Studies and experience demonstrate that
providing equitable coverage of treatment for mental illness is affordable.
_Actuarial studies performed in connection with
federal legislative debates have estimated that premium increases from 2.5%
to 4% would fully cover all mental illnesses, less than half of which would
be borne by employers. Actual experience of states with non-discriminatory
coverage shows that the impact is much less or none.
_Insurers and employers could easily offset any
modest premium costs associated with equality. For example, an insurance
plan could reduce or largely cover the cost of the premium increase by a
small increase in the co-payment for outpatient visits or prescription drug
copayments. Or the plan could impose a modest increase in the annual deductible.
The 1996 federal law is not enough to address
the problem.
_In 1996 Congress enacted the Kennedy-Kassebaum
law. Although this is a major step forward, it only requires that lifetime
caps and annual benefit caps be the same for mental health benefits as other
plan benefits. It does not speak to such issues as deductibles and co-payments
and has no effect on groups of 50 or less.
Americans overwhelmingly support non-discriminatory
coverage.
_In a 1993 survey by Parade Magazine, 98% of Americans
stated that medication and/or therapy for mental illnesses should be covered
by health plans, and 87% believed that coverage for psychiatrists should
be the same as other doctors.
Non-discriminatory health care coverage for
illnesses of the human brain is not only the fair thing to do, it is the
cost-effective thing to do.
Sources:
(1) Health Care Reform for Americans with Severe
Mental Illnesses: Report of the National Advisory Mental Health Council,
produced in response to a request by the Senate Committee on Appropriations,
Am J Psychiatry 150:10, October 1993
(2) Joint statement on mental illness parity
by Senator Domenici and Rep. Kasich.
(3) Wyatt, R.J. and Clark, K. D.. Calculating
the cost of schizophrenia. Psychiatric Annals, 17: 589-591, 1987.
(4) Meltzer, Herbert Y. Et al., Cost Effectiveness
of Clozapine in Neuroleptic-Resistant Schizophrenia Am J Psychiatry 150:11,
November 1993
(5) Bazelon Center for Mental Health Law, 1996
Report
(6) Estimate by the Center for Mental Health
Services, a part of the federal Department of Health and Human Services,
1992.
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