Talking Points in Support of AB 1100,
Legislation To Provide Non-discriminatory Health Care Coverage
for Brain Diseases and Disorders
AB 1100 is a cost effective and affordable
solution to insurance discrimination
against persons with brain disorders and diseases.
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. (1)
__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. (1 )
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. (2)
The high costs to society of untreated and undertreated
mental illnesses are well-documented.
__ Although approximately 2.8% of American adults have severe brain disorders
(schizophrenia, manic depression, severe depression, obsessive compulsive
disorder, and panic disorder), they are about 25% of the people on federal
SSI and SSDI (1 ) and about 33% of the homeless (6).
__ 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 its 1993 landmark report to the 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." (1 )
__ An estimated 7% of prison inmates--seven times the general population
- have schizophrenia. (3). Effective treatment could greatly reduce this,
saving society significant costs in crime, incarceration, 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 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. (1 )
__ Clozapine treatment for schizophrenia, approved by the FDA in 1990, saves
an average of $23,000
in treatment costs per patient annually, largely by reducing the need for
hospitalization. An estimated
$16 billion has been saved with Clozapine treatment. (4)
States with non-discrimination laws prove that
equitable coverage of brain illness results in minimal cost increases.
__ In Maryland, the available inpatient data from 1993 to 1995
from the Maryland Health Resources Planning Commission show that inpatient
psychiatric stays declined over that period after enactment of equality
requirements. (5)
__ All payers in Maryland experienced a year-by-year decrease in the length
of inpatient stays in psychiatric units of general hospitals. For example,
the number of people staying longer than 20 days in private psychiatric
hospitals in 1993 was about 24 %. In 1995, the year after the law's enactment,
it was less than 18 %. Over the same period, the number of people staying
10 days or less went from 50.4 % to 61.44 %.
__ In Minnesota, Governor Arne Carlson and insurers report that there has
been no explosion in costs due to the state's non-discrimination
law (5)
__ Allina Health System, a large managed care organization in Minnesota,
reported that the law would add only 26 cents per member per month for its
460,000 enrollees.
__ After a year under the Minnesota law, Blue Cross/ Blue Shield even had
a premium reduction of 5%-6% in its small business health plans.
__ The Minnesota Department of Employee Relations reported that the added
cost of nondiscriminatory coverage for state employees would be only a 1%-2%
premium increase.
__ In the 1996 federal debate on parity, the governors of New Hampshire
and Maine pointed to the critical cost-effectiveness of their states' parity
laws.
Studies and experience demonstrate that providing
equitable coverage of treatment for mental illness is affordable.
__ A 1996 study (Milkman & Robertson) found that the likely
effect of equitable coverage would be to increase typical plan premiums
by a modest 2.5 % to 3.9 %. A Coopers& Lybrand analysis, excluding substance
abuse, found a 2.6 % premium increase. These estimates are borne out by
the Congressional Budget Office (CBO), which projected similar (i.e., 4
%) premium increases for the federal Domenici-Wellstone parity amendment.
According to CBO's estimate, employers would bear the cost of only 1.6 %
of the estimated premium increase.
__ Insurers and employers could easily offset the modest premium costs associated
with equality. For example, an insurance plan could reduce or largely cover
the cost of the premium increase by increasing outpatient visit and prescription
drug copayments by just $5. Or the plan could impose a modest increase in
the annual deductible, on the order of $30 to $60 per year (or just $2.50
to $5 per month).
__ Texas enacted a non-discrimination law in 1991 for public employees.
The 1994 actual costs of claims for the coverage was $4.11 per employee
per month for state employees and $2.47 per month per employee for school
employees, also covered by the law.
The 1996 federal law is not enough.
The Kennedy-Kassebaum law, while a major step forward, only requires
that lifetime caps and annual benefit caps be the same for mental health
benefits as other plan benefits. It does speak to such issues as deductibles
and co-payments and has no affect 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.
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.
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.
( I ) 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, KD..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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