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National Estimates of Mental Health Insurance Benefits

V. Summary of Findings

This study estimates the proportion of the U.S. population with mental health insurance benefits, determines the generosity of available mental health insurance benefits, and estimates the proportion of the U.S. population subject to state and Federal laws mandating mental health parity.

In 1999, 76 percent of the noninstitutionalized U.S. population had mental health insurance benefits. The majority of those who did not have these benefits did not have health insurance at all.

In 1999, approximately 52 percent of individuals with health insurance had mental health benefits that met a benchmark standard of coverage of 30 inpatient days, 20 outpatient visits, and prescription drug coverage. When the uninsured are included in the total, the percentage of individuals with mental health insurance who met or exceeded the benchmark drops to approximately 44 percent of the entire U.S. population.

Approximately 20 percent of the U.S. population had mental health benefits lower than the benchmark, and at least another 2 percent had benefits that did not cover mental health services at all. Insufficient data prevented estimates for an additional 19 percent of the population, either because the individuals had mental health benefits of unknown generosity (12 percent) or because it could not be determined whether they had mental health coverage or to what extent they had any coverage (7 percent). The remaining 15 percent of the population was uninsured in 1999.

Some individuals with mental health benefits that fell short of the benchmark were covered by public insurance programs. Even though Medicare utilization limits exceeded the benchmark, the program lacked prescription drug coverage-a major component of today's treatment for mental illness. How-ever, many individuals also had supplemental Medicare coverage to provide them with some of this protection. Also, Medicaid benefits for adults in six states did not meet the benchmark level of generosity.

Approximately 14 percent of individuals with private, employer-sponsored health insurance through a firm with 10 or more employees had mental health benefits at parity with their medical/surgical benefits. No special restrictions were imposed on mental health benefits, such as differential dollar or utilization limits, or cost-sharing requirements. Across all health insurance sources, approximately 38 percent of individuals with mental health benefits had parity in that coverage. Medicaid is a large provider of health insurance that includes mental health parity in its benefit package.

In 1999, approximately 8 percent of individuals with employer-sponsored health insurance were subject to state statutes requiring full mental health parity. An additional 6 percent of individuals with private, employer-sponsored health insurance lived in a state that had a mental health parity law, but were exempt as a consequence of the firm's self-insured status or small size. As of 2002, as much as 23 percent of the private, employer-sponsored market could be subject to state mental health parity laws, with an additional 11 states enacting such laws between 1999 and 2002.

If all 50 states and the District of Columbia had a full mental health parity law in 1999, with no small business exclusion, a state law would have covered approximately 55 percent of individuals with private, employer-sponsored health insurance. Approximately 37 percent would have been exempt under the Employment Retirement Income Security Act of 1974 (ERISA) preemption. Five percent would not have been covered because their insurance did not include mental health benefits. Data are insufficient to estimate whether the remaining individuals with private, employer-sponsored insurance (3 percent) would have been covered. Individuals with private, employer-sponsored insurance who would have been covered by state laws accounted for roughly 25 percent of the entire U.S. population.

Although the Federal Mental Health Parity Act of 1999 (MHPA) did not provide full financial mental health by requiring parity in cost sharing and utilization limits, it did ensure some level of mental health parity for a larger portion of the U.S. population than was covered by state laws. In 1999, approximately 87.9 million individuals (70 percent) in the private, employer-sponsored health insurance market had health insurance through firms with 50 or more employees that covered mental health benefits, and therefore were subject to the MHPA. In addition to those in the private, employer-sponsored market, the MHPA also covered the Federal Employees Health Benefit Program (FEHBP) and nearly all state/local government health plans.

When individuals in these coverage sources are included, the MHPA reached approximately 42 percent of the U.S. population in 1999. Even with its small business exclusion, the Federal law reached nearly twice the number of individuals who would have been covered had every state enacted a mental health parity law without a small business exclusion.

VI. References

Achman, L., and Gold, M. (2002, March). Medicare+Choice: Beneficiaries will face higher cost sharing in 2002. New York: The Commonwealth Fund.

Achman, L., and Gold, M. (in press). Medicare+Choice: Premium and cost sharing increases in 2002. New York: The Commonwealth Fund.

Agency for Healthcare Quality and Research. (1999, November). Construction of weights for the 1996 medical expenditure panel survey insurance component list sample, methodology report 8. Rockville, MD: U.S. Department of Health and Human Services.

Bachman, R.E. (1996, April). An actuarial analysis of the Domenici-Wellstone amendment to S. 1028, "Health Insurance Reform Act" to provider parity for mental health benefits under group and individual insurance plans. Atlanta, GA: Coopers and Lybrand.

Buck, J.A. and Umland, B. (1997, July/August). Covering mental health and substance abuse services. Health Affairs, 16(4), 120-126.

Buck, J.A., Teich, J.L., Umland, B., and Stein, M. (1999, March/April). Behavioral health benefits in employer-sponsored health plans, 1997. Health Affairs, 18(2), 67-78.

Butler, P. (2000, January). ERISA preemption manual for state health policy makers. Washington, DC: Alpha Center and the National Academy for State Health Policy.

Cassidy, A. and Gold, M. (2000, August). Medicare+Choice in 2000: Will enrollees spend more and receive less?" New York: The Commonwealth Fund.

Centers for Medicare and Medicaid Services. (2002a). Medicaid and EPSDT. Available at [www.cms.hhs.gov/medicaid/epsdt/default.asp]. Last updated June 4, 2002a.

Centers for Medicare and Medicaid Services. (2002b, February). "Medicare managed care contract (MMCC) plans: monthly summary report." Available at [http://www.cms.hhs.gov/healthplans/statistics/mmcc/].

Centers for Medicare and Medicaid Services. (2002c, February 6). The state children's health insurance program annual enrollment report for fiscal year 2001. Available at [www.cms.hhs.gov/schip/].

Centers for Medicare and Medicaid Services. (2001a.) Medicare premium amounts for 2002.

Centers for Medicare and Medicaid Services. (2001, September). Medicare and your mental health benefits. Available at [www.medicare.gov].

Centers for Medicare and Medicaid Services. (2000). Medicare enrollment trends: 1966-1999." Available at [www.hcfa.gov/stats/enrltrnd.htm]. Last updated November 16, 2000a.

Centers for Medicare and Medicaid Services. (2000, January 11). The state children's health insurance program annual enrollment report: October 1, 1998-September 30, 1999. Available at: [www.cms.hhs.gov/schip/].

Center for Mental Health Services. (2000). Mental health and substance abuse services under the state children's health insurance program: Designing benefits and estimating costs. DHHS Publication No. SMA 01-3473. Rockville, MD: Substance Abuse and Mental Health Services Administration.

Chollet, D.J. and Kirk, A.M. (1998, March). Understanding individual health insurance markets. Menlo Park, CA: Kaiser Family Foundation.

Commerce Clearing House, Inc. (no specific date available). Medicare and Medicaid guide: State Medicaid plan summaries. Chicago: Commerce Clearing House, Inc. (The date each plan summary was most recently updated is listed in parenthesis at the end of the bulleted list in Chapter III, Section A.3).

Congressional Budget Office. (2001, August). Cost estimate of S.543: Mental Health Equitable Treatment Act of 2001. Washington, DC: Author.

Department of Veterans Affairs. (2002, February). Health Care System Web site [www.va.gov/health/elig/].

Department of Veterans Affairs. (2001a, August). "CHAMPVA fact sheet 01-7: General information. Available at [http://www.va.gov/hac/forbeneficiaries/champva/champva.asp].

Department of Veterans Affairs. (2001b, March). CHAMPVA fact sheet 01-1: Mental health and substance use disorder benefits." Available at [http://www.va.gov/hac/forbeneficiaries/champva/champva.asp].

Ellwood, M. and Quinn, B. (2002, February). Background information on dual eligibles in MSIS FY1999. Cambridge, MA: Mathematica Policy Research, Inc.

Gabel, J., Dhont, K., Whitmore, H., and Pickreign, J. (2002, April 17). Individual insurance: How much protection does it provide?" Health Affairs Web exclusive.

Health Care Financing Administration. (1999, December). "Medicare managed care contract (MMCC) plans: Monthly summary report." Available at [http://www.cms.hhs.gov/healthplans/statistics/mmcc/].

Health Care Financing Administration. (1999). Medicaid managed care enrollment report: Summary statistics as of June 30, 1999. Available at [www.cms.hhs.gov/medicaid/mcaidsad.asp].

Health Care Financing Administration. (1992, December). Report to Congress: Medicaid and institutions of mental diseases. Washington, DC: Department of Health and Human Services.

Hennessy, K. (2000, August). Medicare's mental health coverage. Psychiatric Services, 51 (8), 1050-1051.

Indian Health Service. (2002). FY 2002 Budget Justification Requests: Mental Health. Available at [www.ihs.gov/adminmngrresources/budget/FY_2002_Budget_Justification.asp]. Last updated March 22, 2002.

Jensen, G.A., Rost, K., Burton, R., and Bulycheva, M. (1998, May/June). Mental health insurance in the 1990s: Are employers offering less to more? Health Affairs, 17(3), 201-208.

Kaiser Family Foundation, Health Research and Educational Trust, and The Commonwealth Fund. (2002, April). Erosion of private health insurance coverage for retirees. Menlo Park, CA: Author.

Kaiser Family Foundation and Health Research and Education Trust. (2000). Employer health benefits: 2000 annual survey. Menlo Park, CA, and Chicago, IL: Author.

Kaiser Family Foundation. (2000, August). Immigrants health care: Coverage and access. Menlo Park, CA: Author.

Kuo, S. and Draper, D. (2002, January). A literature synthesis on Medicaid financing of state and county psychiatric hospitals. Washington, DC: Mathematica Policy Research, Inc., for the Substance Abuse and Mental Health Services Administration.

Lake, T., Sasser, A., Young, C. and Quinn, B. (2002, February). A snapshot of the implementation of California's mental health parity law. Oakland, CA: California HealthCare Foundation.

Laschober, M.A., Kitchman, M., Neuman, P., and Strabic, A.A. (2002, February). Trends in Medicare supplemental insurance and prescription drug coverage: 1996-1999. Health Affairs Web exclusive.

Louisiana Revised Statutes § 22:669 (1).

Mann, C. (2002, February). The new Medicaid and CHIP waiver initiatives. Menlo Park, CA: The Kaiser Family Foundation.

Manning, W., Wells, K., Buchanan, J., et al. (1989). Effects of mental health insurance: Evidence from the health insurance experiment." Santa Monica, CA: RAND.

Mark, T.L., Coffey, R.M., King, E., Harwood, H., McKusick, D., Genuardi, J., et al. (2000, July/August). Spending on mental health and substance abuse treatment, 1987-1997. Health Affairs, 19(4).

McArdle, F., Coppock, S., Yamamoto, D., and Zebrak, A. (1999, October). Retiree health coverage: Recent trends and employer perspectives on future benefits. Menlo Park, CA: Kaiser Family Foundation.

National Alliance for the Mentally Ill. (2002, June). State mental illness parity laws: Chart of state laws. Available at [www.nami.org]. Arlington, VA: Author.

National Conference of State Legislatures. (2001, October 18). State laws mandating or regulating mental health benefits. Available at [www.ncsl.org].

National Conference of State Legislatures. (2001, December 21). State laws mandating or regulating mental health benefits. Available at [www.ncsl.org].

Nevada Revised Statutes § 689A.0455.

Office of Personnel Management. (2000, April 11). FEHB program carrier letter, letter no. 2000-17. Washington, DC: Author.

Office of Personnel Management. (2001.) Mental health and substance abuse chronology. Washington, DC: Author.

Pollitz, K., Sorian, R., and Thomas, K. (2001, June). How accessible is individual health insurance for consumers in less than perfect health? Menlo Park, CA: Kaiser Family Foundation.

Rogers, J. (1996, May 31). Analysis of the mental health parity provision in S. 1028. Washington, DC: Price Waterhouse LLP.

Sharma, R., Chan, S., Liu, H., and Ginsberg, C. (2001, September). Health and health care of the Medicare population: Data from the 1997 Medicare current beneficiary survey." Rockville, MD: Westat.

Sing, M., Hill, S., Smolkin, S., and Heiser, N. (1998). The costs and effects of parity for mental health and substance abuse insurance benefits. Washington, DC: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration.

Sturm, R. and Pacula, R.L. (2000, November). Mental health parity and employer-sponsored insurance in 1999-2000: I. limits." Psychiatric Services, 51(11), 1361.

TRICARE Management Activity. (2000). TRICARE standard handbook. Available at [www.tricare.osd.mil]. Last updated May 19, 2000.

U.S. Department of Health and Human Services. (1999). Mental health: A report of the surgeon general. Rockville, MD: U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, National Institutes of Health, National Institute of Mental Health.

U.S. General Accounting Office. (2002, February). Private health insurance: Access to individual market coverage may be restricted for applicants with mental disorders. GAO-02-339. Washington, DC: Author.

U.S. General Accounting Office. (2001, July 13). Stronger efforts needed to ensure children's access to screening services. GAO-01-749. Washington, DC: Author.

U.S. General Accounting Office. (2000). Mental health parity act: Despite new federal standards, mental health benefits remain limited. Washington, DC: Author.

U.S. General Accounting Office. (1996, November 25). Private health insurance: Millions relying on individual market face cost and coverage trade-offs. GAO/HEHS-97-8. Washington, DC: Author.

VII. Appendix A: Sources of Health and Mental Health Insurance

This appendix reviews the major sources of mental health insurance in the United States, as well as recent research on each source. The review begins with private, employer-sponsored insurance and extends to public sources of mental health insurance. Sources of insurance are presented in order of the number of covered individuals.

A. Employer-Sponsored Plans

Nearly half the U.S. population is covered by employer-sponsored health insurance. The General Accounting Office (GAO) (2000a) found that a large majority of employers provide mental health insurance, but they impose more restrictive limits on that coverage than on the medical and surgical insurance they offer. Since the Mental Health Parity Act (MHPA) of 1996 prohibited employers from imposing different dollar limits on mental health coverage than on medical and surgical coverage, employers increasingly have substituted utilization limits for dollar limits.

Sturm and Pacula (2000) found that in 1999, 80 percent of individuals with mental health insurance had inpatient day or outpatient visit limits. More than 50 percent of such individuals were limited to 20 or fewer outpatient visits; approximately 60 percent were limited to 30 or fewer inpatient days.

Jensen et al. (1998) reviewed how mental health benefits provided through employer-sponsored health plans changed from 1991 to 1995. They found that, although a larger number of employer health plans included mental health benefits, the benefits became more restrictive over the study period. In addition, plans increasingly imposed separate limits for outpatient mental health visits and inpatient days. Furthermore, in 1995, individuals enrolled in health maintenance organizations (HMOs) were more likely to face stricter day or visit limits than those not enrolled in HMOs. For example, 88 percent of the HMOs placed a limit on visits, but only 36 percent of non-HMOs imposed such a limit. Seventy-six percent of the study's non-HMOs imposed a dollar limit on outpatient care, while 16 percent of the study's HMOs imposed such a limit.

In another study, Buck and Umland (1997) found that from 1989 to 1995, employers substituted utilization limits for dollar limits. For example, in 1985, 62 percent of employers limited the maximum amount per lifetime on outpatient visits, and 33 percent limited the number of visits per year. In 1995, 37 percent of employers limited the maximum amount per lifetime on outpatient visits; 48 percent limited the number of visits per year. The most common outpatient benefit limit imposed by HMOs was 20 visits, which, as Buck and Umland note, is the amount specified by the Health Maintenance Organization Act of 1973 for federally qualified HMOs. From 1986 to 1994, HMOs increasingly were likely to require co-payments as opposed to co- insurance for mental health care, thereby controlling costs.

Following implementation of the MHPA, the U.S. Government Accounting Office (2000a) found that employers were imposing mental health service limits that were more restrictive than limits for medical and surgical benefits. In a survey of employers subject to the MHPA, GAO found that 87 percent of respondents who complied with the MHPA's provisions still were subject to more stringent limits on mental health coverage than on medical and surgical benefits. Furthermore, approximately two-thirds of employers who changed their dollar limits to comply with the law made their mental health benefits more restrictive by lowering the number of visits or days, or by raising co-insurance rates. Most of these newly compliant employers covered fewer office visits for mental health than they had in the past.

B. Medicare

Enacted in 1965, Medicare is the largest publicly sponsored health insurance program in the United States, covering an estimated 36.1 million individuals in 1999. The majority of Medicare beneficiaries-87 percent in 1999 (Centers for Medicare and Medicaid Services, 2000a)-are elderly, aged 65 years and older.

The elderly qualify for Medicare based either on their own or their spouse's contributions to the program for at least 40 quarters, through payroll taxes. Those who are otherwise eligible but have not contributed for the full 40 quarters may buy into the program by paying additional premiums.

Approximately 13 percent of the Medicare population is under age 65 and qualifies by being either totally and permanently disabled or diagnosed with end-stage renal disease (ESRD). Approximately 10 percent of all Medicare beneficiaries-including 41 percent of Medicare beneficiaries under age 65-self-report a mental disorder (Sharma, 2001).

Medicare's benefit package is divided into Parts A and B. Part A provides hospital insurance; Part B provides coverage for physician services and outpatient expenses. Stays in psychiatric hospitals are subject to the same cost-sharing structure applicable to stays in general hospitals, including an $812 Part A deductible¹ per benefit period.² In addition to the deductible, beneficiaries must pay $203 per day for days 61 through 90 of a hospital stay and $406 for days 91 through 150.³ Beneficiaries must pay all costs for days spent in the hospital beyond 150 per benefit period. Sixty lifetime inpatient hospital reserve days with a co-insurance of $406 per day⁴ also are available (Centers for Medicare and Medicaid Services, 2001a). Medicare limits inpatient stays in psychiatric hospitals to 190 lifetime days. Mental health care in a general hospital, such as in a psychiatric unit, is not subject to the 190-day lifetime limit.

Part B has an annual $100 deductible, which includes both mental and physical health care. For most physician services, the beneficiary co-insurance is 20 percent. However, Medicare beneficiaries pay 50 percent for visits to psychologists and 20 percent for visits to psychiatrists and hospital outpatient clinics (Centers for Medicare and Medicaid Services, 2001b; Hennessy, 2000). No utilization limits are placed on the number of outpatient mental health visits for Medicare beneficiaries. Medicare does not cover the cost of prescription drugs, which have become increasingly important in the treatment of mental illness over the last decade.

Due to limitations in Medicare's benefit package, 88 percent of Medicare beneficiaries in 1999 had some form of supplemental insurance coverage (Laschober, 2002). Below are descriptions of the major sources of supplemental Medicare insurance.

1. Medicare+Choice (M+C)
In 1999, more than 6.3 million Medicare beneficiaries, or roughly 16 percent, were enrolled in Medicare's managed care program, Medicare+Choice (Health Care Financing Administration, 1999a).⁵ Medicare+Choice plans must cover all Medicare benefits that are part of the traditional Medicare benefit package.

Cost sharing under Medicare HMOs generally is less than traditional fee-for-service Medicare. Some plans, however, recently have instituted cost sharing for certain services, including inpatient mental health stays, which can be higher than traditional Medicare (Achman and Gold, forthcoming). This cost sharing is allowed because M+C plans are required to have an actuarial value only that is equal to or more than the entire Medicare benefit package and thus may go below the value of individual benefits.

Medicare+Choice plans are allowed to offer supplemental benefits not covered in the traditional Medicare benefit package. These benefits are financed either through the savings the plan can generate by providing traditional Medicare services or by charging enrollees additional monthly premiums. In 1999, approximately 84 percent of Medicare+Choice enrollees had prescription drug coverage (Cassidy and Gold, 2000). Twenty-two percent of enrollees with drug coverage had an unlimited prescription drug benefit; the remaining 78 percent had some annual cap on benefits.⁶

2. Medigap Insurance
In 1999, 24 percent of Medicare beneficiaries had supplemental coverage under a Medigap plan (Laschober et al., 2002). Medigap plans fill much of the cost sharing required under Medicare. Two-thirds of all Medigap plans take the form of one of 10 standardized policies (Plan A through Plan J) by the Centers for Medicare and Medicaid Services [CMS]); the remaining plans were purchased before 1990, with little currently known about the specific benefits they cover.

The standardized policies cover the co-insurance for both Part A and Part B, the Part A deductible, and 365 additional hospital days during a beneficiary's lifetime. The additional 365 days are for general hospitals and do not extend the 190-day limit for inpatient care at psychiatric hospitals.

Three Medigap plans (H, I, and J) cover prescription drugs, though their coverage is relatively limited compared with most private insurance plans.⁷ Only about 27 percent of Medicare beneficiaries with Medigap supplemental insurance had some drug coverage in 1999 (Laschober et al., 2002).

Medigap plans can provide financial protection for the elderly, but they are less likely to help the disabled population under age 65, for which a much higher incidence of mental disorders is reported. For the most part, insurers are not required to sell Medigap policies to Medicare beneficiaries under age 65. Only 19 states require a special open-enrollment period for at least one of the standardized Medigap policies for beneficiaries under age 65.⁸

3. Employer-Sponsored Retiree Coverage
Approximately 33 percent of Medicare beneficiaries in 1999 had supplemental health insurance through a current or former employer (Laschober et al., 2002). Retiree health insurance for the population over 65 years of age generally wraps around the Medicare benefit package, reducing individual out-of-pocket costs for co-insurance and deductibles. A typical large employer's retiree health plan for Medicare eligibles includes a $300 deductible, 80 percent employer co-insurance, and an out-of-pocket limit of $1,750 (McArdle et al., 1999).

No information currently exists on the provisions in retiree health coverage specific to mental health services. In 1999, approximately 83 percent of Medicare beneficiaries with employer-sponsored supplemental insurance had some drug coverage (Laschober et al., 2002).

The share of all employers offering health benefits to Medicare-eligible retirees has been shrinking over the past decade and is expected to continue to decline in the near future (Kaiser Family Foundation et al., 2002). In addition, more employers are expected to shift a greater share of costs onto retirees by increasing premium contributions and imposing greater cost-sharing requirements (Kaiser Family Foundation et al., 2002).

4. Dual Eligibility With Medicaid
Low-income Medicare beneficiaries can qualify for supplemental Medicare coverage through state Medicaid programs. In 1999, approximately 11 percent of Medicare beneficiaries had supplemental coverage from Medicaid. Federal law requires that state Medicaid programs cover Medicare Part B premiums and Medicare cost-sharing expenses for Medicare beneficiaries with incomes less than 100 percent of the Federal poverty level and resources less than twice the Social Security Income program limit (Ellwood and Quinn, 2001). In addition, those who meet state Medicaid income and asset standards can qualify for full Medicaid benefits. In fact, the vast majority of those who are dual eligibles in all states also qualify for full Medicaid benefits in addition to their Medicare benefit package (Ellwood and Quinn, 2001).

Additional benefits depend on the state, but may include case management and adult day care services, which can be valuable to individuals with a mental disorder. All state Medicaid programs also cover outpatient prescription drugs. In 1999, 89 percent of dual eligibles had prescription drug coverage.⁹

Medicaid pays the Medicare deductibles and co-insurance for dually eligible individuals. However, only about a third of state Medicaid programs cover the Medicare co-insurance requirements in full (Ellwood and Quinn, 2001). The remaining states use the Medicaid rate schedule to determine the level of payments for service providers, which can be less than the Medicare amount. If providers are unwilling or unable to accept the Medicaid payment rates, low reimbursements for Medicaid enrollees could pose a potential access barrier to individuals receiving services.

C. Medicaid

Medicaid, a means-tested entitlement program for low-income individuals, is financed jointly by the Federal government and the states. Each state generally sets its own eligibility requirements, usually based on a combination of income, assets, and categorical aid status. The most common categories of enrollees are low-income children, pregnant women, the elderly, disabled persons, and parents meeting specific income thresholds.

Since Medicaid focuses on enrolling individuals in poverty or with disabilities, the program is particularly important for adults with serious mental illnesses and children with severe emotional disorders. Medicaid accounts for nearly 20 percent of all spending on mental health services in the United States (Mark et al., 2000).

In June 1999, approximately 56 percent of the national Medicaid population were enrolled in some managed care arrangement (Health Care Financing Administration, 1999b). Managed care arrangements ranged from HMOs with prepaid capitated contracts to loosely structured networks of providers that use gatekeeping to control utilization. In states with Medicaid managed care, mental health services can be carved out of the managed care contract so that they remain in the fee-for-service setting; are included under the managed care contract; or are provided under a behavioral health managed care plan separate from their physical health managed care plan.

Medicaid benefit packages cover a large array of services. The Federal government mandates that all states must cover a core benefit package, including inpatient and outpatient hospital services, physician services, laboratory and x-ray services, nursing home and home health care services, and early and periodic screening, diagnosis, and treatment (EPSDT) for children under age 21. States also may receive the Federal match by covering optional services, such as mental health care, prescription drugs, and speech and occupational therapy.

Under EPSDT, children under 21 years of age are supposed to receive a periodic comprehensive health and developmental assessment that includes both physical and mental health assessments (Centers for Medicare and Medicaid Services, 2002b). Should a mental or physical problem be identified, the state is required to provide all medically necessary care to "correct and ameliorate" that problem, "even if the service is not available under the State's Medicaid plan to the rest of the Medicaid population" (Centers for Medicare and Medicaid Services, 2002b). Even though this provision technically entitles Medicaid-enrolled children to all medically necessary care for a mental health condition, EPSDT requirements are not well understood, and there is much variation in the level of state adherence to such requirements. For this reason, the U.S. General Accounting Office (2001) has reported that many eligible children are not receiving EPSDT services.

Although Medicaid is supposed to provide for all medically necessary mental health care for children, care for adults can be more restrictive. The most commonly noted restriction on adult mental health services under Medicaid is the Federal Institution of Mental Diseases (IMD) exclusion for adults 22 to 64 years of age. An IMD is defined by Federal law as "a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services" (Health Care Financing Administration, 1992). The definition includes all state, county, and private psychiatric hospitals. Under the IMD exclusion, an adult treated in an IMD is not eligible for the Federal Medicaid match. Consequently, states generally exclude from their benefit package inpatient psychiatric care for adults admitted to psychiatric hospitals. Short-term psychiatric care at general hospitals with a psychiatric unit can, however, be covered. States may elect to cover IMD services for individuals aged 65 years and older as an optional service.

Eight states-Arizona, Delaware, Maryland, Massachusetts, Oregon, Rhode Island, Tennessee, and Vermont-have received partial waivers from the Medicaid IMD exclusion for persons 22 to 64 years of age through 1115(b) Medicaid managed care waivers (Kuo and Draper, 2002). Under the waivers, the eight states can receive Federal Medicaid money for 22- to 64-year-old patients, although Federal reimbursement usually is limited to 30 days per episode and 60 days per year, and may be restricted to certain hospitals.¹⁰

D. State Children's Health Insurance Program (SCHIP)

In 1997, Congress enacted the State Children's Health Insurance Program (SCHIP) to expand health insurance coverage for children. As originally conceived, SCHIP provided states with Federal matching funds to insure uninsured, low-income children not eligible for Medicaid by expanding their Medicaid program (called M-SCHIP), designing a separate child health program (S-SCHIP), or combining the two approaches. As with Medicaid, income eligibility levels for SCHIP vary according to state. In Federal fiscal year 1999, nearly two million children nationwide received health insurance through the SCHIP program at some point during that year (Centers for Medicare and Medicaid Services, 2000b).¹¹

States choosing to expand their Medicaid programs to cover all or a portion of their SCHIP populations through an M-SCHIP program must provide the full Medicaid benefit package (Center for Mental Health Services, 2000). For states that choose to implement a separate child health program (S-SCHIP), their benefit package must be comparable to one of four benchmark plans: the Federal Employees Health Benefits Program (FEHBP) standard option plan; the state's employee health benefit plan; the HMO with the largest commercially enrolled population in the state; or another package approved by the Federal government.

Specific to mental health benefits, the S-SCHIP program must include coverage that is at least 75 percent of the actuarial value of those of the selected benchmark plan (Center for Mental Health Services, 2000). Since many private insurance plans include limits on outpatient visits and/or inpatient days, the benefit packages under S-SCHIP can be much less generous than the benefit under Medicaid (National Conference of State Legislatures, 2001). In 2000, 10 of the 33 states with S-SCHIP programs had no limits on either outpatient or inpatient mental health benefits (see Appendix D).

E. Federal Employees Health Benefits Program (FEHBP)

FEHBP is the health insurance program for employees of the Federal government. Before 2001, health plans participating in FEHBP were required to offer a minimum mental health benefit of 50 percent of the cost of 30 inpatient mental health days and 20 outpatient mental health visits (Office of Personnel Management, 2001). In addition, per the MHPA, health plans were not allowed to impose separate annual or lifetime dollar limits on mental health care.

Beginning in 2001, the FEHBP required full mental health parity for all participating health plans. Under FEHBP's current full parity requirements, health plan coverage of mental illness must have parity in utilization limits and cost sharing as applicable to medical, surgical, and hospital providers. The parity requirements cover all mental illnesses listed in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition (DSM-IV) (Office of Personnel Management, 2000).

The Office of Personnel Management, the agency that oversees FEHBP, encourages health plans to manage mental health care utilization, including the use of managed behavioral health care organizations. Other permitted utilization management tools include prior authorization, directing an enrollee to a specific provider, and requiring that a treatment plan authorized by the health plan be followed.

F. TRICARE

TRICARE is the health system operated by the U.S. Department of Defense for active-duty members of the armed forces and their dependents, military retirees and their dependents, and surviving spouses of deceased active-duty or retired military service members. The TRICARE program includes three options: an HMO option (TRICARE Prime), a preferred provider organization (PPO) option (TRICARE Extra), and a fee-for-service option (TRICARE Standard, formerly CHAMPUS).

The three programs differ by provider structure, but they all provide the same mental health benefits. Authorization is required for outpatient psychotherapy that involves more than two sessions per week and/or eight sessions per year. Inpatient hospitalization for adults is covered for up to 30 days per year, inpatient hospitalization for children is covered for up to 45 days, and treatment in a residential treatment facility is covered for up to 150 days (TRICARE, 2000). With the approval of the TRICARE contractor, TRICARE enrollees can receive waivers for treatment that extends beyond these limits. Depending on both the TRICARE enrollee's eligibility status (e.g., whether an individual is a military retiree or active-duty family member) and the specific TRICARE plan (TRICARE Prime, Extra, or Standard), cost sharing for mental health services also can be higher than for other health care core services.

G. Veterans Affairs

The Department of Veterans Affairs (VA) provides care to eligible veterans, generally at VA hospitals. Enrollment and eligibility for care are based on seven priority groups in accordance with the veteran's health status and financial circumstances. Veterans with service-connected disabilities of 50 percent or more receive the highest priority; veterans without a disability, whose annual income and net worth are above the established limits, receive the lowest priority.

The VA provides unlimited inpatient and outpatient mental health and prescription drugs (Department of Veterans Affairs, 2002). Cost sharing for care received through the VA is a product of an individual's priority level (Department of Veterans Affairs, 2002). Care related to a disability resulting from military service is available without charge to all veterans. For care unrelated to a service-connected disability, inpatient mental health care involves the same cost-sharing requirements as other inpatient hospital care. Outpatient mental health visits are billed at the specialty care rate for all medical specialties. Since the VA does not limit mental health care separately from other health benefits and the cost-sharing requirements are the same, the VA meets the definition of mental health parity.

H. Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)

The Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) is the federally administered health benefits program for dependents and survivors of veterans who have a total and permanent disability or who died from a disability incurred or aggravated during active-duty military service. CHAMPVA is a fee-for-service plan with a deductible ($50 per person or $100 per family) and 25 percent co-insurance. Unlike those receiving care through the VA, CHAMPVA enrollees may receive care from any provider. If an enrollee has other health insurance, CHAMPVA acts as a second payor covering the lesser of 75 percent of the Medicare-allowed amount or the balance of the charges (Department of Veterans Affairs, 2001a).

CHAMPVA requires prior authorization for inpatient mental health care and generally limits services to 30 days of care per fiscal year for adults and 45 days per year for children 18 years and younger. Beneficiaries may be able to obtain a waiver of the day limits if they meet certain conditions. Psychotherapy during an inpatient hospital stay is limited to five sessions per week. Under its outpatient mental health benefit, prior authorization is required for more than 23 psychotherapy sessions per fiscal year. Prior authorization also is required from the CHAMPVA mental health contractor for visits beyond these limits. CHAMPVA covers partial hospitalization up to 60 days per fiscal year (Department of Veterans Affairs, 2001b).

I. Indian Health Service (IHS)

Through health facilities located on or near Indian reservations, the Indian Health Service (IHS) provides health care to American Indians and Alaska Natives who are members of federally recognized tribes. American Indians and Alaska Natives may receive services at IHS facilities if they live in geographic areas where facilities are located. All facilities provide preventive and health promotion services; medical care and treatment services are provided, as available, at IHS facilities or on a contractual basis from the private sector through Contract Health Services (CHS). IHS is considered a payor of last resort. In other words, any care provided to IHS-eligible individuals who also are eligible for Medicare, Medicaid, or any other third-party reimbursement at an IHS facility must be reimbursed first by the other payor.

The IHS Mental Health and Social Services program, a community-oriented clinical and preventive services program, offers mental health services (Indian Health Service, 2002), with most individual mental health services provided on an outpatient basis. IHS facilities in tribal locations offer virtually no partial hospitalization, transitional living, or child residential services. Inpatient mental health services are provided under contract at local general, private psychiatric, and state psychiatric hospitals.

J. Individually Purchased Insurance

Those without access to health insurance in the group market may elect to purchase insurance in the individual market. A wide variety of individuals, including early retirees without retiree benefits, the self-employed, those whose employers do not offer health insurance, and those who have exhausted their continued group coverage allowable through the Consolidated Omnibus Budget Reconciliation Act (COBRA), hold individual health insurance policies. Persons 60 to 64 years of age are nearly three times as likely to be covered by individual health insurance as those 20 to 29 years of age (U.S. Government Accounting Office, 1996).

In contrast to the group health insurance market, most states allow companies selling individual health insurance policies to accept or deny an applicant based on the individual's health status, including his/her mental health status. Applicants often are required to provide a medical history and may be required to undergo a medical examination (Gabel, 2002). Only 11 states require all insurers in the individual market to accept all applicants regardless of health status (U.S. Government Accounting Office, 2002).¹²

For persons with a history of mental illness, the purchase of comprehensive mental health coverage in the individual market can be difficult and/or expensive. According to most insurers, a history or the current treatment of a mental illness qualifies an individual as high-risk (U.S. Government Accounting Office, 2002). Even if an individual with mental illness is offered a policy, the policy likely will include higher premiums and/or benefit restrictions beyond those offered in a standard individual policy.

Although data limitations preclude this report from including an estimate of the extent or generosity of mental health benefits in the individual market, Gabel et al. (2002) reviewed 103 individual insurance products in 10 states and found that 63 percent included inpatient mental health coverage, and 48 percent included outpatient mental health coverage. The rates and extent of mental health coverage varied according to whether the product was an indemnity, HMO, or preferred provider/point-of-service plan. For plans that include mental health benefits, restrictions and limitations are common. Individuals obtaining mental health services under such plans generally face higher co-payments and co-insurance (sometimes up to 50 percent) (Chollet and Kirk, 1998). Separate annual and/or lifetime dollar limits for mental health services below those of the plan's overall limit also are common since the MHPA never applied to individually purchased policies. Pollitz et al. (2001) found that lifetime limits on mental health coverage usually average $10,000, while overall plan limits can range from $1 million to $6 million. In addition to, or in place of lifetime caps on mental health benefits, individual plans may impose annual limits; annual benefit limits of $3,500 or less are common (Pollitz et al., 2001).

VIII. Appendix B: Methods

This appendix summarizes the methods used by the study team to estimate the proportion of the U.S. population with mental health insurance in 1999. Estimates of the number of individuals with health insurance by primary source of health coverage are derived from the March 2000 Current Population Survey (CPS).

Estimates of the proportion of those with health insurance who have mental health benefits are based on the 1999 Medical Expenditure Panel Survey-Insurance Component (MEPS-IC). Estimates of the generosity of benefits are based on the 1999 Mercer Worldwide Survey of Employer-Sponsored Health Plans. Section A describes each data source. Section B presents the methods used to estimate the major results of this report.

A. Data Sources

1. Current Population Survey
The CPS is a monthly survey conducted by the Bureau of the Census, and is the official source of government statistics on unemployment and employment. Each month, demographic and employment data are obtained from approximately 47,000 noninstitutionalized households selected to represent the U.S. population. In March of each year, the CPS collects additional data on work experience, income, and employer-sponsored benefits, such as health insurance. The interviewer lists types of health insurance (employer-based, privately purchased, Medicare, Medicaid, military health care, or other), and the respondent indicates whether he or she was ever covered by that type of insurance in the previous year (for example, 1999 for the March 2000 survey). The respondent also lists the source of insurance coverage for other individuals in the household.

Because of the CPS's large sample size and the focus on timeliness in releasing the data, researchers who are examining current sources of health insurance coverage for the U.S. population frequently use the March CPS. The CPS variables used for this study are:

• Source of health insurance coverage
• Demographic characteristics: age, income level, ethnicity, location of residence
• Characteristics of employer: size of firm, type of industry, type of occupation (private sector, state, local, or Federal government)

2. Medical Expenditure Panel Survey-Insurance Component (MEPS-IC)
The 1999 MEPS-IC was a survey of a probability sample of slightly more than 20,000 U.S. employers. The Agency for Healthcare Research and Quality (AHRQ) and the National Center for Health Statistics (NCHS), both part of the U.S. Department of Health and Human Services (DHHS), cosponsored the survey. The MEPS-IC collected data on the number and types of health insurance plans offered, the benefits associated with these plans, premiums, contributions by employers, and employer characteristics. The sample of private employers was selected from the Bureau of the Census's Standard Statistical Establishment List. The sample included Federal, state, and local governments. Local government employers were selected from the Census of Governments.

The survey response rate was 66.1 percent, and a total of 20,003 private employers from the list sample completed the questionnaire in 1996.¹³ In that year, 2,224 state and local government employers responded to the survey (84.6 percent response rate).¹⁴ Because of the sample size limitation, statistically valid data are available by state for only the 37 most populous states. MEPS-IC variables used in this study are:

• Establishment size
• Firm size
• Whether the firm offered health insurance
• Whether the firm offered coverage for outpatient mental health services
• Whether the firm offered coverage for inpatient mental health services
• Whether the firm was self-insured
• Whether retirees were eligible to receive hospital/physician coverage
• How many employees were eligible for health insurance at the establishment surveyed
• How many employees were enrolled in health insurance at the establishment surveyed
• Number of employees with single or family coverage

3. Mercer Worldwide National Survey of Employer-Sponsored Health Plans
The accounting and benefits consulting firm Mercer Worldwide conducts an annual survey of a nationally representative sample of private employers with 10 or more employees who offer health insurance. In 1999, 2,737 employers responded to the survey, including state and local governments. Private employers were selected into a probability sample from the list of firms¹⁵ with 10 or more employees, which is maintained by Dun & Bradstreet. The response rate was 52 percent.

Information was collected on the types of health services covered, the generosity of benefits, and the cost of benefits by plan type-health maintenance organization (HMO), preferred provider organization (PPO), and fee-for-service (FFS) plan. The variables used in this study include:

• Whether the plan covered inpatient and outpatient mental health care
• Annual and lifetime limits on outpatient mental health visits
• Annual and lifetime limits on inpatient mental health days
• Copayment, co-insurance, and deductible for mental health care
• Annual and lifetime dollar limits

B. Methods

The data sources for the study included the March 2000 Current Population Survey (CPS), the 1999 Medical Expenditure Survey-Insurance Component (MEPS-IC), and the Mercer Worldwide National Survey of Employer-Sponsored Health Plans. Each survey uses a nationally representative probability sample, with 1999 serving as the reference period for each survey. The CPS contains data from a sample of approximately 47,000 households on their health insurance coverage. The MEPS-IC contains data from a sample of approximately 20,000 public and private employers about the health insurance benefits they provide to their employees. The National Survey of Employer-Sponsored Health Plans is sponsored by Mercer Worldwide and contains data from a sample of approximately 2,700 private employers regarding the detailed provisions of their health insurance plans.

The unit of analysis in this study is the individual (the policyholder, as well as his or her covered family members). Given that the CPS is the only one of the three databases used for this study that contains data on individuals, it served as the host database. The other two databases were used to impute values to the CPS that are not provided by that database. Imputed information includes greater detail on firm size and health plan provisions than what is available in the CPS.

Estimating the number of individuals who have mental health insurance benefits is a three-step process. In the first step, the number of individuals covered by each source of health (as opposed to mental health) insurance is estimated. In the second step, the proportion of individuals with each type of health insurance who are covered by mental health insurance is estimated. In the third step, the estimates from the first and second steps are multiplied together to yield an estimate of the number of individuals with mental health insurance.

1. Proportion of Individuals With Health Insurance
The CPS asks whether an individual had coverage at any time during the previous year, as well as what the source or sources of that coverage were. Respondents were allowed to list more than one category of coverage. For example, an individual may have been unemployed and covered by Medicaid during part of 1999 and then obtained employment that provided employer-sponsored health insurance for the remainder of the year. The survey does not record the specific period in the past year during which each source of insurance provided coverage.

An estimated 15 percent of individuals list more than one source of health insurance. The primary source of health insurance for these individuals was assigned according to the following hierarchy:

1. Medicare-The Federal health plan primarily serving individuals aged 65 years and older
2. Medicaid-The Federal-state health plan for low-income individuals
3. Federal Employee Health Benefits Plan (FEHBP)-The Federal health plan serving civilian Federal employees and their dependents
4. State employer-sponsored insurance-Health plans serving state employees and their dependents
5. Private employer-sponsored insurance-Health plans sponsored by private employers. These health plans do not include any government-sponsored employee health plans
6. TRICARE-The health plan for members of the armed forces and their dependents, sponsored by the U.S. Department of Defense
7. CHAMPVA-Health services provided to veterans and their dependents
8. Individually purchased-Health insurance purchased by individuals who are not required to become a member of a group plan
9. Indian Health System-Health services provided to Native Americans on tribal reservations
10. Uninsured-Individuals who have no health insurance

For example, an individual reporting TRICARE, as well as private employer-sponsored health insurance, would be assigned to private insurance because the latter is higher on the list.

The 1999 CPS did not separate individuals who were insured through the Medicaid program and SCHIP. Because the mental health benefits available to individuals enrolled in a separate SCHIP program (S-SCHIP) can be different from those available in the Medicaid program, it is useful to separate the two insurance sources. To do so, CMS administrative data on the number of individuals enrolled in state SCHIP programs (separated by M-SCHIP and S-SCHIP programs) were used. These numbers were then subtracted from the CPS estimate of the number of children receiving Medicaid to create mutually exclusive categories.¹⁶

2. Covered Lives With Mental Health Benefits
The next step is to estimate the percentage of those who have health insurance (covered lives) with inpatient mental health benefits and those who have health insurance with outpatient mental health benefits. MEPS-IC data was the source used to derive these estimates for employer-sponsored health insurance. For public health insurance programs, the programs' published statements of services covered were used. The firm was the unit responding to the MEPS-IC survey. The number of covered lives was estimated by weighting each firm according to the number of lives covered by the firm.

MEPS-IC data were used to estimate the number of covered lives with inpatient mental health benefits in each cell of a two-by-five matrix, defined by whether the firm was self-insured or purchased health insurance, and according to five categories of firm size (1-9, 10-49, 50-499, 500-999, and 1,000 or more employees). MEPS-IC also was used to estimate the number of covered lives in each of these 10 cells. Table II.2 in Chapter II reports the ratio of covered lives with inpatient mental health insurance to total covered lives as the proportion with inpatient mental health insurance.

Using the CPS as the host database, figures from the MEPS-IC were adjusted for consistency with CPS estimates. Each cell in the MEPS-IC matrix of covered lives with inpatient mental health insurance was multiplied by a ratio adjustment factor. The numerator of the factor was the CPS estimate of the number of individuals with private employer-sponsored health insurance, and the denominator was the MEPS-IC estimate of covered lives. The denominator is the analogous MEPS-IC figure. The adjustment factor is computed separately for each firm size category (1-9, 10-49, 50-499, 500-999, and 1,000 or more) since firm size is recorded in both the CPS and MEPS-IC. Table II.2 reports the resulting estimates of the number of individuals with inpatient mental health insurance.

The procedure is repeated for outpatient mental health insurance.

3. Population With Mental Health Benefits
The number of individuals with mental health benefits was computed by multiplying the number of individuals with health insurance (Section 1 above) by the proportion of those with health insurance who have mental health benefits (Section 2 above). State-level information on the percentage of firms that cover mental health benefits as part of their benefit package is available for only 37 states as a consequence of sample size restrictions in the MEPS-IC. Therefore, state-level estimates of mental health insurance (see Table II.4) are presented only for these 37 states.

4. Generosity of Mental Health Benefits
In this study, four basic levels of generosity were established: mental health benefits at full parity (cost sharing, utilization limits, and dollar limits are the same as medical/surgical benefits); mental health benefits that meet the benchmark benefit of coverage (30 inpatient days, 20 outpatient visits, and prescription drug coverage); mental health benefits less than the benchmark; and health insurance that does not include mental health coverage.

The benchmark mental health benefit was established in consultation with an expert advisory panel to reflect current trends in the employer-sponsored health insurance market and is not intended to stand as a measure of adequacy. Data from the Mercer Worldwide Survey of Employer-Sponsored Health Insurance Plans indicated that 30 inpatient days and 20 outpatient visits was where the biggest breaks occurred in utilization limits for plans with mental health insurance coverage (see Figures B.1 and B.2). Additionally, in 1999, FEHBP required all contracting health plans to cover a minimum 30 inpatient mental health days and 20 outpatient mental health visits.

Prescription drug coverage was included in the benchmark benefit package because such drugs are now considered a primary form of treatment for nearly all mental illnesses. In 1997, prescription drugs accounted for almost 13 percent of total mental health spending (Mark 2000). Prescription drug coverage also is considered "standard" in the employer-sponsored health insurance market (Kaiser Family Foundation et al., 2000).

The 1999 Mercer Worldwide survey of employer-sponsored health plans was the main source of information used to assess both the generosity of mental health coverage offered by employers and the limits placed on that coverage. A total of 2,737 randomly selected employers with at least 10 employees responded to the survey in 1999 (the sample was stratified across eight size categories).

Through the Substance Abuse and Mental Health Services Administration (SAMHSA), Mercer Worldwide provided estimates of the number of firms with mental health insurance coverage and no special utilization limits on benefits for mental health services. Mercer also provided estimates of the proportion of individuals whose mental health benefits were at least as generous as the benchmark level of mental health benefits. It was assumed that all firms with no special limits met the benchmark benefit.

We estimated the number of individuals who had mental health benefits at least as generous as the benchmark by multiplying the proportions provided by Mercer by the estimated number of individuals who had mental health insurance benefits from Section 3, above. Because the rates of outpatient mental health and inpatient mental health benefits were nearly identical, it was assumed that all individuals with inpatient mental health benefits also had outpatient mental health benefits.

It is important to note that the Mercer survey does not sample entities employing fewer than 10 people. Therefore, it was not possible to produce estimates for those with insurance provided through very small firms.

5. Mental Health Parity
Data from the National Conference of State Legislatures (2001) and the National Alliance for the Mentally Ill (2002) indicate that 24 states had full mental health parity laws, as of 2002. Yet, state parity laws provide for a number of exemptions. Under ERISA, states may not regulate self-insured employee benefit plans; thus, individuals covered by such plans are not subject to state parity laws. In addition, some state laws include an exemption for small employers.

To estimate the number of individuals who had employer-sponsored health insurance subject to state mental health parity laws required comparing estimates of the number of individuals who had health insurance through employer-sponsored self-insured plans with the number of individuals in plans who purchased insurance. These estimates were calculated from CPS and MEPS-IC data, as described in Section 2 above. Detailed state-by-state data tables on private employer-sponsored health insurance by firm size and self-insured status are available from the authors at Mathematica Policy Research, Inc., upon request. Those in firms that self-insured or that had fewer than 50 employees in states whose parity law had a small-firm exemption, and retirees covered by employer-sponsored plans were subtracted from the population of individuals with employer-sponsored insurance.

Due to data limitations, the following adjustments were made:

• The MEPS-IC sample supports reliable figures for 37 states. Figures are not available for 13 states (Alaska, Arkansas, Delaware, Idaho, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Utah, West Virginia, and Wyoming) and the District of Columbia. For these states, we applied the national percentages of self-insured firms for firms with fewer than 50 employees and firms with 50 or more employees.
• Since the available data made it necessary to define small firms as those having 50 or fewer employees, the number of individuals covered by the parity laws in states whose small-firm exemption uses a firm size of fewer than 50 employees - Hawaii, Maine, and Virginia - is underestimated. Our estimates excluded all individuals in employer-sponsored plans that purchased insurance in firms that had fewer than 50 employees.
• The MEPS-IC and CPS data represent 1999. Our projections to 2002 are produced by applying 2002 state laws to population estimates for 1999.

Figure B.1. Maximum Number of Outpatient Visits Per Year for Firms With Limits on Mental Health Coverage

Figure B.2. Maximum Number of Inpatient Days Per Year for Firms With Limits on Mental Health Coverage

IX. Appendix C: Expert Advisory Panel

John Czajka
Mathematica Policy Research, Inc.

Richard Frank
Harvard University

Paul Fronstin
Employee Benefit Research Institute (EBRI)

Chris Koyanagi
Bazelon Center for Mental Health Law

Katharine R. Levit
Office of the Actuary, Centers for Medicare and Medicaid Services

Tami Mark
MEDSTAT

Margo Rosenbach
Mathematica Policy Research, Inc.

Roland Sturm
RAND

Sam Zuvekas
Agency for Healthcare Research and Quality

SAMHSA Participants
Jeff Buck
Judith Teich

X. Appendix D: Mental Health Benefits in Non-Medicaid S-SCHIP Plans, 2000

Table D.1. Mental Health Benefits in Non-Medicaid S-SCHIP Plans, 2000

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Endnotes:

1. In 1999, the Part A deductible was $768 per benefit period.

2. Medicare defines a benefit period as a spell of illness that ends after a beneficiary does not receive care in a hospital or skilled nursing facility for 60 days.

3. In 1999, the co-payments for hospital stays were $192 for days 61 through 90 and $384 for days 91 through 150.

4. The co-payment for the lifetime reserve days in 1999 was $384 per day.

5. The program has declined substantially since 1999 in terms of enrollment and the comprehensiveness and affordability of benefits; however, many M+C enrollees can still obtain mental health coverage through their HMO that is more affordable and comprehensive than that in fee-for-service Medicare. In 2002, M+C enrollment is just over 5 million, or approximately 14 percent of the total Medicare population (Centers for Medicare and Medicaid Services, 2002a).

6. Because of the tighter budgets of Medicare+Choice plans since 1999, only 71 percent of M+C enrollees have any prescription drug coverage in 2002 (Achman and Gold, 2002). Many plans that continue to cover prescription drugs limit that coverage by excluding brand-name drugs or imposing a particularly low annual dollar limit on brand-name drugs, sometimes under $500.

7. Plans H and I have an annual deductible of $250 and cover 50 percent of drug costs up to $1,250 per year. Plan J also has an annual deductible of $250 but pays 50 percent of drug costs up to $3,000 per year (Health Care Financing Administration, 2001b).

8. California, Connecticut, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Texas, and Wisconsin (Health Care Financing Administration, 2001b).

9. The remaining individuals, presumably, do not qualify for full Medicaid benefits.

10. Rhode Island’s waiver has no limits on days and applies only to one private psychiatric hospital. Maryland’s waiver applies only to private psychiatric hospitals. Oregon’s waiver applies to only one private facility (Kuo and Draper 2002).

11. Since 1999, enrollment in SCHIP has increased significantly as states have expanded their programs and enhanced outreach efforts. In FY 2001, 4.6 million children were enrolled in SCHIP nationwide at some point during the year (Centers for Medicare and Medicaid Services, 2002c). In addition, some states received waivers to begin enrolling parents in their S-SCHIP programs. In FY 2001, more than 236,000 adults were enrolled in state SCHIP programs (Centers for Medicare and Medicaid Services, 2002c).

12. Eight of the 11 states require all carriers to guarantee issue throughout the year (Idaho, Maine, Massachusetts, New Hampshire, New Jersey, New York, Ohio, and Vermont), while the other three states impose the requirement only on certain carriers or during special open-enrollment periods (Maryland, Michigan, and West Virginia). Carriers in five additional states (Hawaii, North Carolina, Pennsylvania, Rhode Island, and Virginia) and the District of Columbia voluntarily guarantee access to coverage regardless of health status. As of July 2002, New Hampshire allows insurers to deny coverage based on health status (U.S. General Accounting Office, 2002).

13. AHRQ has not yet published the response rate of the 1999 MEPS-IC survey.

14. See Construction of Weights for the 1996 Medical Expenditure Panel Survey Insurance Component List Sample, Methodology Report 8, U.S. Department of Health and Human Services, Agency for Health Care Policy and Research, November 1999.

15. The business unit listed is the one applying for a loan or a line of credit. This unit may differ from the entire corporation.

16. In 1999, only children were enrolled in SCHIP. Since that time some states have begun enrolling adults.

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