Effects of the Vermont Mental Health and Substance Abuse Parity Law

Exhibit I.1: Overview of State Mental Health/Substance Abuse Parity Laws That Exceed the Federal Parity Law, as of August 2002

  Year Law or Amendment Enacted Mandated Benefita Broad Definition of Mental Illnessb Covers Substance Abuse Prohibits Limits on Inpatient Days and Oupatient Visitsc Requires Financial Parityd Covers Small Employerse Covers Policies or Employers Regardless of Cost Increases
Total Number of States 33 30 12 14 23 27 17 25
Vermont 1997 x x x x x x x
Arkansas 1997, 2001 x x   f x x  
California 1999 x     x x x  
Colorado 1997 x     x x x x
Conneticut 1999 x x x x x x x
Deleware 1998, 2001 x   x x x x x
Georgia 1998   x x   x x x
Hawaii 1999 x     x x    
Illinois 2001 x     g x   x
Indiana 1999, 2001 h   x x x i  
Kansas 2001 x     x     x
Louisiana 1999 x x     x    
Maine 1995 j     x x   x
Maryland 1994 x x x   x x x
Massachusetts 2000 x   k x x x x
Minnesota 1995 l x x x x x x
Missouri 1999     x     x x
Montana 1999, 2001 x   x x x x x
Nebraska 1999 x     x     x
Nevada 1999 x       m    
New Hampshire 1994 x     x x x x
New Jersey 1999 x     x x x x
New Mexico 2000 x x   x x x  
North Carolina 1997 x x x x x i x
Oklahoma 1999 x     x      
Pennsylvania 1998 x       n   x
Rhode Island 1994, 2001 x x x   x x x
South Carolina 2000 x   x x x i  
South Dakota 1998 x     x   x x
Tennessee 1998 x x          
Texas 1997 o     x x   x
Virginia 1999 x   x x x   x
Federal Mental Health Parity Act 1996   p          

 

Source: Adapted from Gitterman, Daniel, Richard Scheffler, Marcia Peck, Elizabeth Ciemans, and Darcy Gruttadero. "A Decade of Mental Health Parity: The Regulation of Mental Health Insurance Parity in the United States, 1990-2000." NIMH Grant MH-18828-11. Berkeley: University of California, July 2000. Updated based on State parity legislative information from the General Accounting Office, "Mental Health Parity Act: Despite New Federal Standards, Mental Health Benefits Remain Limited," GAO/HEHS-00-95, May 2000; the National Association for the Mentally Ill (NAMI), August 2001; and the NCSL Health Policy Tracking Service "Mental Health Parity" brief, December 2001.
a A "mandated benefit" refers to State statutes that require health insurance policies to include certain benefit provisions. A typical provision states that a group health plan shall provide benefits for diagnosis and mental health treatment under the same terms and conditions as provided for physical illnesses. States that are not checked under this column have either a "mandated benefit offering" or a "mandated, if offered" provision. The "mandated benefit offering" provision requires sellers to offer certain types of mental health coverage, with the decision of whether to purchase coverage left to the buyers. Alabama, Georgia, and Missouri have "mandated benefit offering" provisions. The "mandated, if offered " provision does not require the employer or insurer to offer mental health coverage; however, if the employer offers coverage, then the coverage must comply with parity provisions. Indiana, Kentucky, and Nebraska have "mandated, if offered" provisions.
b "Broad definition of mental illness" is defined as encompassing all the disorders listed in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Health Disorders and/or the International Classification of Diseases Manual. For States that are not checked in this column, some narrow their laws' scope by requiring coverage only for "biologically based" illness or "serious mental illness," most commonly defined as schizophrenia, bipolar disorder, obsessive-compulsive disorder, major depressive disorder, panic disorder, schizo-affective disorder, and delusional disorder. Alternatively, some States - as well as the Federal Mental Health Parity Act - allow health plans to define the scope of the mental health benefit.
c States that are not checked in this column permit a disparity in the terms and conditions required for mental health coverage compared to other physical health conditions (for example, allowing a cap on the number of inpatient days and/or outpatient visits for mental health coverage that differs from that for other physical illnesses).
d States that are not checked in this column permit a disparity between the cost sharing for mental health services and physical health services.
e States that are not checked in this column exempt small employers, most commonly defined as employers with either 25 or fewer employees or 50 or fewer employees.
f Arkansas: S. 716 (2001) prohibits health plans from imposing limits on coverage for mental health treatment offered by employers with 50 or fewer employees. This law allows groups of 51 or more employees to impose an annual maximum of 8 inpatient/partial hospitalization days together with 30 outpatient days.
g Illinois: S. 1341 requires "group health benefit plans to provide coverage based upon medical necessity for the following treatment of mental illness in each calendar year: 45 days of inpatient treatment and 35 visits for outpatient treatment, including group and individual outpatient treatment, and prohibits a lifetime limit on the number of inpatient treatment days and outpatient visits covered by the plan. Plans must include the same amount limits, deductibles, copayments, and coinsurance factors for serious mental illness as for physical illness."
h Indiana: Statute specifies a "mandated benefit" for State employee plans and a "mandated offering" for group and individual plans.
i Indiana, North Carolina, and South Carolina: The parity statute applies to health plans offered to State employees.
j Maine: The statute mandates coverage for group plans and requires a mandated offering for individual policies.
k Massachusetts: Parity for substance abuse applies only in cases of co-occurring mental illness and substance abuse disorders.
l Minnesota: The statute mandates coverage for health maintenance organizations (HMOs) and "mandated, if offered" for individual and group plans.
m Nevada: Annual and lifetime dollar limits must be equal to other illnesses; cost sharing for copayments and coinsurance must not be more than 150 percent of out-of-pocket expenses for medical and surgical benefits.
n Pennsylvania: Statute requires parity in annual and lifetime dollar limits but only specifies that cost sharing "must not prohibit access to care."
o Texas: Statute requires "mandated benefits" for group and HMO plans and a "mandated offering" for groups of 50 or fewer.
p The Federal Mental Health Parity Act allows health plans to define the covered illnesses.

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