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National Estimates of Mental Health Insurance BenefitsExecutive SummaryThis study provides estimates of the number of individuals in the United States in 1999 who had mental health benefits as a part of their health insurance coverage, the subset of those individuals who had mental health benefits that met or exceeded a benchmark level of generosity, the number of individuals with parity in their mental health benefits, and the number of individuals potentially subject to state and Federal mental health parity laws. Mental health benefits are assessed in terms of the types of services covered (inpatient care, outpatient care, and prescription drugs), dollar limits (annual expenditures and lifetime expenditures), utilization limits (number of days of inpatient care and number of outpatient visits), and cost sharing (deductibles, co-insurance, and co-payments). The benchmark level of generosity is defined in this report in terms of the types of services covered (inpatient and outpatient care and prescription drug coverage) and utilization limits (20 inpatient days and 30 outpatient visits). Full mental health parity is defined as mental health benefits with the same covered services, dollar limits, utilization limits, and cost sharing as the plan's medical/surgical benefits. Mental Health Insurance Coverage
Generosity of Coverage of Mental Health Benefits
Parity in Mental Health Benefits
I. IntroductionMore than one in five Americans has a diagnosable mental disorder some time in his or her lifetime, yet only about half of those individuals receive professional mental health treatment (U.S. Department of Health and Human Services, 1999). One major determinant of an individual's access to mental health care is whether he or she has health insurance that includes mental health benefits. Research over the past decade (reviewed in Appendix A) has found that although most individuals in the United States had health insurance, and most with health insurance had mental health benefits, most mental health benefits were substantially less generous than the medical/surgical benefits provided by the same plans. Public concern over unequal treatment led to passage of the Mental Health Parity Act of 1996 (MHPA) (42 USC § 300gg-5), which required employers with 50 or more employees that were providing mental health benefits to apply the same dollar limits to mental health benefits as they did to their medical/surgical benefits. Although the MHPA technically tted" in September 2001, subsequent laws have extended the original statute's provisions through the end of 2003. Considerable attention has been paid to the issue of parity as a way to improve mental health insurance coverage, but relatively little is known about the extent of current levels of coverage and about generosity of benefits. Even if current efforts to create parity mandates prove successful, little is known about the potential impact of these mandates on the number of people who would be affected. To broaden the current understandin sunseg of these issues, the study documented in this report addresses the following questions: How many people in the United States have mental health benefits as a part of their health insurance? How generous are the mental health benefits for those who have them? What limits are placed on mental health benefits, and how prevalent are those limits? How do the limits vary by source of insurance? What proportion of the population falls under the jurisdiction of Federal and state parity laws? Chapter II of this report presents estimates of the number of individuals covered by each source of mental health insurance coverage; Chapter III examines mental health benefit generosity by reporting the number of individuals with mental health benefits at a benchmark standard; and Chapter IV presents the number of individuals subject to Federal and state parity laws. Chapter V highlights the principal findings of the study. The main text is supplemented with several appendices. Appendix A presents details regarding each source of mental health insurance. Appendix B presents the methods used to produce the estimates presented in Chapters II, III, and IV. Appendix C lists the members of the expert panel who provided guidance throughout this study. Appendix D presents the limits for mental health benefits in the 33 separate State Children's Health Insurance Programs (S-SCHIP). Detailed state-by-state data tables on 1) health insurance by primary source and on 2) private employer-sponsored health insurance by firm size and self-insured status are available from the authors at Mathematica Policy Research, Inc., upon request. The data sources for the analysis include 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 as the reference period. The CPS is sponsored by the U.S. Bureau of the Census and contains data from a sample of approximately 47,000 households concerning their health insurance coverage. The MEPS-IC is sponsored by the U.S. Department of Health and Human Services (DHHS) Agency for Healthcare Research and Quality (AHRQ), and contains data from a sample of approximately 20,000 public and private employers concerning the health insurance benefits they provide to their employees. The National Survey of Employer-Sponsored Health Plans, sponsored by Mercer Worldwide, contains data from a sample of approximately 2,700 private employers regarding detailed provisions of their health insurance plans. The unit of analysis in this study is the individual (policyholders and covered family members). Since the CPS is the only one of the three databases that contains individualized information, it was used as the primary database. The other two databases were used to impute values not otherwise provided by the CPS. Imputed information includes greater detail on firm size and the provisions of the health plan than is available in the CPS. As in most studies, the results presented are based on several key assumptions. First, in cases where persons reported more than one source of health insurance in the CPS, individuals are categorized in one health insurance group according to a hierarchy of insurance sources (Appendix B provides a more detailed discussion of the hierarchy). Second, because the CPS does not record Medicaid and State Children's Health Insurance Programs (SCHIP) enrollment separately, enrollment in SCHIP was estimated from administrative data, and Medicaid enrollment was estimated as the residual. Gaps in data were estimated by imputing the following:
A complete description of the data sources and a technical discussion of the imputation methods used in the study can be found in Appendix B. II. Mental Health Insurance CoverageThis chapter presents estimates of the number of individuals who had mental health insurance benefits in 1999. Section A briefly describes sources of health and mental health insurance coverage. Section B estimates the number of individuals with health insurance by primary source of coverage. Section C estimates the percentage of individuals with mental health insurance among those with health insurance by source of coverage. Finally, Section D estimates the proportion of the total U.S. population with mental health benefits and includes state estimates of mental health coverage. A. Sources of Health and Mental Health Insurance The following is a brief description of the major sources of mental health insurance in the United States. These are listed in order, based on the number of individuals covered by each source. A more extensive discussion of these insurance sources can be found in Appendix A. 1. Employer-Sponsored Plans Rather than contracting with health insurers, many employers-particularly large firms-have implemented self-funded plans that pay physicians and hospitals directly. The provisions of the Employee Retirement Income Security Act (ERISA) of 1974 exempt most self-funded plans from state mandates that require parity in coverage for mental health services and other health care. In a 1997 survey of employer-sponsored behavioral health benefits (Buck et al., 1999), employers indicated that only about 15 percent of their "most prevalent" plans (i.e., those with the largest enrollment) were self-funded. The survey found that the larger the number of employees, the greater the likelihood that the firm had a self-funded plan. 2. Medicare
3. Medicaid 4. State Children's Health Insurance Program (SCHIP) M-SCHIP must provide the full Medicaid benefit package that the individual state provides. S-SCHIP must be comparable to one of the following benchmark plans: the Federal Employees Health Benefits standard option plan; the specific state's employee health benefit plan; the health maintenance organization (HMO) with the largest commercially enrolled population in the individual state; or another package approved by the Federal government. 5. Federal Employees Health Benefits Program (FEHBP) 6. TRICARE 7. Veterans Affairs 8. Civilian Health and Medical Program of the Department of
Veterans Affairs (CHAMPVA) 9. Indian Health Service (IHS) 10. Individually Purchased Insurance Unlike 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 their mental health. Applicants often are required to provide a medical history and may have to undergo a medical examination (Gabel, 2002). Only 11 states require every insurer in the individual market to accept all applicants, regardless of health status (U.S. General Accounting Office, 2002, February). B. Covered Lives With Health Insurance Estimating the number of individuals with mental health insurance benefits is a three-step process. First, the number of individuals covered by each source of health (as opposed to mental health) insurance is estimated. Next, the proportion of individuals with each type of health insurance who have mental health benefits is estimated. Finally, the figures from the first and second steps are multiplied together to yield an estimate of the number of individuals with mental health insurance benefits. Table II.1 presents the number and percentage of the U.S. population, by age group, reporting health insurance by their primary source of insurance in 1999. The figures are taken primarily from the Current Population Survey (CPS). However, the CPS combines SCHIP with Medicaid. (Detailed state-by-state data tables on 1) health insurance by primary source and on 2) private employer-sponsored health insurance by firm size and self-insured status are available from the authors at Mathematica Policy Research, Inc., upon request). The estimates of individuals covered by SCHIP programs were derived from Centers for Medicare and Medicaid Services administrative data (Centers for Medicare and Medicaid Services, 2000b). Slightly more than 15 percent, or 42 million individuals, had no health insurance coverage in 1999. By far, the most common source of health insurance was private employer-sponsored insurance, covering more than 45 percent of the U.S. population, or 125 million individuals. Medicare, the Federal program designed primarily to provide health insurance to those aged 65 years and older, was the largest public source of health care insurance, covering 13 percent of the population, or 36 million individuals. The Medicare figures include Part A, covering hospital costs, and Part B, covering physician costs. Nearly all individuals aged 65 years and older reported Medicare as their primary source of health insurance. The two Federal-state programs providing health insurance to low-income families-Medicaid and SCHIP-together covered more than 8 percent of the population, or 23 million individuals. Children constituted the majority of individuals for whom Medicaid was the primary source of health insurance. State and local government employee health plans covered nearly as many individuals as Medicaid and SCHIP combined-22 million. Less common sources of health insurance include:
Figure II.1 presents the primary source of health insurance coverage for individuals, by age, in 1999. In these figures, the category "other public" includes individuals enrolled in the FEHBP, state/local government employee plans, TRICARE, CHAMPVA, VA, and IHS. The Medicaid group also includes SCHIP enrollees. Table II.1. U.S. Population by Primary Source of Health Insurance, 1999
Figure II.1. Primary Source of Health Insurance Coverage in U.S., by Age, 1999 Source: 2000 Current Population Survey. Note: "Other Public" includes Federal Employee Health Benefit Plan, state/local government employee plans, TRICARE, CHAMPVA, VA, and IHS. "Medicaid" includes SCHIP enrollees. C. Mental Health Insurance Among Those With Health Insurance Table II.2 presents the percentage of people with health insurance who also had both inpatient and outpatient mental health benefits, by source of health insurance. For example, the table indicates that 96 percent of individuals with private employer-sponsored health insurance at a self-insured firm were insured for the costs of inpatient mental health care. Nearly all individuals with health insurance had at least some coverage for both inpatient and outpatient mental health care. The only exception was that roughly one in 20 individuals covered by employer-sponsored plans did not have mental health benefits of any kind. Moreover, roughly one in 10 individuals covered by plans sponsored by small firms (fewer than 50 employees) had no mental health benefits. D. Total Population With Mental Health Insurance The number of individuals in the U.S. population with mental health insurance coverage is estimated as the product of Table II.1 (the proportion of the population with health insurance) and Table II.2 (the proportion of those with health insurance and mental health benefits). At least 90 percent of those in the U.S. population who had health insurance had mental health benefits as a component of that insurance-approximately 76 percent of the total U.S. population (Table II.3). Eighteen percent of the population had no mental health insurance, either because they had no health insurance (15.4 percent), or because their health insurance did not provide mental health benefits (2.4 percent). It is impossible to tell whether an additional 6.5 percent had mental health benefits, because data were not available for individuals covered under an individual policy, were non-working but had employer-sponsored insurance, or were covered from a source outside the household. The figures for inpatient mental health benefits and outpatient mental health benefits are nearly identical. The proportion of the population with mental health coverage varied moderately from state to state. In 1999, the proportion of individuals with mental health insurance ranged from a high of 82.0 percent in Minnesota, 82.9 percent in Massachusetts, and 81.9 percent in Hawaii to a low of 68.6 percent in California, 68.7 percent in Texas, and 69.3 percent in Louisiana (Table II.4). The primary reason for the state-to-state variation was the proportion of the population in each state without health insurance. Rates of uninsurance ranged from a low of 7.6 percent in Minnesota, 8.3 percent in Indiana, and 8.6 percent in Missouri to a high of 23.3 percent in Texas, 22.5 percent in Louisiana, and 21.0 percent in Arizona. Table II.2. Percentage of Health Insurance Covered Lives With Inpatient and Outpatient Mental Health Benefits, by Source, 1999
Table II.3. U.S. Population With Mental Health Insurance, 1999
State rates of uninsurance vary for a number of reasons. First, smaller firms were less likely to offer health benefits than larger firms (Kaiser Family Foundation and Health Research and Educational Trust, 2000) and the proportion of individuals employed by small firms varied from state to state. Second, the proportion of individuals enrolled in public insurance programs, such as Medicaid and SCHIP, varied by state due to differences in the income of the state population and state eligibility levels. Finally, states with large immigrant populations, such as California and Texas, had higher rates of uninsurance because of unique restrictions on immigrant access to public health programs (Kaiser Family Foundation, 2000). The percentage of individuals who had health insurance without mental health benefits varied over a much smaller range-from a low of 1.0 percent in Massachusetts, 1.3 percent in Florida and Hawaii, and 1.4 percent in Mississippi, to a high of 4.0 percent in California, 2.9 percent in Minnesota, and 2.8 percent in Colorado, Connecticut, and New Jersey. Among the factors behind this variation were the proportion of the population covered by private employer-sponsored insurance, the state rate of self-insurance, and the rate of enrollment in Federal programs.
Table II.4. Proportion of Population With Mental Health Insurance, by State, 1999 (Percentages)
Approximately 76 percent of the U.S. popu-lation had mental health benefits in 1999. The lack of health insurance was the most significant reason why an individual did not have mental health benefits. Even at the state level, differences in the percentage of individuals with mental health coverage primarily were driven by differences in state rates of health insurance coverage. Approximately nine out of 10 individuals with health insurance had mental health benefits as part of their coverage. Nearly all public insurance sources and the overwhelming majority of private, employer-sponsored health insurance plans covered mental health benefits. However, little is known about mental health benefits among some subgroups of coverage. For instance, no information is available on the prevalence of mental health benefits in individual insurance plans or in health plans for retirees. III. Generosity of Mental Health BenefitsThis chapter provides estimates of the proportion of individuals who have mental health benefits that meet or exceed a benchmark level of generosity, or that meet a common level of mental health coverage. Wherever possible, generosity of mental health benefits refers to one of the following: 1) benefits that meet or exceed the benchmark level of coverage; 2) benefits that are less than the benchmark; or 3) benefits that are not included in health insurance coverage. The benchmark level of generosity for mental health insurance benefits is coverage of 30 inpatient days, 20 outpatient visits, and prescription drugs. This level was chosen to represent the level of coverage typical of many health plans and is not intended as a measure of plan adequacy. Utilization limits for the benchmark were selected based on three pieces of evidence. The first was the advice of an expert advisory panel (the members of which are listed in Appendix C) on the typical provisions of employer-sponsored mental health insurance benefits in 1999. The second was the Mercer Worldwide Survey of Employer-Sponsored Health Insurance Plans, which indicated the typical mental health insurance plan in 1999 covered 30 inpatient days and 20 outpatient visits (see Appendix B). A third indicator was the Federal Employee Health Benefit Plan (FEHBP) requirement that all contracting health plans cover a minimum 30 inpatient mental health days and 20 outpatient mental health visits in 1999. In addition to utilization limits, prescription drug coverage was included in the benchmark benefit package. Prescription drugs are now a primary form of treatment for many mental illnesses. In 1997, prescription drugs accounted for almost 13 percent of total mental health care spending (Mark, 2000). Prescription drug coverage also is considered "standard" in the employer-sponsored health insurance market (Kaiser Family Foundation, 2000). Cost sharing and dollar limits were not included in the definition of benefit generosity since these measures vary considerably among health plans. Additionally, this definition of generosity only examines the availabilty of mental health benefits, not the affordabilty. A. Generosity of Mental Health Benefits, by Source of Coverage Although the most recent research on the generosity of mental health benefits has focused on private, employer-sponsored plans, this chapter provides a more comprehensive review of the generosity of mental health benefits from all major payors, including benefits available to Medicare beneficiaries, Federal employees, SCHIP and Medicaid enrollees, individuals receiving care in the military and veterans' health systems, and the Indian Health Service (see Table III.1). Several public providers of health insurance, such as Medicaid and Medicare, are major payors of mental health care, and the generosity of their coverage has significant implications for the extent and breadth of mental health coverage in the United States. 1. Private, Employer-Sponsored Insurance Estimates for the private, employer- sponsored health insurance market were derived from the Mercer Worldwide Survey of Employer-Sponsored Health Plans. The Mercer survey provides no specific information on benefit limits for medical/surgical services for those health plans indicating parity in mental health benefits. The survey did not identify plans offering mental health benefits that were at parity but that did not meet the generosity standard. This study assumes all plans with mental health benefits at parity had mental health benefits that met the benchmark standard. The generosity of mental health benefits varied with firm size. The percentage of individuals with mental health benefits meeting the benchmark increased as firm size increased. Only 46 percent of individuals with employer-sponsored health insurance in a firm with 10-49 employees had mental health benefits that met the benchmark, but the number increased to 67 percent for individuals who had employer-sponsored health insurance in a firm with 500 or more employees. 2. Medicare Table III.1. Public Sources of Mental Health Insurance in 1999
Table III.2. Generosity of Mental Health Benefits Among Individuals With Private, Employer-Sponsored Insurance Provided by Firms With 10 or More Employees, 1999
3. Medicaid With regard to adult beneficiaries, an examination of state Medicaid plans revealed six states in which the Medicaid benefit package for adults between the ages of 22 and 64 years does not appear to meet the benchmark of 30 inpatient mental health days, 20 outpatient mental health visits, and prescription drug coverage (Commerce Clearing House, see dates below). Table III.3. Generosity of Mental Health Benefits Among Those With Health Insurance, 1999
Alabama has a limit of 16 inpatient hospital days per year for both physical and mental conditions. The state also limits outpatient psychotherapy to 14 visits per year; it is unclear whether individuals could circumvent the limit by using clinics. The limit on psychotherapy is part of an overall 14-visit limit for all physician services (October 23, 2001). Arkansas limits adults to 24 inpatient hospital days per year for physical and mental health conditions. The state also limits outpatient visits to 12 per year for all physician services. The state plan does not cover psychologist services for adults (April 6, 1999). Mississippi limits total outpatient physician services to 12 per year. Psychiatric services by a physician are limited to 10 individual medical psychotherapy sessions and six group medical psychotherapy sessions (September 18, 2001). With the exception of enrollees in SoonerCare Plus, a Medicaid managed care program in Oklahoma City, Oklahoma, Medicaid enrollees are subject to an inpatient hospital limit of 24 days per year total for physical and mental conditions (April 16, 2002). West Virginia limits inpatient care to 25 days per year for all conditions (December 31, 2001). Wyoming has a limit of 12 visits per year on all outpatient services for adults in its Medicaid program (December 18, 2001). The Institution for Mental Diseases (IMD) exclusion prohibits states from receiving Federal reimbursement for Medicaid patients aged 22 to 64 years in IMDs, although states may add inpatient services in an IMD as an optional service for the elderly population. However, Medicaid programs generally provide inpatient psychiatric services to adult enrollees through general hospitals. 4. SCHIP For states that choose to implement an S-SCHIP program, benefits can be quite different from those available in the state Medicaid program. The Federal government requires only that state S-SCHIP benefit packages be comparable to one of the following benchmark plans: the FEHBP standard option plan, the state's employee health benefit plan, the health maintenance organization 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 selected plans (Center for Mental Health Services, 2000). Benefit limits are common among the 33 states using the S-SCHIP option (see Appendix D). Of the 33 states with S-SCHIP programs, 10 have no limits on mental health benefits (two additional states have at least one S-SCHIP plan option with no limits on mental health benefits), another 21 have benefit limits that meet or exceed the benchmark, and two (Montana and New Hampshire) have mental health benefits below the benchmark. In 1999, approximately 5 percent of S-SCHIP enrollees were in a plan with no limits on mental health coverage and just fewer than 95 percent were in a plan with limits that nonetheless met the benchmark benefit. Fewer than 1 percent of S-SCHIP enrollees were in the two states with a benefit package below the benchmark. 5. Other Sources of Health Insurance No information on mental health benefits, including whether mental health conditions are covered, is available for retired individuals with insurance from their previous employer (3.7 million), individuals with insurance from a source outside the household (4.6 million), or those with individually purchased health insurance policies (9.6 million). Figure III.1 Generosity of Mental Health Benefits in Total U.S. Population, 1999 Source: MPR calculations based on data from the CPS, the MEPS-IC, Mercer Worldwide Survey of Employer-Sponsored Health Plans, and public program information materials. Approximately 52 percent of individuals with health insurance had mental health benefits in 1999 that met or exceeded the benchmark package (Table III.3). However, when the uninsured are included, the percentage of individuals with mental health insurance in 1999 that met or exceeded the benchmark drops to approximately 44 percent of the entire U.S. population (see Figure III.1). Approximately 20 percent of the U.S. population had mental health benefits that did not meet the benchmark, and at least another 2 percent had health insurance that did not cover mental health services at all. For an additional 19 percent, insufficient data prevented estimates of the generosity of their mental health benefits: 12 percent had mental health benefits of unknown generosity, and 7 percent had health benefits, but with unknown mental health benefits. The remaining 15 percent were uninsured.
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