How Much Does One Benefit Change Cost?

(Click here for more reports on the cost of mandated benefits, updated 7-30-08)

A bill that would increase mandatory insurance coverage for mental health issues is pitting consumer advocates against insurers and business groups worried about rising premium costs. Here's a description of the change:

"Under the Commonwealth’s current law, benefit parity exists for nine “biologically-based” mental health conditions for adults and for any conditions in children (18 and under) that limit functioning and social interaction. Conditions specified under this law are covered without annual or lifetime benefit limits and are also at parity with regard to cost sharing. Other conditions not included in these requirements must be covered for at least 60 inpatient days and 24 outpatient visits. Currently, benefits for alcoholism and chemical dependency are mandated to include 30 days of inpatient treatment and $500 for outpatient treatment. H. 4423 extends this partial parity to full parity for both mental health and substance abuse services, requiring non-discriminatory coverage for the diagnosis and medically necessary treatment of mental health and substance abuse disorders as described in the most recent edition of the Diagnostic and Statistical Manual (DSM) of Mental Disorders."

That description is in a report out today on the cost and other impacts of the bill. Here's a summary of the findings:

"The projected increase in spending that would result from H. 4322 ranges from 0.1% to 0.3% of premiums or $12.9 to $38.8 million. The per member per month (PMPM) impact ranges from $0.46 to $1.39."

Worth it?

The bill passed the House and is pending in the Senate. Two health insurers say if it becomes law, they will have to require a lot more paperwork/proof that more than 24 “talk” therapy visits (the current standard) a year are necessary or else health care spending on such therapy would rise dramatically.