- Report Published -
|Parity in the Coverage of Mental Health Treatment and Coverage for Outpatient Treatment in Individual Policies and Contracts|
|Special Advisory Commission on Mandated Health Insurance Benefits|
|Section 38.2-3412 of the Insurance Code of Virginia required, in 1991, that individual and group accident and sickness insurance policies and subscription contracts delivered, issued for delivery. reissued, extended; or when any term of the policy or contract is changed or any premium adjustment is made that provide coverage on an expense incurred basis for a family member provide coverage for a mental, emotional and nervous disorder. The limits of the benefit were to be no more restrictive than for any other illness except that benefits could be limited to a minimum of 30 days of inpatient treatment for mental, emotional and nervous disorders in a mental or general hospital. The required coverage included treatment for drug and alcohol rehabilitation and treatment. The levels of coverage could be different from the coverage that is payable for the treatment of other mental, emotional and nervous disorders if the benefits covered the reasonable cost of necessary services or provided an $80 per day indemnity benefit. Benefits could also be limited to 90 days of active inpatient treatment in the covered person's lifetime.|
The mandate required that insurers and health services plans "make available," to group policyholders only, coverage for outpatient treatment for mental, emotional and nervous disorders. These outpatient benefits consisted of durational limits, dollar limits, deductibles, and coinsurance factors that were no less favorable than for physical illness. The statute allowed the coinsurance factor to be up to 50% or the coinsurance factor applicable for physical health, whichever is less. The maximum level of benefits for any given year could be no less than $1,000. Section 38.2-3413 required coverage be made available under group contracts for treatment of alcohol and drug dependence.
House Bill 1329 was introduced during the 1991 Session of the General Assembly, based on the recommendations of an 18-month task force, to revise § 38.2-3412. The task force, composed of representatives of health care providers, insurers, the business community, relevant state agencies, and other organizations, was created to study the adequacy of insurance benefits for people receiving treatment or care for all mental disabilities. HB 1329 was referred to the Special Advisory Commission on Mandated Health Insurance Benefits (Advisory Commission) for review.
House Bill 1329 allowed the existing required 30 days of inpatient care to be converted to include partial hospitalization and outpatient treatment benefits. The insured or subscriber was allowed to convert the 30 days of inpatient care to up to 20 days of inpatient care with a 20%) copayment, $1,000 of outpatient visits with a 50% copayment, and the 20 days of inpatient care could be converted to up to 40 days of partial hospitalization. The insured had the option of choosing the existing 30 days of inpatient coverage or the option mentioned above. Insurers recommended that the bill be revised, and the addition of partial hospitalization and outpatient treatment benefits be offered In lieu of some portion of the then current 3D-day inpatient treatment benefit in a largely cost-neutral manner.
The Advisory Commission also reviewed House Joint Resolution 206, which requested the Advisory Commission to study the need for parity in coverage for mental and physical illnesses. The Advisory Commission chose to study the parity issue concurrently with HB 1329.
The Advisory Commission voted to recommend that § 38.2-3412 be revised to include benefits for partial hospitalization and outpatient treatment in 1992. The Advisory Commission supported the addition of partial hospitalization and outpatient benefits in lieu of some portion of the 30 days of inpatient treatment in an effort to develop a cost-neutral recommendation.