by Elena Skoura, Graduate Intern, bWell-informed
Congress passed a great victory for civil rights on October 3, 2008—the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Act. Named after the deceased Democratic Minnesota senator and the retiring New Mexico Republican senator, the law (HR 1424) requires group health plans of 51 or more employees to cover mental illnesses to the same extent as physical diseases. It is considered a fundamental step towards eliminating the stigma and prejudice the 113 million Americans suffering from mental illness have faced.
The new legislation, which goes into effect for most health plans on January 1, 2010, will extend mental health services to 82 million Americans who live in states that have not already passed mental health parity legislation.
This legislation requires health insurance companies to charge the same deductibles, copayments and out-of-pocket expenses for mental health treatments that they do for physical conditions. Plans are not obliged to offer mental health coverage or cover every mental health condition—but for what they do cover, the costs must be equivalent.
To address concerns that small businesses would find it hard to afford mental health coverage for their employees and might choose to eliminate it altogether, the legislation applies only to group health plans with more than 50 workers. However, small businesses may still be required to offer mental health parity if required by the laws of the state in which they operate.
While MHPA also doesn’t apply to insurance coverage in the individual/non-employment based market, the victory may ultimately impact consumers in the individual market as well. Legislative changes in group health plans often "trickle down" to other types of coverage. If the legislative changes were to apply to individual coverage, consumers could see prices rise considerably to cover the new levels of coverage. To keep plans affordable, some insurers might opt not to offer any mental health coverage at all.
While price remains a concern, the new legislation encourages hope that in the future, human welfare will be approached in a open-minded way. Mental illness should be acknowledged and treated with respect and concern, following the ancient Greek saying: “You shall have a healthy mind in a healthy body”—and vice versa.
Wednesday, December 10, 2008
Wednesday, December 3, 2008
For private Medicare insurers, the honeymoon is over
by Mary Hobson, CMO, bWell-informed
Way back in 1982, Congress fell in love with the idea of allowing private insurers to offer competitive HMO products as an alternative to traditional fee-for-service Medicare options. Seen through rose colored glasses, the marketplace was the cure for all Medicare’s woes. Through the magic of competition, private insurers would provide greater choice, reduced cost, and better quality service.
The legislative body was still in love with the idea in 1997, when it expanded the products private insurers could offer to Medicare eligible to include preferred provider organizations (PPOs), provider-sponsored organizations (PSOs), and private fee-for-service (PFFS) plans. And the love-fest showed no signs of abating even as late as 2004, when the Medicare Modernization act passed, raising payment rates to private providers.
Today, however, with an incoming Democratic regime, the Hill’s long-term romance with “free market” Medicare could be at an end. Helping the “breakup” along? A recent report issued by the respected health policy journal Health Affairs which indicates that taxpayers are actually paying more to subsidize private Medicare plans. Says Marsha Gold, senior fellow at Mathematica Policy Research who authored the report:
“Clearly, the Medicare Modernization Act (MMA) has expanded choice and the private-sector role. But it also has added to Medicare's complexity and costs and has created potential inequities, without apparent improvements in quality.”
While legislators’ ardor is likely to cool substantially, Medicare customers are still flocking to the plans in droves. Today, one in three Medicare beneficiaries with Part D now gets their coverage from private third party providers. Almost a quarter of all Medicare beneficiaries, more than 10 million people, are enrolled in private plans.
Ironically enough, the extra funding these plans receive--according to the report, they are paid 12 percent more on average--is one of the biggest reasons for their popularity. The added value averages more than $1,100 a year per patient, and some of that money goes to provide extra benefits like reduced cost-sharing or reduced premiums for add-on benefits like vision and dental care. A large percentage, however, goes to insurance company profits.
And while some Medicare recipients enjoy a few additional benefits, the overpayments have resulted in an overall rise in Medicare’s costs—with taxpayers and traditional Medicare plan beneficiaries picking up the tab.
2009 looks to be a year in which Congress takes a stand, with support from the White House. On the campaign trail, President-elect Barack Obama called for eliminating the excessive subsidies and paying private plans only what it would cost to treat the same patients under traditional Medicare. Whatever happens, it’s clear that additional monitoring, oversight, and accountability will mean the honeymoon is over for private Medicare insurers.
To download the PDF version of Marsha Gold's report, "Medicare's Private Plans: A Report Card On Medicare Advantage", click here.
Way back in 1982, Congress fell in love with the idea of allowing private insurers to offer competitive HMO products as an alternative to traditional fee-for-service Medicare options. Seen through rose colored glasses, the marketplace was the cure for all Medicare’s woes. Through the magic of competition, private insurers would provide greater choice, reduced cost, and better quality service.
The legislative body was still in love with the idea in 1997, when it expanded the products private insurers could offer to Medicare eligible to include preferred provider organizations (PPOs), provider-sponsored organizations (PSOs), and private fee-for-service (PFFS) plans. And the love-fest showed no signs of abating even as late as 2004, when the Medicare Modernization act passed, raising payment rates to private providers.
Today, however, with an incoming Democratic regime, the Hill’s long-term romance with “free market” Medicare could be at an end. Helping the “breakup” along? A recent report issued by the respected health policy journal Health Affairs which indicates that taxpayers are actually paying more to subsidize private Medicare plans. Says Marsha Gold, senior fellow at Mathematica Policy Research who authored the report:
“Clearly, the Medicare Modernization Act (MMA) has expanded choice and the private-sector role. But it also has added to Medicare's complexity and costs and has created potential inequities, without apparent improvements in quality.”
While legislators’ ardor is likely to cool substantially, Medicare customers are still flocking to the plans in droves. Today, one in three Medicare beneficiaries with Part D now gets their coverage from private third party providers. Almost a quarter of all Medicare beneficiaries, more than 10 million people, are enrolled in private plans.
Ironically enough, the extra funding these plans receive--according to the report, they are paid 12 percent more on average--is one of the biggest reasons for their popularity. The added value averages more than $1,100 a year per patient, and some of that money goes to provide extra benefits like reduced cost-sharing or reduced premiums for add-on benefits like vision and dental care. A large percentage, however, goes to insurance company profits.
And while some Medicare recipients enjoy a few additional benefits, the overpayments have resulted in an overall rise in Medicare’s costs—with taxpayers and traditional Medicare plan beneficiaries picking up the tab.
2009 looks to be a year in which Congress takes a stand, with support from the White House. On the campaign trail, President-elect Barack Obama called for eliminating the excessive subsidies and paying private plans only what it would cost to treat the same patients under traditional Medicare. Whatever happens, it’s clear that additional monitoring, oversight, and accountability will mean the honeymoon is over for private Medicare insurers.
To download the PDF version of Marsha Gold's report, "Medicare's Private Plans: A Report Card On Medicare Advantage", click here.
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