Establishes mental health parity in public health insurance plans

Section 2. Provides that mental health and substance abuse benefits provided in Family Health Plus shall be comparable to medical benefits provided as part of the Family Health Plus program.

Section 3. Authorizes the Commissioner to seek any necessary waivers to implement this chapter.

Section 4. Provides for an effective date of April 1 of the year next succeeding enactment.

JUSTIFICATION ; Timothy's Law (Chapter 748 of the Laws of 2007), one of the state mental health parity laws in the US, took effect January 1, 2007 and applies to most insurance policies in New York on the day they are issued, renewed, modified, altered, or amended. Before the law passed, health plans were permitted to discriminate against those with mental health needs by charging much higher co-payments and deductibles for inpatient and outpatient mental health care compared with the fees they charge consumers for regular medical office visits.

Top health plans also recently began to restrict coverage for mental health conditions, exclude coverage for chronic mental illnesses, and impose life time limits on inpatient psychiatric care. Timothy's Law remedied many of these barriers to care.

The equity and comparability provisions of Timothy's Law do not presently apply to the Child Health Insurance Plan or Family Health Plus Program. Each of those programs already provides coverage for inpatient and outpatient mental health and alcohol and substance abuse services.

This legislation simply assures that such coverage is comparable to that which is provided for other medical conditions under these programs, and does not place greater restrictions on coverage for mental health conditions or addictions than apply for other needs. Recent studies confirm the efficacy and cast effectiveness of such coverage, and, furthermore demonstrate that the costs associated with the enactment of mental health parity legislation are minimal. Actual analyses and emerging data from states with parity laws demonstrate that equitable insurance coverage for mental illnesses is indeed affordable.

Studies demonstrate that the cost of adopting mental health parity is negligible -often below one per cent. The NYS insurance department projected costs for Timothy's Law premium subsidies for small employers to be about one percent for the premium component attributable to the entire mental health benefit among private insurers and Health Maintenance Organizations in NYS. The comparability required under this legislation would cost a mere fraction of that sum, since (unlike commercial health plans previously) the Child Health Insurance Plan and Family Health Plus Program already provide mental health and addiction treatment coverage. Further, the cost to the taxpayer will be reduced, since most who lose benefits on Child Health Plus will be forced onto Medicaid. While the state receives 65% reimbursement for Child Health Plus, Medicaid is only reimbursed at 50%.

Finally, costs are incurred by individuals, employers, all levels of government, and society as a whole as a result of untreated mental illnesses that can also cause or contribute to accidents, job dissatisfaction, interpersonal conflict, turnover, disability, workers' compensation, involvement with the criminal justice system, disrupted lives and families, and increased dependency on public resources. By providing comparable coverage for mental health and substance abuse services for all children and adults in the Child Health Insurance Plan and Family Health Plus Program, mental illness and substance abuse can be diagnosed and treated quickly and thoroughly, thus placing less of a burden on public resources and businesses.

Legislative history

2008 S.5929/Referred to Health 2007 S.5929/Referred to Rules

Fiscal implications

Minimal.

Effective date

April 1st of the year next succeeding enactment.