Legislature 2004
Bill tackles disparity in health insurance

By Kyung M. Song
Seattle Times staff reporter

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When a severely depressed Elizabeth Adair showed up at Swedish Medical Center the day after Christmas two years ago, a doctor ended up admitting her for 40 days.

That hospitalization set Adair on a path to financial ruin.

Adair didn't know it at the time, but her state-employee health-insurance plan had a 10-day annual cap on inpatient psychiatric treatment. So as Adair was racking up charges of $1,234 a day just for room and board, her insurance coverage had run out before her stay was half over.

Adair got caught in what some mental-health advocates say is a widespread discrimination: unequal coverage between psychiatric disorders and physical medical conditions.

In Washington, as in 16 other states, it's legal for health insurers to limit treatments and require higher co-payments and out-of-pocket expenses for mental-health care than for other types of medical coverage.

Mental-health parity House Bill 1828 would require private health plans and those for public employees and low-income people enrolled in the state's Basic Health Plan to cover mental-health services at levels equal to other medical services. For instance, insurers could not impose higher co-payments or put caps on benefits unless they also apply to all other medical conditions.

For the seventh consecutive year, a bill that would eliminate the insurance disparity is pending in Olympia. The House passed the bill Feb. 13 on a 64-33 vote. But unless the bill gets a hearing before the Senate Ways and Means Committee by Monday, the legislation will die once again.

To boost the odds of passage, sponsors have weakened the bill's provisions. For instance, the law would be phased in over five years instead of immediately, and it would exempt coverage for sexual dysfunction and substance-abuse-related disorders.

It also would exclude coverage for two dozen "life transition problems" listed in the official mental-health diagnostic manual, such as counseling for parents and children in child-abuse cases. Most critically, the parity law would not apply to insurance plans offered by employers with 50 or fewer workers.

Randy Revelle, chairman of Washington Coalition for Insurance Parity, which represents more than 100 groups that support the legislation, said sponsors diluted the bill with deep misgivings but little choice.

Business organizations oppose the bill, saying it would raise insurance premiums and make it more expensive for employers to provide health coverage. They also say that open-ended benefits for mental disorders could lead patients and doctors to needlessly prolong treatments.

Proponents say mental-health parity would raise insurance premiums by less than 1 percent while reducing society's costs for disability, unemployment and welfare.

The state Office of Financial Management says the proposed legislation would add nearly $5 million to the $965 million spent annually on state employee health benefits.

"If we insist on no exemption for small employers, this bill is dead on arrival," said Revelle, who also is a vice president with the Washington State Hospital Association. "We'd rather get something than no bill at all."

Connecticut, Maryland, Minnesota and Vermont have the nation's most comprehensive insurance-parity laws, banning private insurance plans from making any distinction between disorders related to mental health or substance abuse and physical ailments such as cancer, asthma or coronary heart disease. If it passes, Washington's bill would be among the weakest.

Doug Wear, executive director of the Washington State Psychological Association, said suspicion still lingers in the minds of many that psychiatric disorders aren't as real as those with physical origins.

"That skepticism applies to the whole field of mental health," Wear said. "They look at depressed people and say, 'Pull yourself up by the bootstraps. You're not really sick.' "

That battle for legitimacy continues even though mental illness is the second leading cause of disability and premature death in developed countries. The World Health Organization in the mid-1990s determined that the "disease burden" from mental disorders, including suicides, outranked cancer, respiratory diseases and all other conditions except cardiovascular illnesses.

What's more, mental illnesses often go untreated. According to a two-year study led by researchers at Harvard Medical School released in 2003, as many as 14 million U.S. adults, or 6.6 percent, suffer from major depression in any given year. The majority of them do not receive proper treatment, because of misdiagnosis, denial, lack of insurance or other reasons.

The lack of a clear-cut "cure" for some mental illnesses is one reason limited insurance benefits have become the industry standard, said Dave Wasser, spokesman for the Washington Health Care Authority, an agency that administers health plans for 300,000 current and retired state-government employees. That was the insurance plan that Adair, then an administrative secretary with the Department of Social and Health Services, had when she was admitted to Swedish.

The state plan caps psychiatric hospitalization to 10 days a year and outpatient treatments to 20 visits a year.

"You can tell when a broken bone is healed. You can tell when a cancer is in remission," Wasser said. "You don't have that kind of definitive decision with mental illnesses."

In spite of her ordeal, Adair worries that unlimited mental-health coverage could keep some patients under treatment too long. Adair was taking Paxil, an anti-depressant, when she checked into Swedish in what she said was an "emotionally distressed and highly depressed" state. She didn't anticipate that her inpatient treatment would be so lengthy.

Adair, 65, said she spent much of her 40-day stay in a mental fog from the various medications prescribed for her. By the time she was discharged, she had accrued more than $56,000 in bills, not counting her doctors' fees. She still owes Swedish more than half that amount.

"I should never have been kept in that hospital that long in the first place," Adair said. "I lost track of the days. I just did what I was told."

Swedish officials declined to discuss Adair's case, citing patient confidentiality. But Dr. Thomas O'Brien, medical director of behavioral health at Swedish's Providence campus, said doctors and hospitals are mindful about patients whose treatment needs exceed their insurance coverage. However, "our overriding concern, especially with slow responders, is that their clinical needs come first," O'Brien said.

O'Brien said unusually lengthy hospitalization for psychiatric patients is flagged both by internal hospital reviewers and by insurers checking to ensure that they are medically necessary. O'Brien added that arbitrarily limiting coverage compromises patient care and puts financial pressure on psychiatric units, many of which — including Swedish's — lose money.

Adair now lives on her Social Security benefits and has Medicare coverage, which also has limited mental-health benefits. Her doctor sued her for nonpayment. She plans to file for personal bankruptcy as soon as she can come up with the final $425 down payment for her attorney.

The financial toll profoundly altered Adair's life; she fears losing any money kept in her checking account and now pays for everything in cash and money orders. But she fears even more the possibility that limitless coverage for mental illnesses might keep vulnerable patients under treatment indefinitely.

"Hospitals and doctors will take advantage of that insurance," she said.

Kyung Song: 206-464-2423 or ksong@seattletimes.com

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