Mental Health and Insurance: Coverage for Severe and Life-Threatening Conditions

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Approximately 26% of the American adult population suffers from a mental illness, which the National Alliance on Mental Illness (NAMI) classifies as “a medical condition that disrupts a person’s thinking, feeling, mood, ability to relate to others, and daily functioning.”

Tragedies like the shooting at an elementary school in Newtown, Conn., in which the shooter was reported to have suffered from a mental disability, brings the issue of addressing and treating mental illness to the forefront. Although mental illness affects a significant number of people, often times sufferers go without the help they require.

Identifying Severe and Life-Threatening Mental Illnesses

People with more severe, potentially life-threatening mental illnesses may be at a higher risk for negative outcomes if they do not receive the medical care necessary.

Mental Illnesses

  • Depression: Severe symptoms of depression can cause individuals to experience feelings of hopelessness in which they cannot see a way out of their problems.”The nature of thinking in depression often creates a negative spiral where a depressed person’s brain only pays attention to negative, unpleasant thoughts and memories, and therefore the negative mood is strengthened,” said board-certified neuropsychologist Karen Postal. “Bipolar depression or manic depression can also be life-threatening, as individuals gripped by mania may engage in highly risky, dangerous behavior while they are ‘up’ and feel invincible.”
  • Schizophrenia: This chronic illness interferes with a person’s ability to think clearly, manage emotions, make decisions, and relate to others. Schizophrenia is strongly associated with a high suicide rate.
  • Addiction: Referred to as mental health disorders, addictions can include things such as sex, gambling, and drugs. These disorders can be life threatening because of overdoses, risky behaviors surrounding the addiction, and an increased risk for depression, Postal said.
  • Post-traumatic stress disorder: Those with PTSD usually have undergone some sort of trauma, such as rape, natural disasters, or experiences in the military. Experiencing traumatic events can change the functioning of the brain, making the person feel like the traumatic event is happening repeatedly, which can prevent healing. PTSD is often accompanied with suicidal thoughts and attempts.

The Trouble with Mental Illness Insurance Coverage

Traditionally, people who suffer from mental illness have had a hard time trying to get insurance coverage for various reasons, such as difficulty in proving their condition, little attention being paid to mental illness and its treatment, and limited coverage from providers who do not deem mental illnesses a health problem.

Federal parity laws, which require that health insurance plans provide equal coverage for mental and physical health conditions, have begun to address the issue.

However, barriers still exist.

“Patients and therapists are often asked to fill out lengthy forms, or spend long periods of time on the phone with insurance companies in order to authorize treatment,” Postal said. “Insurance companies do not ask primary care physicians to go through this each time they treat high blood pressure.”

Postal said many insurance companies restrict which psychologists or therapists can be in their networks.

“If someone changes jobs, or their company switches insurance companies, a severely depressed individual in their family might be forced to stop treatment with their long-term psychologist and begin again with a stranger who is covered under their network,” she said. “Non-English speakers with mental health conditions often do not have the option of seeing a psychologist who is competent in their language or culture, because of network issues.”

In addition, insurance companies have been steadily cutting rates for psychologists and other mental health professionals.

“When reimbursement is dramatically cut, psychologists and other professionals cannot afford to continue [working with that provider]. This means that the most vulnerable patients with mental health disorders lose access to highly trained professionals,” she said.

Psychologists, who typically hold doctoral degrees, are prohibited from being Medicaid providers in many states.

“Only master’s-level professionals may provide care,” said Postal. “This means that some of the most ill, complex, and severely affected patients do not have access to the highest trained mental health professionals.”

Difference between Public and Private Health Care Facilities

The manner in which mental health insurance coverage is accepted and handled differs between public and private health care facilities.

“[Private mental health facilities] cater to families that have money to afford a facility,” explained Ben Brafman, licensed mental health counselor. “A public facility typically doesn’t have the same financial resources and depends on public or government funding. For many public health care facilities, mental health services are not a top priority. Some providers find that it is difficult to maintain compliance with Medicare and Medicaid as they change restrictions and payment schedules regularly.”

Insurance broker Katherine Hermes said while public facilities are more likely to accept any type of insurance, private facilities tend to accept a smaller range of providers and may bill patients for the amounts insurance does not cover.

After sharing insurance information with the office manager or claims processing department, Hermes suggests patients be prudent and consider asking the following questions:

  • If the insurance does not pay in full, will you expect me to pay the unpaid balance?
  • How many visits/how long does my insurance guarantee payments?
  • What are the limitations on my insurance payments to you?

A proactive approach allows the patient to take control and stay informed. Patients asking the “worst-case scenario” questions upfront are better off than living in suspense of bills and invoices.

Legislation that May Help Mental Illness Health Care Coverage

Lawmakers have recognized the need for better mental health insurance coverage. Some of the features of the Affordable Care Act include incentives provided to physicians to join together and form “Accountable Care Organizations,” some of which specifically target the needs of mentally ill patients.

“Many states have legislation pending that would require insurance companies to allow patients to continue an episode of care with their psychologist when they switch insurance companies, even if their psychologist is not in the new network,” Postal said. “Legislation is also pending to require insurance companies to cover culturally competent psychological treatment out of network, if none is available in network.”

Postal said there are not enough psychiatrists in the country to meet the mental health needs of the population with 80% of the psychiatric medications prescribed in the country being by primary care physicians. For this reason, psychologists have been seeking privileges to write prescriptions.

New Mexico and Louisiana passed legislation allowing psychologists who obtained additional education and required certification to prescribe medications. There are several other states with legislation pending as well.

President Barack Obama’s health care package known as “Obamacare” is expected to provide mental health coverage to 32 million people for the first time. According to The New York Times, insurers will be required to cover treatment of mental illnesses, behavioral disorders, drug addiction and alcohol abuse, and other conditions.

How to Get the Coverage You Need for Mental Illness

When determining how to get the coverage needed for a mental illness, patients should first understand how mental health insurance companies work — by looking at it from the perspective of the insurance company.

“The insurance company looks at claims history for a variety of diagnoses because they need to determine a rate to charge the policy holder each month in exchange for a promise of services,” said Hermes. “They are for-profit, so they don’t set themselves up to lose.”

Insurance companies create premiums based on a median number of visits, services and coverage for a diagnosis, knowing that most people will fall below the limit.

“Once a premium is determined, the insurance company states that in exchange for this premium, the consumer is entitled to X number of outpatient visits, X number of inpatient days, and perhaps a finite number of tests,” she said. “After that, consumers are on their own.”

Though the claims process can be a headache, from the consumer’s perspective, it’s important to break down mental health claim activity into its component parts.

“So, if a symptom of the mental illness is weight loss, don’t go to the mental health provider for a treatment that could be administered by a medical health provider,” Hermes said. “Defer to the medical doctor where your visits are not limited.”

Hermes identified a potential situation of a mental health patient: if weight loss is the problem, the root cause might be anorexia, but the diagnosis of malnutrition can be managed by the primary doctor. This keeps the mental health claims out of your more limited mental health coverage.

One obstacle many mental health patients may encounter is insurance providers unwilling to cover what they deem as a high-risk consumer.

“Every visit you claim through any insurance becomes part of your insurance [claims] history. When an insurance provider looks at that information to determine a rate, they call it underwriting,” Hermes said. “An insurance company underwrites your application for coverage and determines the premium they will accept in exchange for covering the risk you present. Sometimes, the insurance company says, there is no amount of money that they are willing to accept in exchange for covering you so they decline your application.”

How can consumers put themselves in the best position regarding insurance coverage?

Manage the information flow, said Hermes. Like automobile insurance, choose the main things to run through insurance. For example, if a doctor visit copay is $40, ask what the visit would cost if you paid the entire thing. If it’s $50, consider paying 100% out of pocket.

“Managing the information you feed the insurance company will make you a better candidate for a bigger policy should the need arise down the line,” she said.

Education is essential to changing treatment and coverage of mental health. Those suffering from mental illness and their families should familiarize themselves with all aspects of the coverage available. They must be their own advocates and know their benefits.

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