Posted August 11, 2021
In 2008, Congress passed the Federal Mental Health Parity and Addiction Equity Act (Federal Parity Law) requiring insurance coverage for mental health and substance use disorder to be no more restrictive than coverage for other medical conditions. Although the Federal Parity Law has been on the books for over a decade, the implementation and enforcement has been difficult, and state parity laws have lagged. In 2018, The Parity Leadership Coalition released a state-by-state report card on mental health and substance use disorder parity laws. Thirty-two states received a failing grade, with Kentucky receiving a grade of “D.” Only seven states earned a grade of “C” or higher.
While substantial progress has been made in the areas of financial parity (e.g., cost sharing) and quantitative or numerical treatment limitations (e.g., visit or day limits), challenges to full parity persist in the way some insurers design and apply managed care techniques more restrictively for mental health and addiction treatment. Disparities in these non-quantitative treatment limitations (NQTLs) are often more complex and harder to identify and compare because they are not expressed numerically but still limit the scope or duration of benefits. NQTLs can include prior authorization policies, prescription drug formulary design, step therapy requirements, and provider rate setting methodologies.
House Bill 50, one of five KMA priority bills passed during the 2021 Kentucky General Assembly, will bring much needed transparency to mental health parity by requiring insurers to demonstrate compliance with federal parity laws. Sponsored by Representative Kim Moser, House Bill 50 requires health benefit plans that provide coverage for treatment of mental health conditions and substance use disorder to submit an annual report to the Kentucky Department of Insurance providing a detailed analysis showing that medical necessity criteria and NQTLs are comparable to and applied no more stringently for coverage of mental health and substance use benefits than for medical and surgical benefits. The law applies to health benefit plans issued on or after January 1, 2022. Group health benefit plans covering fewer than 51 employees that are not otherwise required to provide parity in mental health condition benefits under federal law are exempt.
Ensuring equal access to mental health and addiction treatment has never been more important to the health and wellbeing of Kentuckians. The COVID-19 pandemic has negatively affected overall mental health and created barriers to treatment for those struggling with mental health and substance use. According to a report by the Kaiser Family Foundation, 35.2% of adults in Kentucky reported symptoms of anxiety or depressive disorder from April 28 to May 10, 2021—the second highest percentage in the nation. Likewise, preliminary data from the Centers for Disease Control and Prevention show a 53% increase in drug overdose deaths in the state during 2020.
By requiring the accountability and transparency that has been missing from mental health parity laws, House Bill 50 can help patients access the care to which they are entitled and put Kentucky on the path toward achieving true mental and behavioral health equity.