New York, Ohio adopt limited mental health parity coverage

They join a majority of states requiring insurers to provide mental health benefits that are more on par with coverage for physical illnesses.

By Doug Trapp — Posted Jan. 22, 2007

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Years of lobbying finally paid off for physician groups and consumer advocates in Ohio and New York with new laws mandating improved insurance coverage for mental illness.

In late December 2006, the outgoing governors of each state signed measures into law aligning the two states with 36 others that have adopted at least limited mental health parity laws.

Neither law covers substance abuse treatment, contrary to policy supported by the American Medical Association. The measures apply to insurance plans offered only locally in each state and not plans that cross state borders.

Still, Timothy's Law is the most significant piece of mental health care access legislation in the state's history, said C. Deborah Cross, MD, president of the New York State Psychiatric Assn.

The measure is named after Timothy O'Clair, a 12-year-old from Schenectady County who committed suicide. He was unable to get treatment for his emotional disorder under his parent's insurance. His father, Tom O'Clair, campaigned for the law for years by holding candlelight vigils and other events. The New York law was a success in large part because of the emotional appeal of this real-life example, Dr. Cross said.

"This is not a perfect bill. However, it is a start," Dr. Cross said. She added that full parity with physical health benefits is the goal.

New York's law is the stronger of the two. It will reimburse small businesses -- those with fewer than 50 employees -- for the cost of providing standard coverage of 20 outpatient visits and 30 inpatient days for mental illness in a calendar year. One early estimate put that cost at $20 million to $30 million for the state, said Seth Stein, executive director and general counsel for the New York State Psychiatric Assn.

Larger companies must provide that coverage, plus insurance for several biologically based mental illnesses, that is fully equal to their coverage for physical illnesses.

It wasn't immediately clear how many New York residents would be affected, but the bill should help primary care physicians, Stein said. "[Physicians] can refer now with greater confidence that patients will be able to get treatment," he said.

Ohio's law also mandates coverage for several biologically based mental illnesses but exempts insurers that prove that their costs have increased by more than 1% over a one-year period. (See correction)

At least 1 million Ohioans -- a rough estimate -- could be affected, according to Sul Ross Thorward, MD, chair of the Ohio Psychiatric Assn.'s government relations committee.

But the Ohio law wasn't expected to have a dramatic impact on the number of visits to psychiatrists and other physicians, because Ohio already required some basic mental health care benefits. Dr. Thorward said the law was more likely to help in catastrophic situations.

"Stuck on full volume"

In hearing after hearing, Dr. Thorward compared a person with schizophrenia to a stereo stuck on full volume. A person's substantia nigra, or volume knob, regulates dopamine. If the volume is too high, you have schizophrenia. If turned off, you have Parkinson's disease.

Under previous law, a person with schizophrenia could receive coverage for only 10% of the costs of the treatment, compared with full coverage for Parkinson's patients.

"That's how health insurance insures the brain in the state of Ohio," Dr. Thorward said.

The state laws regulate insurance alongside the federal Mental Health Parity Act of 1996. It requires employers that offer health insurance and that have more than 50 employees to provide the same annual and lifetime limits to mental health coverage as to physical health coverage.

"It's very limited in scope," said Nicholas M. Meyers, director of government relations for the American Psychiatric Assn.

State law does not preempt federal law but instead regulates the insurance policies and businesses not covered by federal law.

Too many mandates?

Business and insurance groups oppose laws such as the New York and Ohio measures mainly because of concerns about costs.

America's Health Insurance Plans spokesman Mohit Ghose said mandates don't improve consumers' insurance access because they neither lower the cost of health care nor measure how efficiently medical services are delivered. Also, Diagnostic and Statistical Manual of Mental Disorders may not be the best standard for mental health parity laws, because many conditions don't have an effective treatment, where some biologically based mental illnesses do, Ghose said.

A Democratic Congress has given hope to physicians and advocacy groups that this could be the year Congress adopts full mental health parity legislation, the American Psychiatric Assn.'s Meyers said.

The National Federation of Independent Businesses, which generally opposes parity mandates, would not be surprised to see national mental health parity legislation this year, said Amanda Austin, manager of legislative affairs. The federation is hoping that any legislation includes exemptions or assistance for small businesses, she said.

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Promoting parity

In late December 2006, mental health parity bills were signed into law in New York and Ohio. Here are some details.

New York

  • Requires employers to offer at least 20 outpatient visits and 30 inpatient days for mental health care in a calendar year.
  • Mandates fully equal coverage for businesses with 50 or more employees for "schizophrenia/psychotic disorders, major depression, bipolar disorders, delusional disorders, panic disorders, obsessive compulsive disorders, bulimia and anorexia."
  • Mandates fully equal coverage for serious childhood emotional disorders for businesses with 50 or more employees.
  • Provides state funding to pay the additional costs of complying with the law for businesses with fewer than 50 employees.


  • Mandates insurance policies that include coverage on par with benefits for physical illnesses for inpatient hospital services, outpatient services, medication, maximum lifetime benefits, co-payments, and individual and family deductibles for biologically based mental illnesses.
  • Offers an exemption to insurers that can prove their costs increased by more than 1% in one year because of the law. (See correction)

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This story originally incorrectly attributed a reference to mold-related respiratory issues at a Utah regional medical center. The reference was taken from a National Institute for Occupational Safety and Health report. American Medical News regrets the error.

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