Welcome to the first issue of the Alcohol and Drug Policy Institute's quarterly Policy Digest. The Policy Digest is a summary of recent events with an impact on the AOD field in California.

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Federal and State Changes in Insurance Coverage Expand Access to AOD Treatment

Against the dismal fiscal backdrop of the tardiest budget signing in state history and a still evolving national economic crisis, there were a couple of victories for the field in Washington and Sacramento. First was the passage of federal parity legislation. The other, here in California, was AB 1461 (Krekorian) which repealed the state’s archaic Uniform Accident and Sickness Policy Provision Law (UPPL).

Subtitle B of H.R. 1424, the Federal Emergency Economic Stabilization Act is titled the, "Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008." This act implements longstanding congressional efforts to correct inequities in insurance coverage for mental health and substance abuse disorders. The Act establishes parity standards that address factors above and beyond the annual and lifetime limits addressed in the Mental Health Parity Act of 1996. Over 100 million persons will benefit from these changes in law.

Key provisions of the Act are the following –

• Health plans that provide both medical and surgical benefits and mental health or substance use disorder benefits must ensure that financial requirements such as deductibles, copayments, coinsurance, and out-of-pocket expenses are no more restrictive than those applied to other health care benefits covered by the plan.

• There can be no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits. Treatment limitations include limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.

• If the plan provides coverage for medical or surgical benefits provided by out-of-network providers, mental health or substance use disorder benefits shall be similarly covered.

• The bill does not mandate that plans provide substance abuse or mental health benefits. However, plans will not be able to impose caps or other conditions on behavioral healthcare services that are different from those applied to other health services.

• An exemption is provided for small employers, that is, those with 50 or fewer employees. The bill does not exempt small employers from any applicable requirements contained in state parity laws.

• Health plans cannot permanently opt out of compliance with the parity standard. There is however, provision for a one-year exemption in the event costs of coverage exceed 2% of total plan costs in the first year or 1% of such costs in any subsequent year.

• The law goes into effect in October 2009. However, since coverage under many insurance policies is based on a calendar year many people will not see a change in their plans until 1 January 2010.

• The law requires that the reasons for any denials of reimbursement for mental health or substance abuse disorder benefits are available to participants and beneficiaries upon request.

• A small but gratifying detail is that the act, in amending and expanding the provisions of the Mental Health Parity Act of 1996 replaces the term “mental health benefits” with the more explicit reference “mental health and substance use disorder benefits”.

California UPPL Repeal

AB 1461 (Krekorian) was signed by the governor on 30 September 2008. This bill repealed California’s UPPL. Enacted in 1951, the UPPL permitted insurers to sell accident insurance policies that denied payment for alcohol related injuries.

The intent was to help prevent alcohol related car crashes by denying payment for treatment of injuries that occurred while the insured was under the influence. It was also thought that excluding payment for alcohol related accidents would help keep insurance costs down.

Over the years, this law has been interpreted to include health policies and impairment due to drugs other than alcohol. However, nearly 50% of patients admitted to trauma centers are injured while under the influence of alcohol. The unintended consequence has been that trauma centers and emergency rooms simply did not document whether a patient was under the influence at the time of admission.