03/19/1998 03:05 PM House HES

HCR 21 - PARITY FOR MENTAL HEALTH TASK FORCE                                   
                                                                               
Number 0900                                                                    
                                                                               
CHAIRMAN BUNDE announced the next order of business would be HCR
, "Establishing the Alaska Task Force on Parity for Mental                   
Health."  He said he would entertain a motion for the adoption of              
the proposed committee substitute (CS).                                        
                                                                               
REPRESENTATIVE GREEN made a motion to adopt the proposed CS, 0-                
LS0972\E, Ford, 3/19/98, as a work draft.  There being no                      
objection, that version was before the committee.                              
                                                                               
Number 0935                                                                    
                                                                               
WALTER MAJOROS, Executive Director, Alaska Mental Health Board,                
Department of Health and Social Services, presented the sponsor                
statement on behalf of the department.  He said the main purpose of            
the CS is to establish a task force to study the issue of mental               
health parity and health insurance.  It's basically the issue of               
differential treatment of mental illnesses versus physical                     
illnesses in health insurance.  The task force would report back to            
the legislature with recommendations on how Alaska should address              
this issue.  He informed the committee the legislation is being                
brought forth by a consortium of 14 organizations that include                 
consumer organizations, provider organizations, and state of Alaska            
organizations.                                                                 
                                                                               
MR. MAJOROS pointed out that nine out of ten insurance policies                
treat mental illnesses different from physical illnesses which                 
means less coverage, less benefits, and often no coverage and no               
benefits for mental illnesses.  In recognition of this problem,                
there has been a lot of action at both the federal and state                   
levels.  He told the committee at the federal level in 1996, the               
federal government passed a bill called the Mental Health Parity               
Act of 1996 which is an excellent first step toward achieving                  
parity.  He advised the committee the federal bill did two things:             
1) it equalized annual benefit limits for mental illness versus                
physical illness; and 2) it equalized lifetime benefits within                 
health insurance policies for mental illness versus physical                   
illness.  Mr. Majoros said, "The legislation is a first step but               
there are many things that this legislation doesn't do.  Insurance             
companies still do not have to cover mental illness.  If they do               
have it, they can drop it as a result of this legislation if they              
find it too onerous.  If they can demonstrate that their costs                 
increased by more than 1 percent, they can receive an exemption and            
there's no provisions to equalize things like copayments, or                   
deductibles, or visits, or anything relative to benefit design."               
                                                                               
MR. MAJOROS explained in recognition of this, several states have              
taken their own actions, some before the federal legislation and               
some afterwards.  At this point, 15 states have passed parity                  
legislation and 25 states are considering legislation at this time             
including the state of Alaska.  He noted states have taken many                
different approaches in terms of how they have addressed parity,               
but most of them feel that it is an important issue to address.                
                                                                               
Number 1094                                                                    
                                                                               
MR. MAJOROS then discussed the costs of mental health parity.  In              
terms of the impact of the federal legislation, a study was                    
recently conducted by Rand Corporation and they determined to                  
equalize annual limits .  One of the main provisions of the federal            
act will cost approximately $1 per person, per year.  It's a real              
negligible cost.  To provide more extensive coverage, more                     
extensive parity, it would cost $7 per person, per year.  To                   
implement the federal law is a negligible cost.  Mr. Majoros                   
advised there has been minimal financial impact with the state's               
experiences that have implemented parity.                                      
                                                                               
MR. MAJOROS briefed the committee regarding the impacts on public              
sector costs.  He said many people with mental illnesses are forced            
to rely on Medicaid and adult public assistance because of their               
lack of private insurance options for mental illnesses.  He pointed            
out that other states' experiences have shown that by offering                 
insurance options in the private sector, you can reduce the                    
reliance on public assistance and Medicaid programs.  There can be             
some savings in the public sector as a result of this.                         
                                                                               
MR. MAJOROS then referred the committee's attention to the                     
composition of the task force on pages 2-3 of the committee                    
substitute which would be comprised of 11 members.  He emphasized              
there are many ways to address parity and the task force would                 
tailor an approach that is unique to the needs of Alaska, and make             
recommendations and bring them back to the legislature.  He noted              
there are no state general funds attached to the resolution which              
is stated in the resolution and that there cannot be state general             
funds.  He indicated the task force has been prefunded by the                  
Alaska Mental Health Trust Authority.  In conclusion, Mr. Majoros              
said there is a clear discrimination in health insurance toward                
mental illness.  The task force believes it is unwarranted and                 
there are many ways to successfully address parity which has been              
demonstrated by many states.                                                   
                                                                               
Number 1256                                                                    
                                                                               
REPRESENTATIVE GREEN asked Mr. Majoros if young children with                  
various afflictions, such as fetal alcohol syndrome, would be                  
eligible for mental health treatment, and if the task force will               
review the impact on the overall cost.                                         
                                                                               
MR. MAJOROS replied the task force will review it in terms of                  
whether it will be included or excluded.  Firstly, the task force              
would define what they consider to be mental illness, serious                  
mental illness and mental health consumer.  Within that definition,            
that would either set the scope narrow or broad, but that would be             
totally within the purview of the task force.                                  
                                                                               
Number 1319                                                                    
                                                                               
CHAIRMAN BUNDE called the next witness to testify before the                   
committee.                                                                     
                                                                               
MARY ELIZABETH RIDER, Planner, Alaska Mental Health Trust, advised             
the committee the trust has an interest in the task force because              
the trustees are interested on the appropriate funding for a                   
variety of services for trust beneficiaries and other people with              
special needs, in particular, the issue of private insurance                   
limiting some care versus not limiting other care.  The trust wants            
to understand the impact this kind of legislation could have if it             
is the right thing for Alaska to do or not.  Ms. Rider indicated               
the trust is interested enough that the trustees prefunded this                
with $50,000 in trust funds. She expressed the trust has a desired             
outcome for this project.  They are looking for increased clarity              
as policy and program development for mental health services to                
trust beneficiaries and to people who don't need to be on the state            
program.                                                                       
                                                                               
Number 1390                                                                    
                                                                               
JUDY EDWARDS came before the committee to testify.  She told the               
committee her son has a mental illness and has been hospitalized               
five times in the last year.  She said she will not be able to get             
insurance for her son from now on unless his condition goes away.              
She explained that her insurance company, CHAMPUS Tricare Insurance            
for the Military, has been difficult in providing services for her             
son who is out of state.  CHAMPUS recommended giving up custody of             
her son and she feels that is a discrimination because if her son              
had another type of disability such as blindness, they would not               
dare suggest something like this.  She said her son might be able              
to get some services with state funding.  She feels that her son               
should have access to any services that are out there, if there are            
any, regardless if she gives up custody.                                       
                                                                               
MS. EDWARDS informed the committee she has the safety of her other             
children to consider.  She explained that DFYS got involved because            
her son threatened to kill his sister, and that DFYS interviewed               
her son alone and suggested to her that if she could not keep her              
other children safe, they could take her other children from her.              
Ms. Edwards said she has nothing to gain from this except that she             
wants her son back in Alaska.  She said she understands this bill              
addresses parity but she wants the committee to understand the                 
prejudice against mental illness.                                              
                                                                               
Number 1624                                                                    
                                                                               
REPRESENTATIVE GREEN asked Ms. Edwards if her son is currently out             
of state and if this legislation were enacted, how would it help               
her get him back.                                                              
                                                                               
MS. EDWARDS replied it would help in the respect that when he comes            
back and is on Medicaid or with CHAMPUS, if the legislature reduces            
the prejudice in any way with mental illness, it will help her son             
in the long run and those kids like him.                                       
                                                                               
REPRESENTATIVE DYSON made a motion to move CSHCR 21, Version E, out            
of committee.  There being no objection, CSHCR 21(HES) moved out of            
the House Health, Education and Social Services Standing Committee.