Legislature(1997 - 1998)

04/30/1997 09:16 AM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
         SCR 14 PARITY FOR MENTAL HEALTH TASK FORCE                          
 Number 161                                                                    
  CHAIRMAN WILKEN  announced that  SCR 14  would be the next order of          
 business before the committee.                                                
  WALTER MAJOROS , Executive Director of the Alaska Mental Health              
 Board (AMHB), noted that AMHB requested that legislation regarding            
 mental health parity in Alaska be introduced.  The AMHB is the                
 state planning and advocacy organization for seriously mentally ill           
 and emotionally disturbed children and adults in Alaska.  The AMHB            
 strongly endorses SCR 14.  Mr. Majoros explained that parity refers           
 to parity of insurance practices for mental health services to                
 receive parity with those receiving physical health services                  
 through insurance coverage.                                                   
 Mr. Majoros estimated that since 1995, 31,000 Alaskans, adults and            
 children, suffer from serious mental illnesses and emotional                  
 disturbances.  Many of these people require a range of mental                 
 health treatment services, from counseling, medication, case                  
 management, rehabilitation, crisis intervention, assessment,                  
 hospitalization, evaluation, etc.  In most cases, private insurance           
 does not cover mental health services and in the case that it does,           
 the services are very inadequate and the restrictions are greater             
 than that imposed on physical health services.  Mr. Majoros stated            
 that the AMHB believes this to be a form of bias and discrimination           
 against those with mental illnesses and emotional disturbances.               
 There has been tremendous change in the efficacy of mental health             
 treatment.  Mental health treatment now parallels physical health             
 treatment in terms of the ability to diagnose and treat.  Further,            
 the developments of recent years provide a more cost effective                
 method of treatment.                                                          
 Number 224                                                                    
 Mr. Majoros informed the committee that many mentally ill persons             
 have testified that they cannot afford to get a job because they              
 would have to go off Medicaid which funds mental health services.             
 Mr. Majoros pointed out that the mental health system supports                
 remaining on public assistance, Medicaid.  If these individual's              
 had the opportunity to receive basic coverage through private                 
 insurance, then there would not be the dependence on public                   
 programs.  Parity would decrease the reliance on public assistance            
 as well as creating a greater partnership between the public and              
 private sector in terms of meeting mental health needs in Alaska.             
 Mr. Majoros noted that much of SCR 14 is based on the federal                 
 legislation, the Mental Health Parity Act of 1996.  The Mental                
 Health Parity Act is the first national parity legislation that has           
 been passed.  Furthermore, the Mental Health Parity Act establishes           
 a requirement for parity on lifetime and annual dollar limits for             
 expenditures for mental health services for recipients of all                 
 insurance programs, but with many exceptions.  Mr. Majoros                    
 mentioned that small businesses of 50 or less employees are exempt            
 from the program.  Furthermore, there is no requirement to have               
 mental health coverage; an employer could choose not to have such             
 coverage or drop that coverage.  Employers can adjust co-insurance,           
 deductibles, service and medical necessity definitions all of which           
 can be different from those for physical health services.  If                 
 employers can document that the net increase in premiums are                  
 greater than one percent, the employer can be exempt.  Mr. Majoros            
 believed that this could be the beginning of parity, but recipients           
 of mental health services are not parallel with recipients of                 
 primary health care services.  Therefore, Mr. Majoros indicated the           
 necessity for a task force to review the federal legislation.                 
 Number 274                                                                    
 Mr. Majoros informed the committee that 13 states have passed or              
 proposed mental health parity laws and in total 35 states are                 
 considering this issue.  SCR 14 is an opportunity to create a                 
 public-private partnership to transfer some of the cost for mental            
 health services to the private sector which can save money.  The              
 present situation is an obstacle for mental health consumers and              
 beneficiaries to become independent.  Currently, those folks are in           
 a double bind, in other words, those folks cannot get off Medicaid            
 coverage nor can they get a job because there is no private sector            
 insurance to meet their needs.  SCR 14 would eliminate the view               
 that mental health services are different than primary health care,           
 it is part of primary health care.                                            
  SENATOR WARD  inquired as to who was responsible for drafting SCR 14         
 and who determined the make-up of the group.   WALTER MAJOROS                 
 explained that he was part of a group of people reviewing drafts.             
 The make-up of the task force was determined by the group, not                
 anyone specific.  Currently, the trend is to have as many mental              
 health consumers on the task force.  This resolution was modelled             
 somewhat after resolutions in other states.                                   
 Number 319                                                                    
  SENATOR GREEN  informed the committee of a conflict due to her               
 husband's employment and requested that she not be required to                
 vote.   SENATOR WARD  objected.  Therefore, Senator Green will be             
 required to vote.                                                             
  SENATOR GREEN  noted that her staff had discussed with the AMHB the          
 possibility of the AMHB creating its own task force, to which there           
 did not seem to be a problem.  Senator Green said that when she was           
 on the Governor's Council for Handicapped & Gifted, the council               
 dealt with many issues that were similar to this.  The council                
 joined with other boards to report on health care; is that possible           
 with this?   WALTER MAJOROS  agreed that there are many issues that           
 AMHB and the Governor's Council take up independently.  The task              
 force was chosen because it is a national model.  Furthermore, it             
 is difficult to generate a consensus on major mental health issues.           
 Mr. Majoros emphasized the importance of having the Legislature's             
 involvement and endorsement from the start in order to increase the           
 likelihood of passing the legislation and building consensus.                 
  SENATOR GREEN  believed that the task force could be accomplished            
 through the AMHB without a resolution.  Senator Green suggested               
 that course be taken.                                                         
   In response to Chairman Wilken,  WALTER MAJOROS  stated that he was         
 the Executive Director of the AMHB.                                           
  CHAIRMAN WILKEN  noted that SCR 14 does not expect any General Fund          
 money to be provided for the task force.  Is there federal or other           
 state money available for those expenses?   WALTER MAJOROS  deferred          
 to Jeff Jessee from the Alaska Mental Health Trust Authority.                 
 Several discussions have occurred with the authority who supports             
 the task force, although there is no guarantee that the authority             
 would be involved with the cost of the task force.  Mr. Majoros               
 mentioned that the AMHB will do a formal proposal to the authority            
 during its budget process this year.                                          
 Number 381                                                                    
  JAN MCGILLIVARY , CEO of the Alaska Mental Health Association(AMHA),         
 informed the committee that she was the Coordinator for the                   
 Building Bridges Campaign for mental health.  The coalition                   
 represents about 40 community based mental health services which              
 are grantees of the Division of Mental Health & Developmental                 
 Disabilities.  Ms. McGillivary supported SCR 14 and the attempt to            
 join the national movement on this issue.  Ms. McGillivary was sure           
 that the task force will find that overall use of medical benefits            
 will drastically decrease once discrimination is eliminated from              
 the insurance benefits arena.                                                 
  PETER BRAVEMAN , Family Centered Services of Alaska, informed the            
 committee that he had a mentally ill sister in another state and              
 would be speaking from that perspective as well as a provider.                
 Current insurance company practices discriminate against consumers            
 which perpetuates the stigma consumers and families live with.  Mr.           
 Braveman stated that his sister receives woefully inadequate                  
 services, costly, and crisis driven services.  Often his family               
 does not interrupt a crisis for his sister because insurance                  
 benefits will run out or the insurance does not cover actions until           
 in crisis.                                                                    
 As a provider, Mr. Braveman sees consumers that do not have a                 
 choice when the insurance ends and the consumer must use publicly             
 funded grantees and have limited access to other community                    
 providers.  Such situations tax public mental health providers.               
 Mr. Braveman supported SCR 14.                                                
 Number 427                                                                    
  DON DAPCEVICH , Executive Director of the Advisory Board on                  
 Alcoholism & Drug Abuse, noted that the Advisory Board on                     
 Alcoholism & Drug Abuse has an interest in being part of the task             
 force.  This issue is equally important for chemical dependency               
 programs as for mental health programs.  Mr. Dapcevich indicated              
 that the Mental Health Trust Authority would be interested in                 
 chemical dependency being added to the task force.  Mr. Dapcevich             
 encouraged the committee to include chemical dependency as a                  
 participant in the task force.  During this era of welfare reform,            
 quality services both in the private and public sector are                    
 necessary and SCR 14 would be a vehicle for that.  Private sector             
 involvement in chemical dependency has significantly diminished in            
 Alaska due to the insurance practices of the predominant carriers.            
 The predominant carriers have severely restricted access to the               
 resources of insurance companies for third party payments.                    
 Mr. Dapcevich noted that this would require minimal costs.  In                
 terms of insurance premiums to include mental health and chemical             
 dependency treatment services, Mr. Dapcevich had received two                 
 different studies which reported that the cost ranges from .4                 
 percent to .7 percent increase in premiums.  This is a minimal cost           
 when considering the quality of services and the decrease in                  
 dependency on public funded services.  Mr. Dapcevich reiterated the           
 need to include chemical dependency and noted that he would provide           
 the committee with a letter with the specific language changes to             
 the resolution to include chemical dependency.                                
  RAY GILLESPIE , Charter North Star Behavior Health Systems,                  
 supported SCR 14.  Gathering the facts about parity is good public            
 policy.  Mr. Gillespie said that he did not have any preconceived             
 notions regarding the findings, conclusions, or resulting public              
 policy recommendations.  With regard to why this task force could             
 not be done by a private organization, Mr. Gillespie believed that            
 the findings would be more credible if the findings came from a               
 group such as the Parity Task Force established by the Legislature.           
  CHAIRMAN WILKEN  announced that SCR 14 will be held to the next              
 scheduled meeting.  With regard to Senator Ward's question about              
 the authors of SCR 14, Chairman Wilken informed the committee that            
 those involved were Mr. Majoros from the AMHB, Ms. Macklen from the           
 Coalition of Mental Health Organizations, and Mr. Jessee from the             
 Mental Health Trust Authority.                                                
  JEFF JESSEE , Alaska Mental Health Trust Authority, said that the            
 trustees are supportive of exploring mental health parity.  The               
 resolution may allow the possibility to review strategic options              
 for introducing parity legislation.  SCR 14 has the potential to              
 significantly increase the availability of mental health services.            
 The trustees view the resolution as a way to spread some of the               
 risk across a larger constituency and perhaps, reduce the fiscal              
 demands on both the state General Fund and on the Trust Authority             
  CHAIRMAN WILKEN  said that SCR 14 would be held.                             

Document Name Date/Time Subjects