HCR 21 - PARITY FOR MENTAL HEALTH TASK FORCE Number 0900 CHAIRMAN BUNDE announced the next order of business would be HCR 21, "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.