SCR 14 - PARITY FOR MENTAL HEALTH TASK FORCE CHAIRMAN WILKEN announced this issue was considered last session, and then reviewed by a steering committee of participating organizations. The steering committee's recommendations were incorporated into CSSCR 14(HES), version F. SENATOR LEMAN moved to adopt CSSCR 14(HES), version F, as the working document of the committee. The motion carried with no objection. There being no discussion, the committee took testimony. WALTER MAJOROS, Executive Director of the Alaska Mental Health Board, stated the Alaska Mental Health Board brought forth this legislation in partnership with the Building Bridges Campaign for mental health consumers. He reviewed the changes in the committee substitute as follows. The first change is to the representation on the task force and who is responsible for the appointments. Senator Ward's concerns were addressed and the task force will have broad representation. The legislation states that there will be no expenditure of state funds to support the task force; the Alaska Mental Health Trust Authority has pre-funded the task force in the amount of $50,000. The purpose of the resolution is to create the task force to study the issue of parity; not to introduce parity legislation. MR. MAJOROS made the following comments about the issue of parity. Congress passed the Mental Health Parity Act of 1996, which is a step in the direction of equalizing mental health care coverage with physical health care coverage. Currently 90 percent of insurance coverage offers a higher level of benefits for physical health coverage than for mental health coverage. The federal legislation equalizes lifetime and annual benefits only. It does not obligate employers to provide mental health coverage and contains no rules regarding deductibles, co-payments or out of pocket limits. Because of these limitations, 15 states have passed mental health parity legislation and 25 others have introduced legislation in the past year. Because of this activity many new studies have been conducted. Those studies are reporting either no, or a nominal, increase in cost. The Rand Study showed that equalizing annual limits is costing $1.00 per person per year. Comprehensive coverage is costing $7.00 per year per person. Most states are finding there is no need for differential treatment of people with mental illnesses versus people with physical illnesses. The basic belief is that mental illnesses are treatable brain disorders in a cost-effective manner, and in many cases are treated with a better success rate than physical illnesses. He asked committee members to support the resolution. SENATOR LEMAN referred to the section of the resolution that contains the cost of mental health disorders to the American economy, and asked if any figures are available specific to Alaska. MR. MAJOROS said he believes the state would reflect the national trend. SENATOR LEMAN thought the number might be in the tens to hundreds of millions for Alaska. MR. MAJOROS stated some people with mental illnesses are unable to leave medicaid coverage to take jobs in the private sector because if they do so, they lose mental health coverage for medications. Private insurance coverage often does not cover those medications. SENATOR LEMAN asked that an estimate be calculated for Alaska. MR. MAJOROS said he would attempt to do so. SENATOR GREEN asked if Alaska complies with the federal legislation he referred to. MR. MAJOROS answered that legislation just became effective January 1,1998, so no track record of compliance has been established yet. In order for an organization to request an exemption, it must demonstrate six months of providing the coverage. CHAIRMAN WILKEN noted he passed out the synopsis of the federal legislation to committee members. SENATOR GREEN asked if a large corporation that provides coverage for its employees is able to opt out if it can show an increase in costs. MR. MAJOROS explained there are many ways an organization can opt out under the federal legislation. Businesses with 50 or less employees can choose to not carry mental health coverage. Businesses with more than 50 employees can get an exemption if they can demonstrate that their costs increased by greater than one percent. SENATOR GREEN questioned whether the consequences of the possibility of many businesses opting out of the program completely has been reviewed. MR. MAJOROS replied that Senator Green's concern demonstrates the need to take a look at how the federal legislation may impact Alaska and how to best respond to that legislation. SENATOR GREEN said she is very fearful that the task force will begin to mandate mental health coverage if a large number of businesses opt out. The Legislature has mandated insurance coverage of three or four procedures since she has been in office, and she believes establishing a piecemeal approach to national health insurance is wrong. MR. MAJOROS pointed out that he worked directly with Senator Ward regarding the composition of the task force and who will be appointed by the Legislature. He believes that composition reflects a balanced and consensus-building approach. SENATOR WARD confirmed that he did work with Mr. Majoros on that provision of SCR 14 but he agreed with Senator Green's concern. MR. MAJOROS responded this resolution establishes a task force to study the issue. If the task force came to that conclusion, it would bring that information to the Legislature for its consideration. SENATOR GREEN noted the clause that states that a simple majority of the members of the task force constitute a quorum for the transaction of business, and all actions of the task force shall require the affirmative vote of a majority of the members present, requires only four votes to create a majority. She asked if this language is typical for task force business. MR. MAJOROS answered that the Steering Council took standard boiler plate language for task force construction and its decision making process. CHAIRMAN WILKEN stated the resolution will be held in committee and that question can be answered before the next hearing. SENATOR WARD said it was his understanding that task force members can participate via telephone and teleconference. MR. MAJOROS said nothing in the resolution prevents it. CHAIRMAN WILKEN said staff will follow up on that concern also. JAN MCGILLIVARY, Chief Executive Officer of the Alaska Mental Health Association (AMHA), and coordinating agency leader for the Building Bridges Campaign for Mental Health, gave the following testimony. The issue of mental health parity is not new to those who work in the field. Two efforts to champion parity by AMHA have failed in recent years. The issue has been studied extensively by the National Mental Health Association, the National Alliance for the Mentally Ill, the Bazelon Law Center and the National Institute of Mental Health. She hoped the committee will advance the bill so this issue can be studied in earnest and produce an up-to-date report. Numerous recent reports make the statement that the increased costs to the employer in regard to insurance benefits is generally less than one percent. Also when mental health coverage is on par with physical health coverage, after a five to ten year period, the industry perceives an overall decline in the use of the mental health benefit overall. SENATOR GREEN remarked that when she was on the Governor's Council, the federal definition of "developmentally disabled" changed. She asked if the state has a definition of the scope and types of illnesses that would be covered and whether that includes those who have developed mental illnesses as the result of alcohol and substance abuse. MS. MCGILLIVARY answered that over the year during the Alaska Mental Health Association's Lands Trust litigation, this question was on the front burner. Judge Green finally answered the question when she defined the beneficiary group for the Trust Authority. She said when she thinks of mental health parity, she is thinking of people who experience major mental illnesses, and alcoholics with psychosis qualify under that definition. SENATOR GREEN asked if it would detract from this resolution to include limiting language. MS. MCGILLIVARY did not know. Number 047 MARY ELIZABETH RIDER, a planner for the Mental Health Trust Authority, stated last summer, when the Trust was making its budget recommendations for fiscal year 99, the Mental Health board brought up the concept of a task force. The Trust is interested in supporting a study conducted by a diverse task force of the type proposed, to help make decisions about the best way to finance mental health services. She offered to take questions back to the Trust members from the committee. BOB IRVINE, the Chief Executive Officer of Lifequest, the community mental health center in the Mat-Su Borough, testified in support of SCR 14. Throughout his career with the mentally ill he has found that population has has been stigmatized by the work force and insurance industry. When behavioral health and physical health are integrated, an overall savings occurs on total health care costs. The artificial boundary between body and mind is disappearing and people are realizing they need to be treated together. In terms of the cost of mental illness to the State of Alaska, the Alaska Mental Health Association has been in a leadership position with the depression awareness treatment campaign for many years. If established, the task force could answer that question. The cost of depression alone is enormous when one factors in the number of lost work days, the amount of lost work productivity, and the effect on family members. TAPE 98-7, SIDE A DON DAPCEVICH, Executive Director of the State Advisory Board on Alcoholism and Drug Abuse, made the following statements. The Board supports the formation of this task force, although it has not taken a position on the issue of whether parity should occur, and in what form. The Board encourages the Legislature to form a task force to look at the issues involved. The Board's concern is access to services for Alaskans, in the best way possible. The insurance limitations placed on services provided for clients has effectively discouraged the private, for-profit market from providing services in Alaska. He imagined the Board would support parity, but only if it is cost-effective. CHAIRMAN WILKEN agreed with Mr. Dapcevich and said he couldn't imagine the task force would convene and not quantify the issue. SENATOR GREEN suggested requiring it to do so. GINA MCDONALD, representing the Division of Mental Health and Developmental Disabilities, DHSS, stated support for SCR 14. The Division is not taking a position on parity, but believes it is important for the task force to study the issues of cost and equity and to establish and informed process for decision making. CHAIRMAN WILKEN noted there was no more discussion or testimony on SCR 14, and that it was his intention to hold the legislation until next Wednesday to work on several changes. He announced there would be no meeting scheduled on Monday, and informed committee members that he and Senator Ward attended a demonstration the previous day on a new machine that, through ion and microprocessor technology, can discover the presence of illicit drugs being brought into the State. He hoped the Legislature has the ability and creativity to help our communities to get more of the machines because they are truly a deterrent to drug trafficking. He adjourned the meeting at 10:50 a.m.