WHAT WORKS
Although laws in 23 states now require parity benefits for the treatment of mental illness, they differ in many aspects. Eleven states have laws that do not provide parity, but do expand benefits for the treatment of mental illness. There are three types of laws.
Mental Health Parity Laws
Parity laws prohibit insurers from discriminating between coverage provided for mental illness and coverage for other physical disorders. Parity laws require insurers to provide the same level of benefits for the treatment of mental illness as for any other disease. Parity laws apply to visit limits [inpatient and outpatient], deductibles, copayments, and lifetime and annual limits.
Parity laws vary considerably. Some, such as Vermont's, provide broad coverage for all mental illnesses and for addiction treatment. Others---for example Hawaii---limit coverage to a specific list of biologically based, serious mental illnesses as defined by the Diagnostic and Statistics Manual of the American Psychiatric Association (DSM).
Minimum Mandated Benefit Laws
Many state laws require that some minimum level of coverage be provided for mental illness. They are not considered full parity because they allow insurers to offer different levels of benefits for mental and physical illnesses.
Mandated Offering Laws
Mandated offering laws do not require benefits to be provided at all. Instead, they require that an option of coverage for mental illness be offered. This option of coverage can be accepted, at a higher premium, or rejected. Other mandated offering laws require that, if benefits are offered, they must be equal. This option is similar to the federal parity law enacted in 1996 by Congress.
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