Families fuel Michigan bills for parity in mental health insurance coverage

• Michigan families say they fight insurers to cover mental health care and substance abuse treatment.
• Two proposed laws would ensure that care is covered just as insurers cover other medical care and according to nationally recognized standards.
• Insurers, however, say some provisions would go too far, including a requirement that they find out-of-network care for a patient if an in-network provider isn’t available.

It took nearly $300,000 in out-of-pocket costs to save her son’s life, according to Claire Scerbak.

But Scerbak said she considers herself lucky. Many Michigan families can’ afford to pay bills for loved ones facing mental health and substance abuse crises. She said her family was forced to pay the cost of her son’s care when her insurer denied coverage. 

The Traverse City mother — whose son now lives and works out of state — is among Michigan family members pressing lawmakers to force insurers to pay for the kind of substance abuse treatment her son received.

Related: 

• In Michigan mental health crisis, a tug-of-war over too few social workers
• New psychiatric unit in northern Michigan to address severe care gap
• A new Michigan legislative committee on mental health gives parents hope
• Mental health crisis: Children at breaking point during COVID

A Democratic-sponsored House bill would require Michigan health insurers to cover medically necessary treatment of a mental health or substance abuse disorder just as they cover medical and surgical services, in line with national standards. The 2008 federal Mental Health Parity and Addiction Equity Act, which aimed to do the same thing, has fallen short, supporters of the House bill say.

The problem now, families have said, is insurers often turn down coverage, arguing that such care isn’t “medically necessary.” 

“There's nothing currently that talks about ‘What does it mean to say something isn't medically necessary?’” said Angela Kimball of the group  Inseparable, a Washington-based national organization fighting for so-called parity laws.

“What we're doing in this legislation is saying ‘Medically necessary has to reflect what the treatment provider community says is evidence-based effective care across the country,’” she said.

In other words, they would have to cover care as set out by accepted national guidelines, such as by the American Association of Community Psychiatrists and the American Society of Addiction Medicine, for example. 

The bill would further require insurers to find out-of-network services and emergency services — and cover them — if none are available in-network. It’s sponsored by State Rep. Felicia Brabeck, D-Pittsfield Township, a long-time mental health provider.

The bill was approved by the House Insurance and Financial Services Committee and now awaits a vote by the full House.

A related Senate bill, also Democratic sponsored, would incorporate the federal Mental Health Parity and Addiction Equity Act of 2008 into state law. By a 9-1 vote and without discussion Wednesday, the Senate Health Committee sent that bill to the full floor for a vote.

The 2008 federal law has long required insurers to cover mental health and substance use disorders treatment as they do other medical treatment and surgical procedures. Insurers, for example, must offer the same deductibles, copays and out-of-pocket maximums for mental health coverage as it does for other care.

The Michigan Association of Health Plans, which represents health insurers, supported the Senate bill, its executive director, Dominick Pallone, told Bridge Michigan Wednesday. But it opposes the House bill, calling it an overreach that will increase health care costs and “pick winners and losers.”

Requiring insurers to find and cover outside providers if none are available in-network is a difficult and costly requirement in a state with too few mental health workers, said Brian Mills, a spokesperson for the industry group.

Likewise, if there is no in-network provider to offer the appropriate level of care, the insurer would be required to cover more intense, higher-level of care.

If outpatient therapy isn’t immediately available in a person’s insurance network, the insurer might have to pay instead for more expensive inpatient care, for example, Mills said.
 

He said the bill is misleadingly portrayed as a parity bill when in fact it asks more of insurers than is required under the federal law. “This goes above and beyond” the federal law, he argued, in part, by ordering insurers to find out-of-network care for somebody.  

Mills also argued that insurers do, in fact, cover mental health care when employers buy such coverage. It’s possible, he said, that some employers choose plans for their staff that don’t include robust mental health services.

“We've asked the (House) sponsor (Rep. Brabec) to give us some examples of situations where your customers are experiencing access problems, coverage problems, in the commercial sector,” Mills said. “We're happy to sit down with them.”

David Lloyd, chief policy officer at the Kennedy Forum, a New Jersey-based nonprofit that advocates for state laws to ensure mental health parity, said the 2008 federal parity law, on its own, has no teeth. 

Under the federal law, “you have to prove that there’s active discrimination going on, and you have to show that exactly what they’re doing violates the very specific requirements” of the law, said Lloyd, who was in Lansing this week lobbying in support of the House bill. “It's really difficult to establish that there's active discrimination going on.”

Michigan families have long complained that insurers repeatedly deny mental health coverage by dismissing it as not “medically necessary.”

Allyson Haupt of Rochester recounted battling her insurer over $147,000 in bills she faced for temporary hospitalization and in-home applied behavior analysis therapy for her then-young son, who has autism. 

“It took a little more than two months of me fighting to get that bill overturned, and it was pretty much like a full time job in itself,” Haupt said. 

Unable to regulate emotions, she said her son would fly into rages — outbursts that grew in intensity as he aged. In first grade, he broke his mother’s nose, Haupt said in a video paid for by Inseparable.

She said the bills were eventually covered by the insurer but only after she contacted a local TV station, which reached out to the company. The story never aired, Haupt said, but the insurer then told the family it would cover all but about $300 of the bills.

In July, the Biden administration proposed rules to tighten loopholes and force insurers to better document how they authorize coverage to prove they are ensuring equal access to mental health care.

Haupt said her son, now 15, is better able to control his feelings.

“We were fortunate that I didn't have to work outside the home during that time,” Haupt said, referring to the hours she spent communicating with insurance representatives and trying to find care.

Haupt and other supporters of the bill spent the day in Lansing Tuesday talking with lawmakers. 

Among them was Sarah Matthews, a peer recovery coach at Live Rite Structured Recovery Corp., a nonprofit treatment center that opened in 2019 in Roseville, near Detroit.

The center is funded by grants that are temporary, she said. Insurance reimbursements would ensure stable funding and keep its doors open, Matthews said. 

“We need this in Michigan because, if (people with mental health and substance abuse issues) don't have access to the services, (they will) end up homelessness, reentering hospitals, and reentering the jails,” she said. “We see how the services can alter that.” 

Scerbak, the Traverse City mother, said ensuring reliable insurance coverage for mental health and substance abuse services not only protects vulnerable patients, it saves taxpayers money spent on hospitalization, incarceration, social services and the greater economy as the lives of people with mental illness or addiction spin out of control.