Mental Health Parity Bill Clears The Legislature

August 28, 2008
Contact: Rodney Foo @  (408) 282-8920
Assembly Bill 1887 mandates health insurers expand coverage for mental illnesses and substance abuse

Landmark legislation to bring help to Californians who are denied treatment for an addiction or mental health illness by their health insurance was passed by the Assembly today.

Assembly Bill 1887, introduced by Assembly Member Jim Beall, Jr., was approved on a 42-29 vote, and now awaits the Governor’s signature to become law. The bill requires health insurers to provide equal treatment and coverage for mental health disorders and substance abuse just as they do for physical injuries and illnesses.

“Thousands of Californians trapped by a mental health disorder or by substance abuse find they are unable to get help because their health insurance won’t pay for their treatment,’’ Beall said. “AB 1887 eliminates the unequal and unfair status mental health and substance abuse illnesses have in comparison to the treatment of other health conditions.’’

AB 1887 not only expands medical coverage to include mental illnesses and substance abuse to the 18 million Californians who have health insurance, but it will also save state and local governments millions in taxpayer dollars currently spent to cope with the mentally ill who are homeless and those who become incarcerated.

By enabling people suffering from mental health disorders to obtain early treatment and therapy, the state can reduce or stabilize a prison population that has been burgeoning. A U.S. Department of Justice report in 2005 found more than half of prison inmates across the country and more than 60 percent of jail inmates have mental health problems.

The cost to add this coverage to health insurance is inexpensive; annual premiums would only increase by $3 to $6, according to a California Health Benefits Review Project analysis requested by the Legislature.

Currently, health insurers either do not provide coverage for mental health illnesses or restrict the types of disorders that will be treated. Most insurers who do offer treatment limit the lifetime services to $50,000 compared with $1 million for other services.

In 1999, the state enacted legislation to require health plans and insurers to cover severe conditions, including bipolar disorders, schizophrenia, anorexia and bulimia. Beall’s bill expands the coverage to include moderate disorders as well as substance abuse. Researchers have discovered that mental disorders are often accompanied by substance abuse problems – AB 1887 stops insurance companies from “cherry-picking’’ which illnesses they will cover and gives people the resources to regain their lives.