Parity Remains a Work in Progress for

MARCH 2019

Despite more than two decades of efforts to bring parity to insurance coverage for behavioral health, many Coloradans are still not guaranteed benefits for substance use disorders that are comparable to coverage for physical health.

Governor , elected in November, promised that his office would direct the Division of Insurance Three Takeaways (DOI) to strengthen enforcement of federal and state laws requiring parity in insurance coverage of mental • Colorado’s legislature and the U.S. Congress and physical health care. have passed a series of laws to require parity between behavioral health and physical Colorado has taken a series of steps to level the health coverage in the past 25 years. playing field over the last decade. • Two million insured Coloradans still do The state has increased access to behavioral health not have guaranteed access to covered through Medicaid expansion, added substance use behavioral health services, including disorder benefits to Medicaid, invested in integrating substance use disorder. physical and behavioral health in primary care • Offering comparable coverage for behavioral practices and elsewhere, and explored strategies to health services may seem simple, but parity reform the health care payment system. laws have proven to be complex and difficult to implement and enforce. Despite this progress on the state level and the passage of a federal parity law in 2008, an estimated 430,000 Coloradans aren’t getting the help they need overdose deaths, parity laws provide one possible for substance abuse, an increasingly common and way for the legislature to intervene. This report from often deadly behavioral health disorder.1 the Colorado Health Institute examines the advances and shortcomings of current parity laws and the As Colorado struggles with a record number of implications for substance use treatment. Federal and State Action on Parity Addiction Equity Act (MHPAEA), the most important federal law affecting substance use treatment Parity laws require insurers to provide the same level to date, required large group health plans that of benefits for behavioral health conditions as for provide substance use and mental health treatment physical health care. These benefits might include the benefits to do so at the same level as their medical number of covered visits, deductibles, copayments, and surgical care benefits.3 It required, among and lifetime and annual limits.2 other things, that payments and visit limitations for State and federal laws to promote parity have behavioral health benefits must be comparable to evolved over time. (See Figure 1.) medical and surgical benefits. In 1996, the U.S. Congress passed the Mental Health The MHPAEA was a significant step in promoting Parity Act, which required comparable annual and parity. However, it stopped short of requiring all lifetime dollar limits for mental and physical health insurers to cover behavioral health services. care. Colorado enacted its own parity law in 1997 In 2010, the Affordable Care Act (ACA) expanded (HB 97-1192), which required group health plans to parity in two ways. First, it extended MHPAEA cover treatment for six mental illnesses, including protections to insurance plans that had not been schizophrenia and major depressive disorder, at the covered under previous laws. Second, it required same level as physical illness. It did not require health individual market and fully insured small group plans plans to cover treatment for substance use disorders. to cover substance use disorder and mental health That changed in 2007, when Gov. Bill Ritter and the services as part of the law’s essential health benefits legislature updated the law to include additional package. (See Figure 1 for a timeline of these laws.) mental illnesses, such as post traumatic stress disorder, along with drug and alcohol disorders. Even with these laws, in 2019, not all insurance plans are required to cover substance use disorder and In 2008, the federal government updated and mental health services at the same level as physical expanded its parity law. The Mental Health Parity and health. The ACA did not require Medicare or self-

Figure 1. Timeline of Laws Affecting Parity in Colorado 1996 1997 2007 President Bill Clinton signed the Mental Colorado Gov. signed Colorado Gov. Bill Ritter signed Health Parity Act, which required large HB 97-1192 into law. This law HB 07-036 into law. This law group insurance plans to not set higher required insurance companies mandated health insurance to dollar limits for mental health services to cover six biologically based cover more behavioral health if the services were offered, but did not mental disorders. Substance use services, including drug and require them to cover the services. disorders were not included. alcohol treatment, at parity. 2008 2009 2010 President George W. Bush Ritter expanded Medicaid in The Affordable Care Act (ACA) signed Mental Health Parity and Colorado to parents with incomes extended MHPAEA requirements Addiction Equity Act (MHPAEA), at or below the federal poverty level to additional types of plans and a landmark law that expanded and very low income adults without required individual market and parity and included substance use children, increasing access to small group plans to cover mental treatment. covered behavioral health services. health and substance use services. 2013 2014 Gov. signed HB13-1266 into law to Under Hickenlooper and in the wake of the Affordable align Colorado law with federal law, requiring that Care Act, Colorado again expanded Medicaid, individual, small group, and large group plans cover increasing access to behavioral health services. mental health and substance use treatment.

2 Colorado Health Institute Parity Remains a Work in Progress for Colorado MARCH 2019

Figure 2. Parity Requirements for Mental Health and Substance Use by Insurance Plan Required to Provide Parity Laws Insurance Plan Coloradans Included Behavioral Health Services Apply Medicaid/CHP+ Yes Yes 1,143,000 Individual Yes Yes 437,000 Small Group Plans Yes Yes 383,000 Fully Insured Large Yes Yes 992,000 Group Plans Self-Funded Large No Can Opt Out 1,300,000 Group Plans Medicare No No 776,000 Source: Colorado Department of Regulatory Agencies. (2018).4

funded large group plans, in which employers There are no data that show exactly how many assume direct financial responsibility for insurance people in Colorado lack equal coverage for physical claims, to cover essential health benefits. And if self- and behavioral health care. But about two in five insured plans do cover essential health benefits, they insured Coloradans have health plans that are can still opt out of MHPAEA’s parity requirement.5 exempt from the parity requirements. (See Figure 2.) State Efforts to Expand Behavioral Colorado law requires fully insured large group plans Health Care to provide coverage for behavioral health services, but self-funded plans are regulated by the federal Colorado has taken steps beyond parity requirements government and are not mandated to cover these to help people with behavioral health conditions. services. Medicare is also excluded from Colorado’s requirement. MHPAEA, the federal parity law, does In 2014, Colorado extended Medicaid eligibility to not apply to Medicare, and self-funded employer lower-income childless adults, which brought more plans can opt out of MHPAEA requirements. than 439,000 additional people into the program.6 At the same time, Colorado expanded the substance Just about a quarter of Coloradans are covered use disorder services that Medicaid covers to include by self-funded employer sponsored insurance medication assisted treatment, peer advocate plans, according to data from the Colorado Health services, and other items. It also raised the payment Access Survey and the Colorado Insurance Industry limits on services such as counseling and drug Statistical Report.7 And an estimated 776,000 screenings. Coloradans are covered by Medicare.8 Together, this is 2 million people — or 41 percent of Another large initiative, the Colorado State the total insured population in Colorado — who are Innovation Model (SIM), is a $65 million federally not guaranteed equal benefits for behavioral and funded program to help primary care providers physical health. It is worth noting that some of those integrate behavioral health services into their people likely have insurance plans that abide by practices, including substance use disorder MHPAEA requirements. treatment. These and other efforts have expanded insurance coverage for and access to behavioral An additional 350,000 Coloradans – about 6.5 health services for many Coloradans. percent of the state’s population – do not have health insurance coverage at all.8 Parity Laws Leave Many Behind Enforcement: Spotty but Improving Still, not all Coloradans have comparable coverage for their behavioral and physical health needs. Even for a state that has been advancing parity

Parity Remains a Work in Progress for Colorado Colorado Health Institute 3 for decades, implementing and enforcing parity is Figure 3. Fewer Colorado Substance Use Treatment difficult in practice. Facilities Are Accepting Self-Pay Only 40% Parity laws are complicated. Even if insurers are working to follow the law, they may have a hard time determining equivalent services or enrolling enough 20% treatment providers into their networks. 34% 23% In other cases, insurance providers may say that they 0% cover behavioral health services equivalently to physical 2007 2017 health, but they may not always follow through in n Percentage of treatment facilities accepting self-pay only practice. When this is the case, the onus falls on the person 10 needing treatment to advocate for themselves to get the Source: National Survey of Substance Abuse Treatment Services. (2017) care they need. It is hard to know how often insurers are not following parity laws without clients reporting when The DOI reviews and approves hundreds of health insurers are not covering the services they need. plans every year. In the past three years, it flagged Advocacy groups such as Mental Health Colorado note three plans for violating parity requirements. The DOI that people often wait much longer for a behavioral also secured a federal grant to conduct a deeper health appointment than they do for a physical health market exam of Colorado insurers. That report is appointment. Patients also report having to get a expected by fall 2019. preauthorization from insurance providers for certain In 2018, Colorado’s legislature created the Office of behavioral health services, or getting treatment for the Ombudsman for Behavioral Health Access. This acute behavioral health needs that is discontinued after independent office helps Coloradans resolve behavioral the patient is stabilized even if the patient may have an health access and coverage issues. This includes helping ongoing need. consumers with parity complaints and reporting on Legislature Brings Renewed Attention parity enforcement. The legislature and regulators are starting to take The ombudsman will provide resources for Coloradans notice. The DOI released a report in early March seeking behavioral health treatment and help take some describing its increasing efforts over the past several of the onus off people who need services to advocate for years to enforce parity requirements.9 themselves against their insurance company.

Figure 4. Substance Use Treatment Facilities Accepted More Types of Insurance Coverage in 2017 Compared to 2007 100%

80%

60%

40%

20%

0% Self-Pay Private Insurance Medicaid Medicare n 2007 n 2009 n 2011 n 2013 n 2015 n 2017 Source: National Survey of Substance Abuse Treatment Services. (2017). 10

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Figure 5. Admissions in Colorado’s Substance Use Treatment Facilities Have Remained Steady for the Past Decade 90,000 80,000 24% 24% 29% 29% 32% 37% 70,000 26% 26% 27% 27% 60,000 34%

50,000

40,000 76% 76% 73% 73% 71% 71% 68% 30,000 74% 74% 66% 63% 20,000

10,000

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 n Alcohol n Other Substances Source: Treatment Episode Data Set. (2016) 11

More Treatment Facilities Accept Despite the improvements in access, the number of treatment admissions for substance use in Colorado Insurance, But Use Remains Flat has not changed much in the past 10 years (see Figure Federal and state parity laws and the ACA require 5), staying roughly between 80,000 and 90,000 insurers to pay for behavioral health services, but they do admissions annually.11 Alcohol accounts for about not ensure that treatment facilities accept insurance or three times as many treatment admissions as all that patients access the care they need. other substances combined. Current laws do not require substance use treatment facilities to accept insurance. Still, more facilities in What Does This Mean for Colorado accept insurance than just a decade ago. Coloradans? Prior to the MHPAEA, a third of substance use treatment facilities in Colorado (33.6 percent) did not accept any Parity is not the only barrier to behavioral health form of insurance. By 2017, just 23.1 percent of facilities – care. But there continue to be opportunities for policy one in four – accepted only self-pay patients. While this growth in promoting parity. is an important improvement, 88 of the 381 reporting facilities still do not accept any sort of insurance.10 (See Federal Law: The federal government regulates self- Figure 3.) funded plans, the largest contributor to the lack of guaranteed behavioral health access in Colorado. If As benefits improved for Medicaid members in Colorado, the federal government were to mandate that self- access to substance abuse treatment improved as well. funded plans comply with MHPAEA requirements or More than half (56.7 percent) of licensed substance provide essential health benefits, it could expand abuse treatment facilities in the state accepted Medicaid access to substance use treatment for about 1.3 in 2017 — up from 35.7 percent in 2007.10 (See Figure 4.) million Coloradans.

Parity Remains a Work in Progress for Colorado Colorado Health Institute 5 Barriers to Accessing Behavioral Health Care A lack of insurance coverage for substance use disorder has historically been a barrier to treatment for many Coloradans. Coverage expansions and parity laws have helped extend access to a large group of Coloradans, but many still lack coverage that would ease access to treatment. And many of those with coverage still do not seek treatment, as is evidenced by the lack of growth in treatment admissions even as coverage has improved. Nearly 6 in 10 (59.2 percent) Coloradans who Why? Cost remains a concern. In 2017, just didn’t access needed drug or alcohol services over half (52.8 percent) of those who didn’t said it was because they were concerned access needed substance use services reported about what would happen if someone found thinking their health insurance wouldn’t cover out or they were uncomfortable talking with a substance use treatment. And 54.1 percent were professional about this issue.8 concerned about the cost of treatment.8 There is no perfect solution. But there are ways And policy changes and new laws do little to improve access and support Coloradans to address the largest barrier to accessing who need or want treatment for substance use substance use treatment in Colorado: stigma. disorders. Here are some options:

Insurance Public Integrating literacy awareness health Teaching and services consumers education One challenge in enforcing about insurance campaigns parity is the complexity of the coverage is an important Preventing and reducing health care system and the step to helping people get stigma towards people lack of integration between the care they need. This will seeking substance use physical health and behavioral require clear information and disorder treatment is another health services. The Colorado transparency about co-pays opportunity to reduce barriers State Innovation Model (SIM), and other costs, plus efforts to to care. The Colorado Office for one, aims to improve help consumers understand of Behavioral Health created health outcomes for patients their rights. The Colorado a public awareness campaign by providing more integrated Consumer Health Initiative has called Lift the Label that is physical and behavioral created CoveredHQ — a one- designed to reduce stigma health care through a range of stop-shop for health insurance associated with substance use statewide and local initiatives. literacy resources. disorders.

6 Colorado Health Institute Parity Remains a Work in Progress for Colorado MARCH 2019

State Law: Colorado could mandate that insurers more people a way to get the help they need. Today, provide compliance details and publicly share their most substance use treatment facilities accept some efforts to improve access to behavioral health care. type of insurance.

Workforce: Having an adequate network of But insurance coverage is not the only barrier to substance use treatment providers is critical for treatment. Too many Coloradans report that stigma putting parity into practice. Yet the Substance Abuse and persistent cost concerns prevent them from seeking and Mental Health Service Administration has treatment they need for substance use disorders. cited high turnover rates, low pay, and a shortage Still, there is room for the state to increase the of professionals as contributing to a behavioral enforcement of federal and state laws and to build health workforce shortage.12 A 2017 Keystone Policy workforce to ensure that there is true parity in Center analysis looked at detox providers, residential coverage for behavioral health and physical health treatment providers, outpatient service providers, services in Colorado. and methadone providers across Colorado and The Polis administration has set its sights on found that only 12 counties have access to all four strengthening the enforcement of parity in Colorado. provider types.13 A 2017 analysis by the Colorado CHI expects upcoming legislation and executive Health Institute found that only 702 providers in actions to continue to chip away at barriers to access Colorado are waived to provide buprenorphine — a for people experiencing behavioral health conditions. form of medication-assisted treatment.14 Bolstering the behavioral health workforce is an essential step CHI staff contributing to this report: toward parity. • Jalyn Ingalls, • Michele Lueck Conclusion Lead Author • Sara Schmitt • Karam Ahmad • Alec Williams Substance use treatment is now a covered service • Cliff Foster for many — but far from all — Coloradans. Parity and • Jackie Zubrzycki insurance coverage laws have been critical in giving • Joe Hanel

Endnotes 1 National Survey on Drug Use and Health. (2017). Retrieved from: 8 Colorado Health Institute. (2017). “Colorado Health Access Survey.” https://www.samhsa.gov/data/sites/default/files/cbhsq-reports/ Retrieved from: www.coloradohealthinstitute.org/CHAS NSDUHsaeChangeTabs2017/NSDUHsaeShortTermCHG2017.pdf. 9 Colorado Division of Insurance. (2019). “2019 Annual report on 2 National Conference of State Legislatures. (2015). “Mental Health Division of Insurance Activities in support of the Paul Wellstone Benefits: State Laws Mandating or Regulating.” Retrieved from: & Pete Domenici Mental Health Parity and Addiction Equity Act http://www.ncsl.org/research/health/mental-health-benefits-state- of 2008 (MHPAEA) and Associated State Laws.” Retrieved from: mandates.aspx. https://drive.google.com/drive/folders/1CgbzthI4iiqdnBsJDpmKcob LoWiZTrJu. 3 Centers for Medicare & Medicaid Services. “The Mental Health Parity and Addiction Equity Act (MHPAEA). Retrieved from: 10 National Survey of Substance Abuse Treatment Services. (2017). https://www.cms.gov/CCIIO/Programs-and-Initiatives/Other- Retrieved from: https://www.samhsa.gov/data/report/national- Insurance-Protections/mhpaea_factsheet.html. survey-substance-abuse-treatment-services-n-ssats-2017-data- substance-abuse. 4 Colorado Department of Regulatory Agencies. (2018). “2017 Health Insurance Cost Report.” Retrieved from: https://www.colorado.gov/ 11 Treatment Episode Data Set. (2016). Retrieved from: https://www. pacific/dora/node/100791. samhsa.gov/data/data-we-collect/teds-treatment-episode-data- set. 5 Department of Health and Human Services. (2010). “Amendments to the HIPAA opt-out provision (formerly section 2721(b)(2) of the 12 SAMHSA. (2014). “Building the behavioral health workforce.” Public Health Service Act) made by the Affordable Care Act.” Retrieved from: https://www.samhsa.gov/samhsaNewsLetter/ Accessed February 16, 2019 from: https://https://www.cms.gov/ Volume_22_Number_4/building_the_behavioral_health_workforce/. CCIIO/Resources/Files/Downloads/opt_out_memo.pdf. 13 Keystone Policy Center. (2017). “Bridging the divide: Addressing 6 Department of Health Care Policy and Financing. “Healthcare Colorado’s substance use disorder needs.” Retrieved from: https:// Affordability Fee Cash Funded Populations and Supplemental www.keystone.org/wp-content/uploads/2017/03/Keystone-SUD- Payments: FY 2017-2018.” Retrieved from: https://www.colorado. final.pdf. gov/pacific/sites/default/files/S-1A%2C%20BA-1%2C%20MSP%20 14 Exhibit%20J.pdf. Colorado Health Institute. (2018). “Providing medication- assisted treatment in Colorado: Does Colorado have enough 7 Colorado Department of Regulatory Agencies. (2018). “2017 Health buprenorphine-waived provider?” Retrieved from: https://www. Insurance Cost Report.” Retrieved from: https://www.colorado.gov/ coloradohealthinstitute.org/sites/default/files/file_attachments/ pacific/dora/node/100791. MAT%20Provider%20Capacity.pdf.

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