Due to not so strong and vocal mental health lobby, mental health
benefits are cut by half in last decade. According to a study just
completed by Hay Group, insurance and managed care companies have been
cutting mental health benefits substantially more than other health care
More specifically between 1988 and 1997, insurance companies have cut the value of mental health benefits by 55 percent while the value of other health care benefits dropped only 7 percent. They are cutting their costs mainly by reducing your mental health benefits.
Although oversimplified and not always true, but here is partial explanation of the goings on in the insurance and managed care world. Employers contract an insurance company or a managed care administrator to manage health coverage of their employees, who we will call a "contractor." For this service, employers pay this contractor a good bit of money that we will call "premium." Contractors want to show your employer that if they're hired they'll save them money by charging them a lower premium. Whenever managed care companies promise your employer to bring down the premium, chances are that they'll make up for the reduced money by reducing mental health services.
In order to act as watchdogs for healthcare changes and how it affects us, we must educate ourselves regarding how the insurance and managed care system views mental health services. Some tend to view it as a "soft item," meaning these services can be sacrificed. For example, contractors don't anticipate a public outrage if "John" or "Mary's" insurance don't pay for their marriage troubles, post-divorce blues, or their child's learning problem. It's easier for contractors to limit services for such problems. Unless someone commits suicide or homicide, it's difficult to make a convincing case for the necessity of counseling.
Politicians, employers and consumers are being misled to believe that mental health services are driving up the cost. Not true. Let's look at the facts. In 1997, insurance companies spent only $69.61 on mental health services per covered individual. Compare it with $ 2155.60 that they spent in the same year on other health care items. Which one do you think is driving up the cost? In 1997, mental health services constituted only 3.1 percent of the total health care expenses. It's a negligible amount to pay for matters that are extremely significant in people's personal lives.
The cost of untreated or insufficiently treated emotional disorders is enormous. The cost is indirect. It's hard to make an accurate estimate of the cost but we can make an educated guess. Many accidents, work related injuries, absenteeism, loss of workdays, avoidable complications of physical illnesses, and disabilities are some of the examples of this indirect cost that translates into billions of dollars. In the U.S., more people are classified as disabled on accounts of mental disorders than they are of physical disability.
Few employers are aware of the true costs of disability. Less than two percent of corporations even collect data on their disability costs. Almost no corporation keeps data on stress-related physical disorders. So corporations don't really have an idea of the cost of inadequate psychological support their employees are receiving.
Corporations should use their power to improve managed care policies.
It should be no longer sufficient for managed care companies to show reduction
in health care costs. Instead, they should be expected to show that
they're boosting productivity, reducing total health care expenses and
disability costs. In other words, we need to hold managed care not
only to reducing direct costs but also to lowering indirect costs.
At this point, from consumers' perspective, the access and affordability of psychological support is unsatisfactory. The system is grossly inequitable. For example, under many insurance plans, consumers of modest incomes are expected to pay out of their pocket a sum of thirty-five, forty, or even fifty dollars at each mental health visit! How can they be expected to pay that kind of money on each visit? This certainly doesn't encourage them to seek counseling. However, on paper, it gives the appearance that their insurance "covers" them for mental health services.
Often employers don't hear about these problems either because employees don't believe these things can be changed or they don't let their bosses know that they're having a psychological problem.
Managed care tries to scare the public and our politicians that if coverage
for mental health services is increased, everyone will have to pay substantially
more. In truth, it may cost a dollar more per month. According
to a survey, 78 percent people won't mind the increase even if the cost
goes up as much as four dollar a month.
Return to Self Help
Copyright 1996, Mind