1 How Health Reform Will Help Children with Mental Health Needs The new health care reform law, called the Affordable Care Act (or ACA), will give children who have mental health needs better access to the services and supports they need to thrive. As it is phased in over the next few years, the ACA will change how the health care system operates and improve the quality of the care provided to children and families. Most children and families who are now uninsured will be able to obtain insurance. Health plans will have to meet certain standards and must cover mental health and substance abuse services on the same terms as other medical conditions. Families with lower incomes will receive subsidies to help them meet the cost of this insurance, or they may become eligible for Medicaid. In many states, more children and their parents and caregivers with low incomes will be able to qualify for Medicaid, and Medicaid s coverage of mental health services will improve. Section 1: Improvements to Health Insurance Overview Most children and their families have access to health care through a private health insurance plan from their employer or a plan they have purchased. Before the ACA, insurers could refuse to sell or renew these policies based on a person s health or mental health. They could also deny or delay coverage for pre-existing conditions. And they could use a large share of premium dollars (the amount a person pays to have insurance) for high administrative fees and profits instead of for health care. Under the ACA: Insurers can no longer deny children coverage for a pre-existing condition. This took effect on September 23, Young adults (up to age 26) must be allowed to remain on their parents health insurance, if their parents so desire. This took effect on September 23, No health plan can have a lifetime or annual limit on certain benefits or rescind coverage if an individual gets sick. This took effect on September 23, Health insurance plans are required to devote a minimum percentage of their premium income to paying for services. This took effect on January 1, 2011.
2 BAZELON CENTER FOR MENTAL HEALTH LAW 2 These provisions are explained more fully below. Other ACA provisions will take effect in the future. Among those that will take effect on January 1, 2014: Insurers may not charge people with poor health more than others. Premiums may vary only by a limited amount and only on the basis of a few factors, such as tobacco use, age, geographic area and family size. Health insurers will have to sell and renew policies to everyone who applies (called guaranteed issue and renewal ). Health insurers are prohibited from discriminating based on a person s mental or physical disability. To keep insurance affordable, the law requires all American adults and children to have insurance. This will be enforced through a new tax penalty on individuals who do not have acceptable coverage. However, people who cannot afford a policy and people who object on religious grounds will not have to pay this penalty. Financial assistance will be available to help families with lower incomes pay their premiums. Employers with 50 or more employees will have to pay the federal government a fee for every employee who receives this assistance. The ACA has rules for the sale of insurance policies that should lower the price of good health coverage. Estimates by economists suggest that even families who do not qualify for federal assistance are likely to save significant amounts per year in health insurance premiums. Pre-Existing Conditions Are No Longer a Barrier to Coverage One of the most important provisions in the law for children with mental health needs is the ban on exclusion for a pre-existing condition. Insurers often deny coverage because a child has a health condition or has been sick in the recent past, and many children with mental illnesses have failed to qualify on these grounds. Some plans refuse to enroll the child at all, while others delay coverage of the pre-existing condition. As a result, families either face long periods before needed services are covered or cannot get the services at all. The ACA prohibits insurers from denying coverage to children based on any pre-existing condition in plans sold after September 23, This provision will also apply to adults starting in Young Adults Can Remain Covered Another important provision is the option for families to keep a dependent child on a parent s or guardian s insurance plan until the child turns 26. Young adults often have a hard time getting and keeping insurance coverage, especially if they have emotional or behavioral disturbances. Yet this is a time when access to coverage and services is critical because the first episode of a mental illness often occurs in young adulthood. Until now, coverage on the parents plan generally ended at age 22 or younger, and many young people with mental illnesses are unemployed or employed in a part-time job without benefits. Ironically, these young adults
3 BAZELON CENTER FOR MENTAL HEALTH LAW 3 would be eligible for Medicaid on their own, but when they live with parents, the parents income disqualifies them. The ACA has increased security for parents and young adults by ensuring coverage up to age 26. Guaranteed Issue Means Everyone Who Applies Must be Offered Insurance The ACA addresses some of the worst abuses in the insurance system. In addition to the ban on exclusion for a pre-existing condition, health plans will not be able to refuse to renew a policy because a person or family has needed and used significant and costly covered health care services. Children and adults with mental illnesses have been victims of these practices and have either lost their health coverage just when they needed it most or have been unable to purchase a policy at all. People who participate in large employer plans have not faced these difficulties, but those seeking individual policies, and some small businesses, have been affected. Guaranteed issue does not go into effect until January 2014, although the ban on denial of coverage for pre-existing conditions is already in place for children (see above). Health Insurance Exchanges Will be the Marketplace for Health Insurance To help families purchase health insurance and choose the right plan, the law creates new state marketplaces called Exchanges. The Exchanges will be in place in each state by January 1, They will offer families a choice of health plans that must meet certain standards for benefits and cost. However, families do not have to buy coverage through an Exchange. They can purchase or receive coverage from their employer, a state or federal program such as Medicaid or Medicare, or directly from an insurer. Children with mental illnesses will benefit from these Exchanges in several ways. First, parents will be able to keep the coverage for their children even if they change jobs, lose their job or move. The Exchanges will also make it easier for families to compare plans and choose one that best meets their needs. All plans that participate in an Exchange will have to meet certain requirements, among them providing coverage of mental health and substance use disorder services and offering insurance that maintains the consumer protections listed above. Exchanges will also have to offer a plan that is available only to children under age 21. The Exchanges will give people with psychiatric disabilities the opportunity to pick the health plan that best suits their needs, based on the level of out-of-pocket payments they feel able to make and the premiums they are willing to pay. This will make it much easier for people with mental illnesses to purchase insurance.
4 BAZELON CENTER FOR MENTAL HEALTH LAW 4 Minimum Benefits Must be Covered Every health insurance plan offered through the state Exchanges will have to cover at least a minimum range of services. New employer plans must also meet this standard. Included in the list of benefits is coverage for mental health and substance use disorder services, which must be available at parity with medical/surgical coverage. That is, there cannot be different and lower limits on the number of visits or days of care, or higher co-payments for mental health and substance abuse services than are typically required for other health care. This will greatly benefit children with mental illnesses because, for the first time, families can be sure that any health plan that they purchase through the state Exchange covers mental health and substance abuse services on the same level as medical or surgical services. Plans will also have to cover rehabilitation and habilitation services, hospitalization, emergency department services, outpatient services, pediatric services that include oral and vision care, prescription drugs and preventive services (see the Prevention section below for more details). None of these services is more specifically defined in the law. As a result it is not yet clear whether services for children with mental illnesses that fall under the category of psychiatric rehabilitation will be included in the benefit s definition of rehabilitation. However, all plans can be expected to offer at least psychiatric medications, therapy and inpatient psychiatric hospital care. The law also requires health plans to have an adequate network of providers to serve the people they enroll. This could be especially important for those who use mental health services since some health plans now severely restrict the number of providers in their networks, making it hard to get timely appointments. Health Plans Can Differ Although every plan sold to families through the Exchanges must meet certain minimum standards for covered services, the law allows plans to differ in the premium and cost-sharing amounts they charge consumers. Plans can also be offered that provide more than just the minimum required covered services listed above. Health plans will have to offer four levels of benefits with different amounts of cost-sharing. The law also creates a special plan for young adults under age 30, to cover only catastrophic health care costs. These plans will have very high deductibles, but they will protect young people from extremely high expenses for health care in any one year. Coverage Will be Affordable Some families who cannot afford any of the plans sold through the Exchange may still have incomes too high to qualify for Medicaid. The ACA authorizes subsidies for them. Premium subsidies will be available for people with incomes of up to 400% of the federal poverty level (in 2011, $43,560 for individuals and $89,400 for families of four). The amount of the subsidy will
5 BAZELON CENTER FOR MENTAL HEALTH LAW 5 vary by income, with those who have the lowest income receiving the highest subsidies. There is also an upper limit on the percentage of their income that individuals would have to spend to purchase insurance. The ACA also limits the total of out-of-pocket cost for families with incomes up to 400% of poverty. Those with the lowest incomes will pay no more than 6% of their health care costs. This amount rises in steps up to the point where people with incomes at 400% of poverty would pay no more than 30% of their costs. Limiting premiums and out-of-pocket spending is critical for people with any serious illness. For individuals with mental illnesses who require regular care, co-payments mount up quickly and can present significant financial problems. Existing Employer Plans Can be Grandfathered Several of the provisions summarized above apply only to new plans. Individuals who remain enrolled in insurance plans that began before March 23, 2010 may have what is called a grandfathered plan. Such a plan can remain grandfathered if it meets certain ACA standards, including those that: Prohibit lifetime or annual limits on services that are considered essential benefits (the minimum benefits described above); Prohibit exclusion of pre-existing condition; Prohibit rescinding coverage; Extend coverage to dependents up to age 26. However, grandfathered plans are exempt from some of the ACA protections, including: Discrimination based on health status; Guaranteed issue and renewability; Essential benefits package and coverage of preventive health services. Help Will be Available to Choose a Plan Choosing a health insurance plan can be confusing. The ACA therefore provides a way for people to get help in this process. Exchanges will provide information and assistance to help families compare plans so they can make an appropriate choice. This will include information on benefits, premiums, cost-sharing, quality, provider networks and consumer satisfaction with each plan. States will receive funds to set up offices that will provide assistance or to operate health insurance ombudsman programs. These offices will educate health insurance consumers about their rights and responsibilities, assist them with enrollment and help them obtain premium tax credits and file complaints and appeals. These programs will also collect and monitor problems encountered by consumers.
6 BAZELON CENTER FOR MENTAL HEALTH LAW 6 Plans will have to use uniform documents and terms to describe their coverage so that people can more easily understand what they offer and compare plans. These descriptions must be in non-technical language, easy for the average person to understand. They must use standard definitions of terms, include information on the dollar amounts of cost-sharing, and explain exceptions, reductions and limitations on coverage and other important information. Enrollment Will be Streamlined, with No Wrong Door Enrollment in public programs like Medicaid or CHIP or the ACA subsidies for insurance can be complex, and these processes have often kept eligible families from applying. The ACA addresses this problem by requiring states, starting in 2014, to set up state-administered websites through which families may apply and enroll in Medicaid, CHIP or plans in the state insurance Exchange. A single, streamlined application form will be developed to aid families in applying for Medicaid, CHIP or premium tax credits through the Exchanges. This form may be submitted online, in person, by mail or by telephone. When families apply for any of these programs, they will be screened for eligibility for all of them and referred to the appropriate program for enrollment. This "no wrong door" concept will ensure that families will not have to repeat the enrollment process if they first apply to the wrong program. Section II: Medicaid & CHIP Overview Medicaid provides coverage for health and mental health services for people with low incomes, including children with mental disorders. The program covers a wide range of community services for children and can be key to enabling a child to continue to live at home, function well in school and get along with peers. The range of community services covered by Medicaid is much broader than a typical private insurance plan. As a result, Medicaid coverage is often the better option for children with serious mental disorders. More People Will be Eligible for Medicaid Currently, not every child who needs Medicaid is eligible. However, the ACA expands the program s eligibility and will allow more children (and parents) to receive services. Beginning no later than 2014, states must cover all children and adults with incomes below 133% of the federal poverty level (FPL). i In a number of families, this will mean that parents might for the first time qualify for the same insurance program as their children. This can facilitate family-oriented care. Under current law, states must cover all children under the age of 6 with family incomes up to 133% of the FPL and children ages 6-19 up to 100% of poverty. States also have the option to cover children with higher incomes. Under the ACA, Medicaid will become accessible to many children between the ages of 6-19 who live in states that do not currently cover children up to
7 BAZELON CENTER FOR MENTAL HEALTH LAW 7 133% of poverty. ii To prevent states from taking other children off Medicaid to pay for this new group, states are required to keep their current eligibility rules for children in place until Beginning in 2014, the ACA also allows states to extend Medicaid coverage, including all benefits and Early and Periodic Diagnosis and Treatment (EPSDT) requirements, to foster care children who have aged out of the system, until they are 26 years old. Children s Health Insurance Program is Extended The Children s Health Insurance Program (CHIP) is a grant program to states to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid. CHIP covers mental health services for children, and the program was amended in 2009 to require that these services be offered at parity with medical/surgical coverage. The ACA extends CHIP for two years, with funding through September 30, 2015, and makes several changes to it. As is the case for Medicaid, state eligibility standards in place when the ACA was enacted must be maintained. States are also not allowed to impose more restrictive eligibility requirements or enrollment procedures that would make enrolling in CHIP more difficult for families. If CHIP programs are unable to offer coverage to all children who are eligible because of funding shortfalls, the state must set up procedures to screen children for other subsidized coverage through Medicaid or, starting in 2014, through subsidized insurance policies through their state Exchange. Section III: Innovations in Service Delivery Services Will be Better Coordinated The law supports new ways of delivering health care that will offer children and families more coordinated health and mental health services. Where these coordinated programs exist, they have been very effective in treating the medical and mental health needs of children and adults with mental disorders who have other serious health conditions. Two ACA provisions are relevant for children with mental health disorders. 1. Medicaid Health Homes The ACA creates a new state Medicaid option for the development of health care homes. These will provide primary health care services, comprehensive care management, and coordination and referrals to specialty care and appropriate community services for children and adults who have serious health or mental health conditions that are expected to last for a significant time ( chronic conditions when referring to adults). Medicaid health homes might be based in pediatric practices or community mental health agencies that offer primary care as well as mental health services.
8 BAZELON CENTER FOR MENTAL HEALTH LAW 8 2. Accountable Care Organizations Another way the law encourages coordinated care is through the support of Accountable Care Organizations (ACOs). ACOs are groups of providers that provide comprehensive and coordinated care. ACOs can be physician groups, networks of practices, nurse practitioners and physician assistants among others, who are generally affiliated with a local acute care hospital and provide coordinated and collaborative care. The law promotes ACOs in several ways. One demonstration program is targeted specifically for children. The federal government will develop the requirements and standards that ACOs must meet and states will enable pediatricians who meet these standards to be considered ACOs under Medicaid. The program is intended to coordinate services furnished to children and encourage investment in high-quality and efficient services. Prevention Services Will Increase Prevention and early identification of both health and mental health problems allow for early intervention, which can effectively reduce the burden of disease on children, their families and communities. Children and adults with serious mental illnesses are at great risk for many preventable co-occurring diseases, such as childhood obesity and diabetes. Increased access to services that can prevent these illnesses greatly improve the lives of children and families. Research on successful prevention strategies is also critical to determine how best to prevent and intervene in the course of mental illnesses for children. Private Plans The Essential Benefits that all Exchange plans must cover certain preventive services and plans may not charge deductibles, co-insurance or co-payments for these services. The preventive services that will be covered are those that an independent federal task force of scientific experts has found to be effective. Already included on the list are screening for depression in adolescents and adults (which may include screening for post-partum depression). Health plans will also have to cover preventive services recommended by the American Academy of Pediatrics and the federal government under the Bright Futures guidelines. These guidelines recommend services that should be provided to children birth-age 21 to keep them healthy, such as regular pediatric visits, vision and hearing screening, psychosocial and behavioral assessments, alcohol and drug use assessments, immunizations, and screening and counseling to address obesity and help children maintain a healthy weight. These services will be provided at no cost to parents. Medicaid is already required to cover preventive services for children, and the law offers incentives for Medicaid programs to cover these services for parents and other adults as well. Home-Visiting Programs One of the most promising areas of mental health prevention and early intervention is early childhood home visits by health care workers. Approximately 20% of children will develop a mental health disorder that leads to functional impairments. Mental disorders are increasingly
9 BAZELON CENTER FOR MENTAL HEALTH LAW 9 being identified in younger and younger children. Home-visitation programs have been shown to improve the social and emotional development of very young children, improve the relationship between mother and child, and enable identification of mental health problems in infants and toddlers. The ACA promotes expansion of these programs by establishing a new grant program for states to fund early childhood home visitation. States are required to establish and meet certain benchmarks for these programs, which may include improvement in maternal and child health, prevention of child maltreatment or abuse, increases in school readiness and achievement, reduction in crime and domestic violence, enhancement of family economic independence, and improved coordination and referral to community services. Post-Partum Depression Research and Services Maternal depression is harmful to both mother and child, and often leads to an increased risk for the child of a variety of social, emotional, developmental and behavioral problems. Early intervention is important to ensure that families do not face these preventable problems. The ACA provides funding for federal and state initiatives for public education and treatment and support services for women suffering from postpartum depression. The law also provides funding for research into the causes, diagnoses and treatments of these conditions. Health Clinics Can be School-Based The ACA authorizes grants for school-based health clinics. These grants will be available only if Congress approves funding for them, which has not yet occurred. Schools are a logical place to locate health care services. School-based health services are particularly beneficial for children in low-income families and other at-risk groups, who often lack consistent access to basic health services, mental-health services and dental care. When such clinics are established, mental health issues are one of the most common issues children bring to the clinic. The services to be provided in school-based clinics that receive the ACA grants will include comprehensive primary health services, mental health services and referrals. School-based health clinics will also help facilitate collaboration between schools and local mental health agencies, and link children with appropriate mental health services in the community. Conclusion The Affordable Care Act addresses serious flaws in the current health care system. It ensures that health care coverage can be nearly universal. It significantly improves the coverage of mental health services in both private plans and Medicaid. And it expands collaborative, coordinated care and emphasizes prevention and quality of care. It also includes provisions designed to bring down the overall cost of health care while improving quality.
10 BAZELON CENTER FOR MENTAL HEALTH LAW 10 The ACA is a built on the private insurance model. Yet public safety-net programs (Medicaid and CHIP) ensure that people with low incomes, including those with significant mental health problems, will have access to the wide range of services that they need at a cost that is affordable to the individual family and the taxpayers. Many of the ACA s provisions are in place today. Others will be implemented by Children and families will benefit greatly once the law is fully in force. i Which in 2011 is $14,484 for an individual and $25,726 for a family of four. ii The states that currently cover children between the ages of 6 and 19 up to 133% of the FPL or higher are: Alaska, Connecticut, Michigan, Minnesota, New Hampshire, New Mexico, Ohio, South Carolina, Vermont, and Washington