Health insurers in New Jersey will now have to prove that their behavioral health coverage is on par with what they offer for physical ailments, thanks to a new state law designed to improve access to mental-health and addiction treatment.
Gov. Phil Murphy signed the mental-health parity law during a visit Thursday to Capital Health Regional Medical Center, in Trenton, adding the Garden State to a growing list of jurisdictions that have implemented similar plans.
“Being able to maintain mental health should be no different than being able to maintain physical health,” Murphy said, hoping it would bring “real peace of mind” to families struggling to address psychiatric and drug-abuse issues.
The bipartisan measure, which passed the Legislature in late March with near-unanimous support, ensures equitable coverage for individuals with behavioral-health problems — including those with autism and eating disorders — and enhances the state’s power to regulate the insurance industry. It also requires insurers to submit annual reports that detail how they assess and ensure parity.
Filling gaps in existing law
While federal law already requires equal insurance coverage for mental and physical healthcare, parity advocates said those protections fall short at times. Many shared passionate testimony in support of New Jersey’s proposal, which was first introduced in early 2017. The legislation was also supported by hospitals, labor unions and healthcare advocates.
On Thursday, parity supporter Valerie Furlong — who introduced Murphy at the Trenton event — recounted the story of her family’s struggle to obtain coverage for the treatment physicians ordered for her two children, both of whom were battling addiction.
“Thankfully we had the means to pay for our sons’ treatment when it was denied,” she said. “But had we not, we believe we would have lost our sons to fatal overdoses, as have many other families … due to parity violations.”
Insurance coverage for behavioral-health services has become especially important in light of the growing opioid epidemic, which claimed the lives of some 3,000 New Jerseyans last year. Tens of thousands of residents received treatment, with many more unable to find space in a program, or afford the costs involved. In addition, an estimated one in five residents is diagnosed with some kind of mental-health challenge.
In 2008 President George W. Bush signed the federal Mental Health Parity and Addiction Equity Act, which called for insurance plans regulated by Washington to provide the same level of coverage for all kinds of treatments. President Barack Obama’s 2010 Affordable Care Act included additional guarantees around behavioral health coverage.
But enforcement of these laws was largely left up to the individual states, which may not have had the capacity — or willpower — to police the powerful insurance industry. In addition, the federal laws do not apply to health plans sold on state markets to individuals and smaller businesses; in New Jersey, these policies protect some 300,000 residents.
Advocates: Parity is rarely achieved
While the Garden State has some of the nation’s most extensive requirements for insurance coverage — requiring companies to pay for a wide range of tests, treatments and services — critics said it has struggled to ensure true parity. But it is far from alone.
According to a report from ParityTrack — an advocacy organization founded by former U.S. Rep. Patrick Kennedy, who now lives at the Jersey Shore — New Jersey was among the majority of states that received a failing grade of F in a nationwide analysis. Illinois was the only jurisdiction awarded the top mark, a combined A and B; Delaware and six other states received a C; and 11 states, including Maryland, scored a D.
Among other things, New Jersey’s new law changes certain definitions relating to mental health and spells out that parity must apply to treatment for autism and disorders relating to eating and other compulsions. It also bars insurance companies from creating obstacles to behavioral healthcare that don’t exist for physical treatments, including additional co-pays, limits on services, or usage reviews.
In addition, the law calls for insurers to file an annual report to the state Department of Banking and Insurance by March that details the processes they use to determine medical necessity and other treatment limits, for both behavioral health and physical care. This report must also include an analysis of how these systems are equitable and meet the requirements of state and federal law. (The reporting requirements were reduced slightly through amendments to the bill, which led some insurance companies to support the measure in its final form.)
Putting the ‘consumer first’
The plan also requires officials at DOBI to analyze these industry reports and submit their own assessment of whether parity is being achieved to state lawmakers each May. The department must also post its findings online and share them with the public through an organized campaign. The law takes effect in two months, suggesting the first round of reporting won’t actually come until next spring.
“This bill truly puts the healthcare consumer first,” said Senate Minority Leader Tom Kean Jr. (R-Union), who sponsored the measure with Sen. Joseph Vitale (D-Middlesex).
The Assembly version was led by Speaker Craig Coughlin (D-Middlesex), Assemblywoman Valerie Vainieri Huttle (D-Bergen) and eight other sponsors, along with more than three dozen co-sponsors.
DOBI Commissioner Marlene Caride said her staff would also conduct a “parity listening tour” throughout the state, to get input from residents on problems they are facing, and educate them on the new protections. She also encouraged residents to report concerns to her office by calling the consumer hotline (1-800-446-7467) during weekday business hours or by visiting the department’s website and clicking on “consumer assistance.”
Despite the federal requirements, Caride said it has been hard for people to access equal coverage over the years. “This new law enhances our enforcement ability by demanding greater accountability from the carriers, on behalf of our residents,” she added.
The new protections will have a lasting positive impact on the scores of New Jersey residents who now receive mental-health and addiction services, according to Commissioner Carole Johnson, whose Department of Human Services oversees these treatment programs. While the law does not technically apply to Medicare or Medicaid, which the DHS governs, Johnson said Thursday she would also work to apply parity measures to Medicaid plans.
“As a policy matter it seems fair and pretty straight forward, but it’s taken decades to get to this moment,” said Johnson, who worked in the Obama administration on a variety of behavioral-health programs. “That’s what today is about: making sure parity is not just a promise, but a reality in New Jersey.”