American Journal of Law & Medicine

Parity and difference: the value of parity legislation for the seriously mentally ill.

I. INTRODUCTION

Mental illness affects the health status of about one in five Americans each year. More than five percent of adult Americans have a "serious" mental illness--an illness that interferes with social functioning. (1) About two and one-half percent have "severe and persistent" mental illness, a categorization for the most disabling forms of mental illness, such as schizophrenia and bipolar disorder. (2) All mental illness interferes to some degree with social activities. Left untreated, serious mental illness can be disabling--disrupting family life, employment status and the ability to maintain housing. (3) Nevertheless, privately insured people in the United States (that is, the majority of insured people in the United States) are not covered for mental health services to the same extent that they are covered for physical health services. (4) Second-class coverage of mental health services reduces access to care for people with mental illness because cost becomes a significant barrier to service. (5) The resulting lack of treatment fuels the disabling potential of mental illness. (6) People with untreated mental illness are at greater risk of de facto exclusion from society through unemployment, homelessness and incarceration, as well as early death. (7)

Disparate treatment of people with disabling or potentially disabling mental illness is a species of disability discrimination. The disability rights movement has raised awareness of the evils of disability discrimination and has accomplished much through its advancement of an aggressive legislative agenda. The movement's seminal achievement was the passage of the Americans with Disabilities Act (ADA) in 1990. The ADA established that the social dislocations associated with disabilities spring in large part from decisions by the able-bodied majority (most not arising from discriminatory animus) to order society for its own benefit, and not for the benefit of the disabled. Ending discrimination against people with disabilities therefore entails not only putting a stop to irrational unequal treatment (the traditional goal of antidiscrimination law), but also providing affirmative accommodations and services to the disabled to level the social playing field. The heart of the ADA focuses on adjusting both personal attitudes and facially neutral social structures to enable people with disabilities to participate in society on an equal footing.

The ADA has accomplished much, although undoubtedly more for people with physical, rather than mental, disabilities. (8) As this Article suggests, that lag may be related to more deeply rooted discriminatory feelings toward those with mental disabilities, to the greater practical difficulties in leveling the social playing field for the mentally disabled, or both. The problem of mental health parity in healthcare coverage is a significant piece of achieving the social accommodation of those with mental disabilities. Nevertheless, as described below, parity has eluded ADA enforcement. In response to this failure, states and the federal government have enacted legislation specific to the task. The legislation has varied from weak and inconsequential to quite comprehensive in form. Legislative efforts continue, and laws limiting consumers' exposure to humiliating and fiscally crushing insurance practices advance. Resistance to such legislation centers on concerns over cost, diagnostic and prognostic indeterminacy, and ambiguity at the line dividing medical from non-medical treatments important to the seriously mentally ill.

In Part II, this Article will examine the need for parity legislation and the shape such legislation has taken in recent years. It will argue that parity legislation serves three goals: first, it strives for equality in an important area of commerce that has eluded the ADA; second, it assures access to services by mandating the funding of care and by reducing out of pocket costs for the mentally disabled; and, third, it reduces the extent to which private insurers can shift the cost of mental healthcare to government. The Article, in Part III, will then address two concerns looming in parity's future. First, the parity movement has achieved success in recent years--in part due to the recognition of data demonstrating that the cost of parity, which requires only a vanishingly small rise in insurance costs, is less than was feared. This cost constraint has been achieved through the rapid rise of managed behavioral health companies (MBHCs). The means by which this cost containment has been achieved, however, can be problematic, and admits of the possibility of the replacement of overt disparity with covert disparity through the "management" of access to care. Second, parity legislation focuses on private insurance coverage. Since most Americans have private coverage, usually through their workplace, this focus is sensible. Many people with mental disabilities, however, and those most socially isolated, are unlikely to have access to private coverage. The attention the parity movement has garnered for mental health treatments should be an occasion to address the health access concerns of the large number of people with mental disabilities who move in and out of employment and are often reliant on public systems of health coverage.

II. PARITY LEGISLATION: GOALS AND ACHIEVEMENTS

A. WHY PARITY?

The disability rights movement has forcefully shifted Americans' perceptions of people with disabilities. Before the disability rights movement took root in the 1960s, people with disabilities were regarded as a separate caste, properly kept aside both to serve their best interests and to save the able-bodied from the need to interact with a group regarded as intrinsically different from themselves. (9) The disability rights movement was committed to refocusing society's vision on this issue. It asserted that disability was not intrinsic to the person with the disability, but rather was a function of society's preference for and orientation toward the able-bodied. Adherents to this movement argued that some physical and mental conditions are disabling not because they diminish one's abilities to engage in the broad range of everyday activities, but because society has made resource allocation and social ordering decisions disadvantageous to these conditions. (10)

The ADA was a dramatic national endorsement of the disability rights movement's vision. It embodied a commitment to the integration of people with disabilities into the community and the rejection of a regime in which the disabled could be denied a full opportunity to enjoy the benefits of citizenship. (11) In some contexts, the ADA has been broadly interpreted to achieve that integrationist vision. In Olmstead v. L.C. by Zimring, for example, the Court interpreted the ADA as requiring states to end the unwarranted segregation of people with mental disabilities in their mental health treatment systems, affirming that entities covered by the ADA (including the states) must take affirmative steps to facilitate the integration of people with disabilities. (12) The ADA has also been interpreted as requiring nondiscriminatory provision of routine medical services, (13) residential services for those with psychiatric disabilities (14) and community placements for state prisoners. (15) One place the ADA has not found purchase, however, has been in nondiscriminatory access to health insurance.

The text of the ADA offered hope that disparity in health insurance between physical and mental health coverage would be prohibited. It barred employers from "excluding or otherwise denying equal jobs or benefits" to disabled employees. (16) In addition, it barred discrimination in the form of denying the "full and equal enjoyment of the goods [and] services" of places of public accommodation, (17) including insurance offices. (18) The ADA, however, has proven to be ineffective in addressing disparities in insurance coverage among types of treatments. ADA protection runs only to persons who are disabled. A person is disabled for ADA purposes only if she has an impairment that "substantially limits one or more major life activities," (19) has a record of such an impairment, (20) or is regarded as having such an impairment. (21) Recent cases have sharply limited the statute's range, ensuring that its protections will extend only to those with very severe impairments. (22)

From the perspective of disparity in insurance coverage however, the more significant limitation on the ADA's effect on discriminatory practices is the interpretation of Section 501(c) of the ADA--its "insurance safe harbor" provision. (23) Section 501(c) limits the other substantive provisions of the ADA in the insurance context by preserving the ability of employers and insurers to use risk assessment and classification as permitted under previous state and federal law, so long as such risk classification is not "used as a subterfuge to evade" the ADA's antidiscriminatory purposes. (24) The interpretation of this ambiguous language has a tortured history. (25)

Shortly after the ADA's enactment, the EEOC interpreted Section 501(c) as permitting differential treatment of risks only if"legitimate actuarial data" proved that actuarially similar conditions were treated similarly. (26) Initially, some courts accepted the actuarial equivalence principle. (27) However, more recently, circuit courts that have considered the issue have rejected it. (28) The contrary (and now prevailing) interpretation of Section 501(c) rejects the actuarial equivalence requirement, and instead reads "subterfuge" consistent with the use of the term in the Age Discrimination in Employment Act (ADEA). (29) The modern trend is to interpret subterfuge as "a scheme, plan, stratagem, or artifice of evasion." (30) In interpreting the ADEA, the Supreme Court rejected legislative history and EEOC guidance suggesting a different meaning of subterfuge, and adhered to a "dictionary" interpretation--a specific intent to evade the nondiscrimination requirements of the statute. (31) Courts have rejected similar reliance on legislative history and EEOC guidance in interpreting the ADA. …

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