Mental Disability and Insurance Coverage
Created by FindLaw's team of legal writers and editors | Last reviewed July 17, 2017
Mental illness afflicts millions of Americans, reducing quality of life, straining relationships, and impeding work performance. Despite the pleas of the medical community -- and research demonstrating both physical causes and effective treatments for many types of mental disability -- insurers have historically treated mental illness as something distinct from other types of illness. Those suffering from a mental disability have been stigmatized, blamed for their condition, and denied insurance or subjected to limitations on insurance coverage. However, the law recognizes the discriminatory distinction with laws that protect the mentally disabled despite many insurers' insistence on isolating mental disability.
Overcoming the Physical/Mental Barrier
Insurers have bought into the erroneous (though long-held) notion that mental disorders are somehow separate and distinct from physical disorders. As a result, insurers tend to offer comparatively generous coverage for most medical conditions but give very limited coverage for the treatment of mental illness. Common limitations include larger co-payments, lower "caps" on annual and lifetime coverage, and far fewer days of inpatient and outpatient treatment. Increased mental health benefits, if available, typically mean higher premiums.
While insurers try to isolate mental health problems from other ailments, the medical and scientific communities are making great strides in discrediting the false notions underlying the insurers' efforts. The line between mental and physical ailments is nearly indistinct because of strong scientific evidence demonstrating that mental illness can be identified and treated just like any other type of illness. Therefore, insurance protection for mental illness should be comparable to protection for other health problems.
Laws Protecting Persons with Mental Disability
The denial of insurance benefits violates the principles behind federal and state laws created to eradicate discrimination based on mental illness. These same laws provide a means for those who have suffered wrongful discrimination to pursue equal treatment and include the following:
The Americans with Disabilities Act
The Americans with Disabilities Act (ADA) offers strong protections for the disabled in many areas. While certain provisions of the law would overcome much of the discrimination that occurs with insurance, a special section of the ADA, added to address the insurance issue, renders the law's strength in this area less certain. Courts have treated insurance claims under the ADA with varying degrees of receptiveness, but it remains a foundation from which to oppose insurance discrimination based on mental disability.
The Mental Health Parity Act
The Mental Health Parity Act (MHPA), passed in 1996, was conceived as a means of ending discrimination against mental health claims in employer-provided insurance plans. Despite strong initial bipartisan support, however, opposition from insurers and employers derailed initial efforts to pass the law. Opponents argued that increasing mental health coverage limits would drive up costs. The proponents of the bill then backed off in their demands and the legislation that ultimately passed is restricted in scope. The MHPA does not require mental health coverage. It applies only to annual and lifetime benefits caps, does not apply to employers with fewer than 50 employees, and provides an exemption where mental health coverage would raise an employer's premiums above 1 percent.
A number of states, including Texas, Maine, Maryland, Minnesota, New Hampshire, and Rhode Island, also have laws that improve the rights of the mentally disabled to secure insurance benefits. These laws do not apply, however, to employee benefit plans that are fully self-insured; these are instead governed by the federal Employee Retirement Income Security Act (ERISA). State laws are still an important means by which some of the mentally disabled may secure insurance benefits.
Challenges to Insurance Policies
Another way plaintiffs have attacked discriminatory insurance policies is by challenging the language of the policy. By demonstrating that a condition which the insurer had classified as mental illness (such as bipolar disorder) in fact had a physical basis, some insured's have gotten around restrictions on mental health coverage. Courts have also found coverage by looking at the nature of the treatment, such as forced feeding and dietary enhancement for a sufferer of anorexia, rather than the insurer's description of the condition. These victories, however, depend on the language of the contract. Health insurance contracts are often renewed annually and insurers often modify language they feel the courts have misinterpreted.
Get Professional Legal Help from a Civil Rights Attorney
Has an insurer treated you unfairly because of the arbitrary distinction between physical and mental health? Were you wrongly deprived of full insurance benefits because of your mental illness? If you think your civil rights have been violated, get professional legal help. Talk to an experienced attorney who can help you with your claim.
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