Tagged Legislation

New California Law Makes It Easier to Get Care for Mental Health and Substance Abuse

Karen Bailey’s 20-year-old daughter has struggled with depression and anxiety for years. Since 2017, she’s been in three intensive group therapy programs and, each time, the family’s insurer cut her coverage short, says Bailey.

“At a certain point, they would send us a form letter saying: We have determined that she is all better, it’s no longer necessary, so we are not covering it anymore,” says Bailey, 59, who lives in Los Angeles. “And believe me, she was not all better. In one case, she was worse.”

In making coverage decisions about mental health and addiction treatment, insurers frequently use “their own kind of black box criteria, not knowable to enrollees and not consistent with standards of care,” says Julie Snyder, director of government affairs at the Steinberg Institute, a Sacramento-based mental health policy and advocacy group.

A California law that took effect Jan. 1, SB-855, should make it much harder for state-regulated commercial health plans to do so. It requires them to use nationally recognized clinical standards established by nonprofit associations of clinical specialists to determine which mental health and addiction treatments they’ll cover — and for how long.

This means, for example, that insurers will find it more difficult to limit a client to only a week of residential addiction treatment when 30 days is the clinical standard, or to treat only the most immediate physical symptoms of anorexia and not the underlying psychological drivers, says Snyder.

“It’s a very strong law, and it has the potential to really be a game changer,” says Karen Fessel, executive director and founder of the Mental Health and Autism Insurance Project, which supported the legislation.

There could hardly be a better time to beef up mental health coverage, as we approach the anniversary of a pandemic that’s been tied to an increase in depression, anxiety, substance use and suicidal thoughts.

Crucially, the new law, which updates and replaces California’s previous mental health parity statute, dramatically expands the number of conditions insurers must cover.

The state law in force until this year required coverage for only nine “severe” mental illnesses, including schizophrenia, bipolar disorder and major depressive disorder, and for “serious emotional disturbances” in children. SB-855 mandates coverage for conditions ranging from mild to severe.

Federal law already required broader coverage, but in vague terms that health plans have frequently circumvented with their restrictive definitions of what’s medically necessary, patient advocates say.

By expanding the range of conditions health plans are obliged to cover and holding them to stiffer standards on the type and amount of care they must pay for, the new law closes “loopholes you could drive a Mack truck through,” says state Sen. Scott Wiener (D-San Francisco), who authored the legislation.

For years, many health plans declined to cover mental health treatment until a patient was in crisis, Wiener says. The new law “makes sure people will be able to get care early while they still have a home, a family, a job.”

Another key aspect of the law is that it requires health plans to cover out-of-network providers at in-network costs if an enrollee is unable to find timely treatment a reasonable distance — generally, 15 miles or 30 minutes — from their home.

“That is something we run into all the time,” Bailey says. The family has spent $100,000 over the years on out-of-network mental health providers for their two kids, she says.

Opponents of the new law, including the California Association of Health Plans and the California Chamber of Commerce, have argued it will significantly increase health care costs, subject insurers to continuous litigation and — through its stringent definition of medical necessity — impede the ability of providers to decide what’s best for their patients.

Proponents say the medical necessity guidelines spelled out by the specialists’ associations allow providers wide discretion to decide the best treatment for each patient. An analysis conducted for state legislators by the California Health Benefits Review Program estimated that in the first year of the law’s implementation, premiums and enrollee cost sharing would rise a mere 0.002%.

The new law won’t help everybody: It applies only to state-regulated commercial health plans covering some 13 million Californians — about one-third of the state’s population. It excludes Medi-Cal, which insures another third of state residents, as well as federally regulated commercial plans, which cover nearly 6 million.

Because only a minuscule share of patients fight their health plans over denials of care, mental health advocates hope that diligent enforcement by the Department of Managed Health Care, which regulates plans covering the vast majority of commercially insured Californians, will discourage insurers from denying necessary care in the first place.

Rachel Arrezola, a spokesperson for the agency, which opposed provisions of the legislation last year, said it fully intends to ensure compliance and has begun to do so.

But if your health plan still denies you the care you believe you need, fight it, patient advocates and health care attorneys say.

“You need to be vigilant, and you need to advocate for yourself and you need to appeal denials, and you need to do it in writing,” says Cari Schwartz, a Los Angeles lawyer who represents patients.

If you appeal a decision over the phone, take detailed notes, write down the time and day of the conversation and get the name of the person you spoke with, Schwartz says. Build a file of all communications and other information related to your case, she says.

And be persistent. “I think insurance companies bank on individuals giving up the fight,” Schwartz says.

If you need help, contact the Health Consumer Alliance (1-888-804-3536 or www.healthconsumer.org), which offers free advice and legal services.

If your mental health provider requested a certain type of treatment in 2020 that was denied by your health plan, ask the provider to resubmit it this year, because the changed legal landscape might work in your favor, says the Steinberg Institute’s Snyder.

With most commercial health plans, you have 180 days from the date you receive a denial to file an appeal. You must first appeal to your insurer. If it fails to respond after 30 days, or upholds its decision, you can take it to the agency that regulates your policy.

In most cases, that will be the Department of Managed Health Care (www.dmhc.ca.gov or 1-888-466-2219), which has a help center and allows you to file a complaint online. If your regulator is the California Department of Insurance, you can call its helpline at 1-800-927-4357 for advice, and file a complaint on its website (www.insurance.ca.gov).

Most Californians enrolled in commercial health plans are entitled to a review by independent medical experts if they are denied care because the insurer deems it unnecessary, or it’s experimental — or the insurer won’t reimburse them for emergency care.

The reviews, which can be requested through state regulators, are well worth the effort: About 60% of Independent Medical Reviews filed through the Department of Managed Health Care result in the patient getting the treatment that was initially denied, Arrezola says.

Be sure to open an archive on the managed care department’s website (https://wpso.dmhc.ca.gov/imr/), in which you can search past decisions for cases similar to yours. They can help you frame your arguments.

Ultimately, the utility of the new law depends on the will of regulators to enforce it and of consumers to avail themselves of it.

“With any luck, it means people won’t have to take out a $50,000 mortgage on their house to pay for their children’s opioid treatment,” says Snyder. “Unfortunately, that is all too common.”

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

New Single-Payer Bill Intensifies Newsom’s Political Peril

SACRAMENTO — A group of Democratic state lawmakers introduced legislation Friday to create a single-payer health care system to cover all Californians, immediately defining the biggest health policy debate of the year and putting enormous political pressure on Gov. Gavin Newsom.

The Democratic governor faces the increasingly likely prospect of a Republican-driven recall election later this year. The single-payer bill adds to his political peril from the left if he doesn’t express support, and from the right if he does.

State Assembly member Ash Kalra, author of AB 1400, said the coronavirus pandemic has exposed a broken health care system that has left millions without reliable and affordable health coverage. His bill would address those gaps in the system, he said, effectively eliminating private health insurance by shifting responsibility for administering and financing health coverage to the state government.

The new system, called CalCare, would expand coverage to nearly 3 million uninsured Californians and provide rich benefits, including dental care, generous prescription drug coverage and long-term care, according to the bill language, which was obtained by California Healthline before the measure was introduced.

The move, however, faces monumental financial and legal barriers, and would likely require new taxes. While the measure does not assign a price tag to the overhaul, a separate single-payer bill that failed in 2017 would have cost an estimated $400 billion each year.

“People are dying and suffering. They’re going bankrupt and starting GoFundMe pages just in order to survive in the wealthiest state in the wealthiest nation on earth,” said Kalra, a liberal Democrat from San Jose. “We now have a Democratic White House, and forward-thinking Democrats like Xavier Becerra going to Washington who can be incredibly helpful.”

Nearly 20 other Assembly Democrats signed on to the legislation, which is among the first state-based single-payer proposals to be introduced under the Biden administration. Massachusetts lawmakers this year introduced similar legislation, and other states are considering it.

Sponsored by the California Nurses Association, a powerful union and political force in Sacramento, the single-payer bill is expected to ignite a fierce health care fight among liberal and moderate Democratic lawmakers, and draw intense opposition from deep-pocketed health industry groups, including insurers, doctors and hospitals.

“Eliminating private health coverage in California will always be unworkable for a number of reasons. It would cost $400 billion a year, which we can’t afford,” said Ned Wigglesworth, spokesperson for Californians Against the Costly Disruption of our Healthcare, which includes major private health insurers and the state doctor and hospital lobbying groups, which also opposed the 2017 single-payer bill.

“Shifting to an entirely government-based health system would be especially harmful and disruptive now, as California’s health care community is focused on meeting the acute health care needs of our state during a pandemic,” Wigglesworth added.

Assembly member Jim Wood (D-Santa Rosa), who as chair of the Assembly Health Committee controls which health policy legislation gets a hearing, cast doubt on the feasibility of single-payer late last year, saying the state should instead build on the Affordable Care Act. Supporters fear his potential opposition could block the bill.

California’s proposal, if approved, could test the Biden administration’s willingness to grant states freedom to enact sweeping health care reforms such as a single-payer system. Becerra, California’s attorney general, has expressed unwavering support for single-payer and would be positioned to weigh in on the plan should he be confirmed as President Joe Biden’s Health and Human Services secretary. Becerra’s Senate confirmation hearings start Tuesday.

“The president himself doesn’t necessarily have to support single-payer on a national level to allow states to move forward,” Kalra said.

The introduction of a single-payer proposal this year forces Newsom into a delicate position. The first-term governor, who said he supported the creation of a state-based single-payer health care system when he ran for governor in 2018, has since distanced himself, expressing doubt that California can embark on such a massive transformation on its own.

Newsom’s office did not respond to a request for comment.

Newsom, once seen as a rising Democratic Party star, faces a burgeoning recall effort driven by state and national Republicans. The embattled governor is under fire for a clumsy and confusing vaccine rollout; backlogs and fraud at the state’s unemployment agency; and violating his own public health rules when he dined maskless last year at the ritzy French Laundry restaurant. Democrats have also criticized the governor for his pandemic response, including his inability to reach a legislative deal to open schools to in-person instruction.

With the March 17 deadline looming for the recall to qualify for the ballot, Newsom will undoubtedly be asked to weigh in on the single-payer proposal.

“It’s not a factor in this calculation,” said Stephanie Roberson, lead lobbyist with the California Nurses Association, which campaigned for Newsom during his gubernatorial run. “Our concern is people are dying and losing their health care. We’re sorry if this parallels some untimely political event for the governor.”

Last year, Newsom convened a commission to study the possibility of a single-payer system and other ways to cover more Californians. But the pandemic stalled its progress and the commission hasn’t met since August.

The exorbitant cost of developing a new system is a major hurdle. In 2017, the last time California lawmakers floated a single-payer proposal, a state legislative analysis pegged the projected cost at $400 billion a year. Assembly Speaker Anthony Rendon shelved the proposal, calling it “woefully incomplete,” in part because it was unveiled without a financing mechanism.

Kalra, who has not identified a way to pay for the massive transformation and said he’s unsure whether it would require higher taxes, will undoubtedly face similar skepticism over how to fund it.

His bill calls for CalCare to cover comprehensive health services far beyond what’s required under the Affordable Care Act, including traditional medical services, dental care, prescription drug coverage, long-term care, and mental health and substance use treatment.

It would also end all out-of-pocket patient costs — including premiums, copays and deductibles — and ban health care providers participating in CalCare from operating in the private marketplace. CalCare’s governing board would determine health care prices and set rules for providers.

While single-payer would require a significant initial investment, Kalra argued, the state might be able to reroute federal dollars for Medicare, Medicaid and other programs into CalCare. The system would also eventually cost less, he said, because it would simplify health care financing, end for-profit care and cut out private middlemen.

“Look, we’re already paying more than $400 billion a year for our current system,” Kalra said. “We currently have the most expensive health care system in the world, and our outcomes certainly don’t get us what we pay for.”

The latest estimates, based on federal data, show health care spending in California is about $450 billion a year, according to Gerald Kominski, a professor of health policy and management at the UCLA Fielding School of Public Health.

But switching to single-payer isn’t as simple as transferring those expenses to a new system, he said. Somehow, the money that employers and employees contribute to private health insurance plans needs to be funneled into a unified system.

“The mechanism you use to do that is almost certainly some form of taxation,” Kominski said. “It’s literally impossible for a single-payer system to move forward without capturing those current expenditures. They’re too substantial.”

While the proposal would not ban all private health insurance, it would allow only for coverage that supplements CalCare. The aim is to enroll all Californians, eliminating the need for private health coverage, said Carmen Comsti, a regulatory policy specialist with the California Nurses Association who is also on the state’s single-payer commission.

But that could present enormous challenges. Nearly 6 million Californians are enrolled in private health coverage regulated by the federal government. Enrolling them in CalCare could require a change in federal regulatory law, and would likely require changes to the state constitution — which, in addition to passing tax increases, could force single-payer backers to obtain voter approval.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.