A Health Insurance Disaster

	A concerted effort to mandate insurance benefits for psychiatry in all 50 states was undertaken in the 1980s in the guise of a plan for “health care reform.” The results in Kentucky, one of the first to implement the plan, have been disastrous.

Freedom investigation conducted into mental health insurance parity in 1996 (“The Legislative Fast One,” Freedom Vol. 29, Issue 2) found that the concerted effort to mandate insurance benefits for psychiatry was initially pushed in the 1980s in the guise of a plan to bring “health care reform” to all 50 states.

The plan involved grants from the Robert Wood Johnson Foundation (RWJ) to the states for psychiatric programs, starting with RWJ’s Mental Health Services for Youth Program. Grant conditions called for states to match RWJ’s funds with taxpayer funds via Medicaid, under such an arrangement as five state dollars to every one of RWJ’s dollars. Continuation of grant funds required that states pass laws to ensure long-term participation in the program.

In Kentucky, one of the first states to implement RWJ’s plan, grant conditions also resulted in legislation (House Bill 250) which required the state to expand private insurance coverage for mental health services for youth. According to state legislative sources, RWJ helped to pen the law, stepping far over the bounds of a 501(c)(3) organization. Regardless, RWJ’s program captured taxpayer money and established mental health parity in effect by mandating that insurance companies subsidize mental health.

The result of the legislation has been catastrophic: Insurance rates escalated—up to as much as 200 percent—and estimates placed Kentucky’s state debt increase at $2 billion due to implementation of the RWJ health reform policy. Moreover, Kentucky’s children saw no benefits from the program.

“Health insurance was to be made less expensive under the plan,” says Kentucky State Senator Dick Roeding. “But exactly the opposite happened—insurance is more expensive and less accessible because of it.”

The provisions of House Bill 250 were modified in 1996 as a Senate Bill, and again in 1998 as another House Bill (HB 315). “Each one has made the situation worse,” says Senator Roeding.

By the time the results were in, however, similar plans had been initiated in most other states. The total losses to the states and to the taxpayers has never been calculated. But evidence is overwhelming that mandated benefits are driving basic health-care coverage out of range for millions—and a growing number of legislators are voting against initiatives for parity in any form.