Commentary

Higher Premiums for Everyone

No one should deny that for those suffering from serious mental illness, the pain is as real as from physical injury or disease. But to mandate that insurers provide coverage for residential treatment for such conditions could create far more problems than it solves.

Mental health disorders differ from other types of illnesses in that they are often hard to diagnose, there are less rigid standards for treatment, and no definitive way to prove that a person has been cured. Recall that Woody Allen famously underwent psychoanalysis for 33 years.

While the California court ruling ostensibly only deals with certain serious conditions and residential treatment, it opens a slippery slope that has no natural limit. As E. Fuller Torey, a psychiatrist and author of “Surviving Schizophrenia” wrote, “When you start talking about mental disorders, that really is a black hole… If you start making it possible to define unhappiness as a medical problem … you could bankrupt the system.”

And while it is tempting to think that it is the insurance companies that will bear the cost of paying for the treatments, it is really the policyholders who will pay through higher premiums. Already, mental health benefits add 10 to 15 percent to insurance costs. This will only drive premiums higher. And higher premiums will lead to more people without insurance. Thus, the perverse result may be more people with both mental and physical illnesses getting less care.

Nor is there any definitive evidence that residential treatment is the most effective treatment for these conditions. Insurance companies may have an incentive to deny expensive treatments, but they are not always wrong. And the residential treatment industry is notorious for treatment programs that last precisely as long as insurance payments last.

This decision was well intentioned, but good intentions sometimes make bad law.