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HEALTH INSURANCE
Size Up Your Mental-Health Benefits

Health care costs continue their seemingly unstoppable ascent -- prescription-drug costs alone have been rising at a 15% annual clip. And mental illness, which can be chronic and often requires drug therapy for treatment, can be especially costly.

Knowing the cost of care makes it worthwhile to prepare yourself. You should evaluate your coverage so you understand what your plan will and won't pay for. Although the Mental Health Parity Act of 1996 prohibits employer-sponsored insurance plans from imposing lower annual and lifetime dollar limits for mental-health insurance than for other benefits, plans are looking for ways to control costs -- and possibly skimp on benefits. Here's what to look for in a typical health plan.

Number of visits

For therapy, you'll probably be covered for 20 to 30 outpatient sessions a year, and you'll be expected to pay 20% to 50% of the cost yourself. Counseling sessions range from $75 to $175, depending on where you live and the counselor's credentials. (Medicare covers 50% of most outpatient care, with no limit on the number of visits.)

But stated limits can be misleading. "Under managed care, what you get in reality isn't the same as what your policy says you get," says Dr. Nada Stotland, a psychiatrist in Chicago. To increase accountability, managed-care companies that monitor treatment typically require reauthorization after four visits. "Those reviews are based on critical guidelines and practice protocols," says Pamela Greenberg of American Managed Behavioral Healthcare Association, an industry group. "I think it creates a good system of checks and balances."

On the other hand, providers say restrictive oversight creates administrative hassles and can hinder treatment. "Some people have been depressed all their lives at a lower level," says John Rifkin, a psychologist in Boulder, Colo. "Now they become really depressed, and managed care wants you to finish up in four sessions. It just doesn't work that way."

Experts on both sides agree that short-term treatment can be effective when it focuses on improving self-image or enhancing relationships. Such treatment, called cognitive or interpersonal therapy, usually involves no more than 16 sessions.

Drug therapy

Experts also agree that medication, particularly combined with psychotherapy, offers state-of-the-art treatment for depression. But coverage can get complicated as employers try to balance drug therapy with accelerating costs. Medicare doesn't pay for prescription drugs at all.

Most plans charge a co-payment of about $5 for a generic prescription and $10 for a brand-name drug. Lately, that system has been expanded to include a third tier, says Eileen Setteneri of Watson Wyatt, a benefits consulting firm. If a patient selects a brand-name prescription and a generic is available, he or she must pay the difference, as well as the applicable co-payment.

Patients will also pay more for prescriptions that are outside the so-called "formulary" -- drugs for which the insurance plan has negotiated a discount. Co-payments can run as high as $50, or an insurer may decline to cover nonformularies altogether. Although Prozac is considered an effective antidepressant, for instance, many plans charge patients more for its use, or substitute Zoloft, a comparable drug that's less costly.

For all the juggling, some mental-health specialists accuse insurance companies of encouraging drug therapy at the expense of other treatments. "Not every depressed person needs to be on medication," says Dorothy Cantor, past president of the American Psychological Association. "Managed-care companies are tending to push people to medication because they assume it's going to be cheaper."

Studies suggest that people suffering from mild to moderate depression can be helped by psychotherapy, with or without drug therapy, and more serious forms of depression dictate both types of care.

Inpatient treatment

Most insurance policies limit hospitalization for mental illness to 30 days a year, and authorize care only when the patient is at immediate risk of committing suicide. (Medicare limits hospitalization for psychiatric services to a lifetime maximum of 190 days.) Because such treatment tends to be crisis-oriented rather than long-term, patients rarely hit the max, says Dr. Jerry Vaccaro of PacifiCare, a behavioral managed-care company. In fact, inpatient care is increasingly being supplemented or even replaced by intensive outpatient care, according to a survey of employer plans by William M. Mercer, a benefits consulting firm.

When hospitalization is being considered, authorization involves tough -- and sometimes unseemly -- distinctions, says Stotland. "There's one company that says, 'If the patient has not done something suicidal within the last 24 hours, we will not pay for care.' If we said the patient put a gun to his head 25 hours ago, the answer would be, 'Too bad.'"

Mental-health specialists argue that stringent bottom-line strategies are missing the point. "Employers have a kind of narrow view of, 'Look what it's going to cost to treat this person,' rather than saying, 'Look what it's costing me not to treat this person,'" says Cantor. Of the $43 billion annual cost attributed to depressive illnesses, about half is due to lost work days or productivity on the job.