An Insurance Giant Stalls Mental Health Care Reform

When Jennifer’s 15-year-old daughter was back in the hospital after another psychiatric emergency, Jennifer knew something had to change. 

She tried to find a long-term mental health care facility in the family’s home state of Michigan, but the facilities they found only offered short-term care. Eventually, she found a residential treatment center 11 hours away in Missouri that treats adolescents struggling with mental health issues. 

At $10,000 per month, her daughter’s stay cost the family $80,000. Although the treatment was deemed medically necessary by a psychologist and primary care physician and there were no available in-network clinics that could provide the correct care, Blue Cross Blue Shield of Michigan (BCBSM), the state’s largest health insurer, refused to cover the treatment. 

“I borrowed against my 401(k), I took out whatever cash I had, and then the rest of it has been through loans, and a lot of them are pretty high-interest loans,” said Jennifer, who requested to only use her first name. “To say it’s financially devastating would be an understatement. Blue Cross is doing everything in their power to make sure that we don’t get the care we need.” 

For months, mental health advocates fought for legislative change to help families in need. House Bill 4707 aims to address part of the state’s mental health crisis by requiring health insurers to cover all medically necessary mental health and substance use disorder treatments. Michigan isn’t the first state to try to expand coverage for these treatments; other states including California and Illinois have passed similar legislation. 

The legislative push in Michigan hasn’t been as successful: After extensive lobbying by BCBSM, the legislature adjourned last week and didn’t vote on the bill, leaving families in limbo until next year. The insurer argued that the real issue is provider shortages, not insurance coverage. They also claimed that covering out-of-network providers would allow people to seek care wherever they want, regardless of cost.   

Over the past 22 years, BCBSM has spent almost $7.4 million lobbying in Michigan.    

In response to an interview request, BCBSM provided a statement that said “increasing access to behavioral health care is a top priority, which is reflected in our market-leading long-term strategy to deliver innovative whole-person care that integrates both behavioral and physical health care.” 

“Michigan can’t do this for families that are hurting?” said Angela Kimball, senior vice president of advocacy and public policy at Inseparable, a mental health advocacy organization that championed the legislation. “It’s painful.”  

“The Hardest Thing We’ve Ever Had To Do”

More than 1.4 million Michigan residents have a mental health condition, but nearly 40 percent go without care. Part of the reason for this is cost. Millions of Michiganders also live in areas where mental health professionals are few and far between, all of which forces people like Jennifer to seek out-of-network care. 

This reflects a larger trend across the United States, where one in five adults experience mental illness. However, insurers frequently charge higher copays for mental health care and enforce more restrictive prior authorization rules, despite the federal Mental Health Parity and Addiction Equity Act — which requires insurance coverage for mental health and substance abuse care to be no more restrictive than coverage for other medical conditions.   

In Michigan, Jennifer’s story is far from unique. After being laid off from her job because she had to spend her days helping her son navigate a mental health crisis and dealing with insurance, another mother received a letter on October 9 from BCBSM stating that her $382,000 worth of claims were denied. The reason? The treatment facility that her son went to is out-of-network, even though BCBSM didn’t have any appropriate in-network providers for her son’s condition. 

These stories are so common, in fact, that a group of parents created a Facebook group called Advocates for Mental Health of MI Youth, which has around 1,300 followers. 

“It’s just common knowledge that once you get to this point with a serious mental health issue, everybody who has gone through it understands that there’s just no way to get the help,” said a mother who settled with Blue Cross Blue Shield for an undisclosed amount of money and requested anonymity. 

Under the mental health reform legislation as it was originally proposed, health insurers in Michigan would be required to provide coverage for out-of-network services at no extra charge if there is no in-network provider available within a reasonable distance. The bill would also prohibit insurers from covering only short-term symptom reduction of chronic conditions, thus aiding in long-term recovery. 

All of this would shift “the financial incentives onto the plans to actually broaden their networks, and, frankly, to provide more appropriate care that’s going to keep people from needing higher levels of more intense care,” said Kimball, senior vice president of advocacy and public policy at Inseparable.. 

However, when the bill was introduced this summer, BCBSM immediately started pushing back. 

At the Michigan House of Representatives’ Insurance and Financial Services Committee session in June, BCBSM state government relations manager Gabriel Basso argued that requiring insurers to cover out-of-network services would mean someone could decide they would “rather receive my treatment on the beach in Malibu,” he said. “We’d be forced to pay full freight for that.”    

When Jennifer, who attended the committee session, heard this, she was infuriated. “It’s not a vacation for a family. It’s not a vacation for a child. It is hard work. It is a medical need that they have,” she said. “It’s the hardest thing we’ve ever had to do as parents — is take our child out of state and sign her legal rights over to basically a custodian.” 

The committee passed the legislation along for a second reading in the House. Four representatives, including Rep. Mike Harris (R-Mich.) and Rep. Joseph Aragona (R-Mich.), opposed the bill. Both representatives met with BCBSM lobbyists this summer, and the company reported paying for food and beverages. Overall, the insurer has spent just over $180,000 on lobbying so far this year, according to the company’s financial report.

BCBSM also asserted that HB 4707 conflicts with federal mental health parity laws.  

In their statement to The Lever, BCBSM wrote they comply “with federal mental health parity requirements” and they “believe that House Bill 4707, on the other hand, would hinder patients from getting the right care, at the right time, at the right place, from an appropriately licensed provider.”

The Michigan Department of Insurance and Financial Services (DIFS) — which previously expressed their support for the bill, according to advocates — released a statement in late October echoing BCBSM’s concerns. They wrote that the bill “would require DIFS, as the state’s health insurance regulator, to enforce two different sets of standards — federal and what is proposed under this bill on state-regulated plans.”

Kimball and other advocates reject this argument. “The federal parity law has been in place since 2008, and there have been state commercial insurance regulations in place since time immemorial. They coexist,” Kimball said. “In my mind this is a red herring that confuses the issue.” 

In response to an interview request, the regulatory agency DIFS sent an email to The Lever stating they have “not taken a position on HB 4707. The department is reviewing the proposal and providing feedback as the bill works through the legislative process. DIFS’ role is to implement the law as set forth by the legislature, and we are here to serve as a resource for policymakers, consumers, and others regarding health insurance issues in Michigan.”

Close Connections 

This is not the first time BCBSM has stymied efforts at expanding health care accessibility in the key battleground state. 

During the 2018 gubernatorial race, now-Gov. Gretchen Whitmer (D) was the only candidate who didn’t support a single-payer health system. Whitmer has close ties to BCBSM: Her father was president and CEO of the company from 1988 to 2006 and she is friends with the current BCBSM CEO and president, Dan Loepp. The company also raised almost $145,000 in donations for Whitmer’s 2018 campaign. 

It’s hard to say what role these connections played regarding HB 4707, but on Nov. 10, the legislature adjourned without voting on the bill. The bill remains active, however, so the legislature could discuss it when they reconvene next year. 

In the meantime, families like Jennifer’s are left to foot the bill for essential care.   

Now 17 years old, Jennifer’s daughter is excelling. She has a part-time job that she loves and recently received two college acceptance letters. The residential treatment center saved her life, Jennifer said. But the claims that BCBSM refuses to pay have harmed Jennifer’s family in more ways than one.  

“My daughter, she’ll be  entering college soon and I don’t know how to help her,” Jennifer said. “I’ve taken on a second job. I’ve worked as much as I can to make up the difference, but the stress of that has weighed on me. It starts to really impact your entire life.”