Are Insurance Companies Discriminating Against Mental Health Claims?

In previous posts, we have noted that disability policies often limit the disability benefits available for claimants who suffer from mental health disorders. For example, many policies limit recovery under a mental health disability claim to a 2 or 3 year period. In contrast, most disability insurance policies provide benefits for physical disability claims to age 65, and some policies even provide lifetime benefits for physical disability claims.

Recently, Representative Ruth Balser has introduced a bill in the Massachusetts state house that would prohibit insurance companies from treating behavioral health claims differently from physical impairment claims. According to Representative Balser, offering shorter benefit periods to claimants with mental health disorders is discrimination.

Supporters of the bill contend that the way that disability insurers currently handle mental health is based on stigmas and ignores available treatments options.  Supporters of the bill also argue that the bill will reduce government costs because individuals with mental health issues will no longer need to rely on Social Security or government welfare programs.

The insurance industry’s response is that requiring insurance companies to provide more coverage will cost businesses money because it will limit available options when buying insurance and force them to buy coverage that they do not want. The insurance companies also argue that the bill will actually result more people relying on government programs because they will not be able to afford the increased levels of coverage.

At the moment, the bill is still being considered in committee, so it has not yet become law. However, if the bill is ultimately passed, it could significantly alter the way insurance companies treat mental health disability claims, particularly if other states pass similar laws.

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