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Obama Mental Illness Parity Regs Fail the Seriously Mentally Ill

11/08/2013 05:58 pm ET | Updated Jan 23, 2014

The Obama administration announced new regulations requiring private insurers to do what the federal government wont: provide health care coverage for mental illnesses equal to that provided for other physical illnesses. The new regulations will help many, but only few of the most seriously mentally ill. And while requiring private insurers to end discrimination against mental illness is to be lauded, it is unconscionable, dangerous and expensive to allow the federal government to continue its own discrimination.

President Obama should focus any incremental social service and health care programs on those who need it most. Over half of those people with the most serious mental illness, schizophrenia, do not work and therefore do not have private insurance. The new regulations will mean little to them. They rely on Medicaid. Medicaid reimburses states for roughly 50 percent of the cost of caring for the truly indigent. But an obscure provision of Medicaid law, called the "IMD Exclusion" prevents Medicaid from reimbursing states for the care and treatment of people who are between 18 and 65 years old and reside in state psychiatric hospitals. As a result states bear 100 percent of the costs of state psychiatric hospitals and have learned by kicking people out they can get reimbursed by Medicaid for 50 percent of their care in the community. So kick them out they do.

A report I co-authored with lead author Dr. E. Fuller Torrey of the Treatment Advocacy Center found that in 1955, ten years before Medicaid was enacted, there were 340 public psychiatric beds available per 100,000 population. In 2005 there were only 17 public psychiatric beds available per 100,000 population. 95 percent of the beds available in 1955 were no longer available in 2005. We are now short over 100,000 beds for the most seriously mentally ill and that assumes we had perfect community services which we don't.

The lack of beds has had a profound effective on crime. The Economist found as the availability of psychiatric beds go down, the number of jail cells goes up. It is now leaders in criminal justice, rather than mental health, who have become the most vociferous advocates for the most seriously ill. In an op-ed in the Albany Times Union, Chief Michael Biassotti, Immediate Past President of the New York State Association of Chiefs of Police wrote on the impact of the failure of Medicaid to provide parity coverage has had on New York.

Because state hospitals (close)... local psychiatric hospitals become overcrowded. The psychiatrists are put under intense pressure not to admit patients and to discharge those admitted sicker and quicker to free beds for new arrivals. Anyone well enough to walk in and ask for help, is generally not sick enough to be admitted.

This makes involuntary admission -- becoming a "danger to self or others" -- the only path in. That's when our officers are called on to defuse the potentially dangerous situation and transport the mentally ill individuals to psychiatric hospitals.

We wait hours for psychiatrists to evaluate them, only to find the doctor overrules us and refuses to admit the patient. If the individual is admitted, they will generally be discharged prior to being fully stabilized or having effective community services put in place.

The easier solution for our officers is to take people with serious mental illness to jail, something we are loath to do to sick people who need help, not incarceration.

To develop his policy, President Obama rounded up the usual suspects: those in the mental health industry. He ignored the National Association of State Mental Health Directors. Their members are responsible for the care of the most seriously mentally ill and strongly encourage the ending of Medicaid discrimination. He also ignored those in criminal justice. The new regulations are welcome, but Obama must end the discrimination that affects the most seriously ill.

DJ Jaffe is Executive Director of Mental Illness Policy Org., a non-partisan think tank on serious mental illness.