What Is Timothy's Law?
In March of 2001, twelve-year-old Timothy O’Clair hanged himself in his bedroom closet. Timothy and his family spent nearly five years seeking the necessary treatment and services for his emotional disorder. When Timothy’s parents, Tom and Donna, sought help for their son, they quickly ran into barriers. Those barriers were the limits on coverage under insurance policies for mental health and substance abuse services. It is Tom and Donna’s belief that had their health insurance policy provided equal coverage for mental health and chemical dependency services, as are provided for other health services, Timothy would be here today.
The O’Clair’s experience is not unique. Every private insurance policy in New York limits the amount of inpatient and outpatient coverage provided for mental health and substance abuse services or requires additional co-payments from the insured. Simply put, these policies discriminate in the coverage they provide based upon diagnosis of mental illness or substance abuse disorder.
In an effort to eliminate this discrimination, Timothy’s Law goes beyond the Federal Mental Health Act, enacted in 1996 and renewed again in 2002, to completely eliminate discriminatory and unequal insurance coverage for mental health and substance abuse services by insurance companies. Timothy’s Law mandates that insurance providers covering any health care services must also provide coverage for mental health and substance abuse services, and that coverage and cost must be ‘on par’ with all other health care services covered under such policy.
In 2002, PricewaterhouseCoopers conducted an actuarial study on similar legislation regarding the estimated cost to mandate such coverage in insurance policies. Based upon the prior experiences of thrity-four other states that have already passed some form of parity, the actuarial studies conducted on the implementation of parity in those other states, and the particular circumstances of New York, the final report estimated the cost of implementing mental health and substance abuse parity legislation at $1.26 per insured person per month. Had mental health and substance abuse parity been the law, it would have cost $1.26 per month to provide Timothy with the mental health service coverage he needed, rather than charging his parents hundreds of dollars per month. More importantly, Timothy would have received the services he needed and most likely would be here today.
The lack of parity has forced thousands of other families throughout the state, including the O’Clairs, to relinquish custody of their children with mental illness, solely for the purpose of getting such children the mental health services they need. Such placement provides the child unrestricted access to mental health services through Medicaid. However, in situations like this, publicly funded social service programs must also pay for the child’s housing, education, and other health care expenses, costing as much as hundreds of thousands of dollars per year for each child.
With passage of Timothy’s Law, New York State could avoid much of these expenses by returning the cost of providing mental health care to the proper sources – health insurers and the intact family unit.
MHANYS believes that saving the millions of dollars associated with caring for these children in public programs would more than offset the additional $1.26 per person per month insurance insurance premiums would experience.
$1.26 per month is a very modest cost when contrasted with the costs associated with undiagnosed and untreated mental illness and chemical dependency. Left untreated, these ailments can lead to or contribute to accidents, job turnover, interpersonal conflict, disability, worker’s compensation, involvement with the criminal justice system, disrupted lives and families, and increased dependency on public resources. In fact, the Journal of the American Medical Association estimates the cost of lost worker productivity, due to depression alone, at more than $44 billion annually, nationwide.
The enactment of Timothy’s Law ends the discriminatory practice of providing unequal insurance coverage based on diagnosis, help curb the stigma associated with mental illness, and will allow children like Timothy to receive the services and treatment they need to live full and productive lives.