Lawmakers consider hiking fines for insurers who flout Georgia’s mental health parity law

Georgia officials on both sides of the aisle are proposing legislation aimed at holding insurance companies accountable when they fall short of the long-held promise of mental health parity, which is the idea that insurance coverage for mental health should be on par with coverage for physical health. The push comes after Georgia Insurance Commissioner […]

Georgia officials on both sides of the aisle are proposing legislation aimed at holding insurance companies accountable when they fall short of the long-held promise of mental health parity, which is the idea that insurance coverage for mental health should be on par with coverage for physical health.

The push comes after Georgia Insurance Commissioner John King issued millions in fines for mental health parity law violations in January, and there is growing bipartisan agreement that insurance coverage that exists for mental health on paper is not always honored by insurance companies.

Advocates say the $25 million in fines recently issued by the Georgia Department of Insurance against insurers for 2022 parity law violations are not enough to deter companies from reoffending, but state regulators call the fines just a warning.

“It’s my hope that our fines are significant enough to cause pain in insurance companies in continuing this behavior. Our fines were $25 million. They will not go down. If the behavior continues, they will only increase,” King, a Republican, said at a recent press conference.

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But the fines also expose how complex the insurance industry is, as well as its failures. 

Sarah Phillips, associate director in the Carter Center’s Rosalynn Carter Mental Health and Caregiver Program, said at a recent House insurance subcommittee meeting that while the recent fines issued are “significant,” they only helped expose “widespread” noncompliance. She said that the existing penalties “risk being treated as a cost of doing business, rather than a true deterrent.”

In an attempt to step up pressure on insurers, House Republicans introduced a legislative package updating the state’s enforcement tools, including increasing fines the state can levy against companies and consumers.

For example, House Bill 1262 would update fines that haven’t been touched in decades. Under current law, the commissioner is often capped at issuing a $2,000 fine for those unknowingly violating the law and $5,000 for those who doing so knowingly, which are amounts House Insurance Committee Chairman Eddie Lumsden, an Armuchee Republican, said have remained unchanged for 15 and 30 years, respectively. The new legislation would increase those maximums to $10,000 and $25,000.

“While those penalties may once have represented a meaningful deterrent, inflation and market growth have significantly eroded the impact that those fines might have,” Lumsden said to the subcommittee.

Lumsden’s bill is part of a recently unveiled legislative package that is aimed at curbing insurance coverage costs. State Rep. Matt Reeves, a Duluth Republican, said at a recent press conference that the increased fines are “not a cost of doing business” but a “true penalty that has teeth.” He said the legislation would also allow the insurance commissioner to consider past violations when insurers are filing justifications for rate increases.

Another bill in the package, House Bill 1344, came out of a “blue ribbon” study committee chaired by Reeves that increases nearly 40 additional fines and cracks down on insurance fraud, such as staged accidents.

As lawmakers look to update insurance regulations, advocates say that the true cost of insurance noncompliance is the human suffering it causes. 

Roland Behm, a mental health policy advocate, described a system of “friction” designed to save insurers money at the cost of patients’ health. He described networks with “phantom providers,” where families in need of mental health care are given a list of providers to contact who often don’t have any availability.

“Welcome to ‘parity theater.’ Parity theater is where everybody says the right words, and everybody is fully committed,” Behm said. “Guess what? The family trying to find therapy for a suicidal child isn’t interested in ‘committed.’ They need an appointment.”

Pointing to data from Children’s Healthcare of Atlanta, Behm said even when care is deemed medically necessary, insurers only covered post-discharge services for pediatric behavioral crises about 40% of the time.

“The system tells us the good news: You have a network. Do we? Can we get medically necessary care when it’s needed?” Behm asked. “Not reliably, and not when it matters.”

Behm argued that navigating the system in search of care is like a “personal endurance test” characterized by specific “frictions” the insurance industry uses to deny or delay care, such as internally defining medical necessity below what state law requires or offering “phantom” networks with a list of providers that are either deceased, retired or not taking new patients.

Behm added that this system creates a “crisis conversion machine” where delayed care inevitably becomes an emergency department visit or a legal issue.

Despite the bipartisan support for parity, state Sen. Nabilah Parkes, a Duluth Democrat who is running for insurance commissioner, introduced a legislative package that she argued goes much further than the Republican plan. She said that insurance companies can currently raise rates without much state approval, and her plan includes a requirement that the commissioner approve rate increase filings before they take effect.

“If Republicans were serious about regulating insurance companies, they would focus on making sure Georgia has prior approval, just like other states do. What is the insurance commissioner doing, if not regulating rates?” Parkes said.

Parkes also called for an end to “ZIP code discrimination,” alleging that insurers penalize working class and minority neighborhoods based on location rather than actual risk.

For Josh Carter, grandson of the late former First Lady Rosalynn Carter, the fight for parity is based on his own struggles navigating the system following the death of his brother and a rare disease diagnosis for his newborn son.

“Life throws challenges across every social, economic, racial, geographic and political boundary. A mental health crisis can take over every part of your health, your life, and it can affect those around you, just as any other devastating condition can,” Carter said.

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