Simple Fairness: Ending Discrimination in Health Insurance Coverage of Addiction Treatment

Sonja B. Starr, University of Michigan Law School


Consider these facts: An often-debilitating brain disease afflicts millions of Americans. This disease is one of the country’s greatest killers. Its victims frequently suffer from depression and many physical ailments, and often become unable to work effectively. The disease costs the U.S. economy hundreds of billions of dollars annually–more than cancer, more than heart disease. Fortunately, although no cure exists, medical treatment can enable recipients to live normal , healthy, and productive lives. Treatment is cheap compared to many other common medical procedures and is highly cost-effective. Now consider this: For the vast majority of victims of this disease, effective treatment is inaccessible. Most health insurance plans either do not cover it or put a variety of limits on coverage that do not apply to other diseases. Unless they can pay out of pocket, victims cannot get the treatment they need. To make matters worse, they are often told that their condition is not a real disease, or that it is their fault, or that suffering from it makes them a criminal. The disease is drug and alcohol addiction, and the facts are real. Ubiquitous benefit caps on insurance coverage of substance abuse treatment put effective recovery out of reach for most addicts. In this Note, I assess the nature of this problem and some possible ways to address it. The general principle that I advocate is substance use treatment parity, which means that insurance plans should provide coverage for addiction treatment that is equivalent to that provided for analogous conditions. In some cases, failure to provide such parity shoudl be considered illegal disability discrimination on the part of employers and insurers. Moreover, new laws should be adopted to require insurance parity explicitly.

In Part I, I review the current status of insurance coverage of addiction treatment and assess the scope of the shortfall and possible reasons behind it. In Part II, I set forth the case for insurance parity, including the nature and costs of the disease of addiction and the efficacy and cost-effectiveness of treatment, and consider some counterarguments. In Part III , I analyze the requirements of the Americans with Disabilities Act (ADA) as they pertain to insurance parity, drawing on the precedents set by recent challenges to other types of insurance discrimination. I conclude that the ADA should be interpreted to require parity in some cases, but that the potential effectiveness of this litigation strategy is limited -- new reforms are necessary. In Part IV, I consider the strengths and weaknesses of current legislative proposals to accomplish insurance parity, and focus especially on the Substance Abuse Treatment Parity Act. Finally, in Part V, I offer my conclusions and recommendations for legal change and advocacy.