Wall Street Journal blows it on coverage of mental health parity

More than 20 years ago, a senior colleague told me a good shortcut to weed through a business literature search: just limit the search to the Wall Street Journal. They cover most topics and usually get the story right. I’ve followed that advice a lot, even in the era of Google when searches are much simpler, and it’s still a good tip. Yesterday’s Journal, though, had an article that really missed the mark.

Here’s the headline and lead paragraph:

Law Prompts Some Health Plans To Cut Mental-Health Benefits

Members of the Screen Actors Guild recently read in their health plan’s newsletter that, beginning in January, almost 12,000 of its participants will lose access to treatment for mental-health and substance-abuse issues.

The article then continues to list other employers that have dropped mental health and substance abuse coverage in reaction to a new law that requires larger plans to treat such coverage the same way they treat coverage for physical ailments –if they offer mental health and substance abuse coverage at all. It quotes the Screen Actors Guild CEO saying it can’t afford the increase in costs caused by the mandate.

But a look at the data contained in the article itself demonstrates that the Journal has the story roughly backwards. Of firms surveyed by Kaiser Family Foundation, 69 percent were not changing their mental health and substance abuse benefits at all. Of the 31 percent that were changing such benefits, 66 percent were eliminating limits on coverage. Only 5 percent of the 31 percent (or about 1.5 percent of the total) were dropping their mental health coverage. In essence, the Journal decided for some reason to focus on this 1.5 percent of employers as the big story.

A closer read of the Screen Actors Guild (SAG) story also shows that this is a pretty atypical situation. Deep in the article it is revealed that the entertainment industry is among the top three in illicit drug and heavy alcohol use, so naturally they will have high mental health and substance abuse treatment costs. Second, the Guild’s decision only affects a plan that is open to members who make less than $30,000 per year. “Higher earners qualify for a more comprehensive plan,” it says, presumably one that includes mental health benefits.

As noted elsewhere in the article, the Congressional Budget Office projects mental health parity will raise premiums just 0.4 percent, hardly noticeable amid the typical double-digit increases. In addition, a leading actuary cites “ample” evidence that spending on mental health and substance abuse benefits lowers overall costs.

I’m going to give the Journal the benefit of the doubt on this one and assume it was just a poor choice of angle for the story. But it will be a bit disturbing if the story is a sign of the Journal aligning its traditionally independent news section with its reactionary editorial page under Rupert Murdoch’s ownership.

December 24, 2010

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