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Skewering the mentally ill upon Morton’s Fork

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On the morning of September 16, 2013, 34-year-old Aaron Alexis, a former Navy reservist working for a military subcontractor, entered the Washington Naval Yard, a secure military facility, as if he was showing up for work. Since he had clearance to enter the facility, no one asked to look inside his backpack, which contained a sawed-off shotgun and an automatic pistol.

Shortly after entering the Naval Sea Systems Center building, Alexis headed to an atrium overlooking an employee cafeteria, and opened fire, starting an hours-long rampage that forced a portion of central D.C. into temporary lockdown. By the time it was all over, Alexis killed a dozen civilian workers and wounded three more people, including a police officer. Ultimately, Alexis was cornered in a third-floor cubicle and died in a shootout with the police.

After the shooting, Alexis was revealed to have a history of violent altercations with others, including one he explained as a rage-fueled blackout. Prior to the Naval Yard shooting, Alexis had a history of work performance issues, the most recent of which had been addressed just a few days before the shooting, although it appeared that Alexis did not specifically target any of his co-workers. The FBI released notes left behind by Alexis that suggested that he was delusional. He explained that a barrage of ultra-low-frequency waves had driven him to his attack. (UF waves also figure prominently in conspiracy theories regarding government mind control operations.) On his shotgun, he scrawled, “end the torment,” “better off this way” and “my ELF weapon.” Before the attack, he complained of hearing voices, and had reportedly sought help twice from VA hospitals.

Cases of mentally ill mass shooters such as Alexis raise the question that if these individuals had access to the care they needed to treat their mental health issues, perhaps tragedies such as the Naval Yard shooting could have been prevented. That is speculative at best, however, as it assumes that someone as sick as Alexis would seek out and participate in the level of care he would need to prevent his violent actions. But what if that were true? What then? After all, Alexis himself sought help at the VA; one wonders what treatment funded by private insurance could have done.

The analysis

To find out, National Underwriter conducted an extensive survey of health insurance plans across the country by pulling data from Insurance Finder, an online tool that is at the heart of the insurance exchanges mandated by the Patient Protection and Affordable Care Act (PPACA). Those seeking low-cost and subsidized coverage can use the Insurance Finder to locate health plan options open to them in their state of residence. The Insurance Finder then displays all available options with details on each plan, including:

  • the carrier
  • estimated monthly premiums
  • percentage of policies that deviate from the average premium (termed a “surcharge”)
  • percentage of applications that are turned down
  • individual and family deductibles
  • out-of-pocket limits
  • annual maximums

The plan also details information on specific components of the coverage, such as mental health care benefits and addiction and rehabilitation benefits. National Underwriter went through every state and the District of Columbia to see how much variety there was between these offerings. We used a sample template that fit the profile of many spree killers and mass murderers: a single male between the ages of 26 and 64. To seek as broad a selection of health plans as possible, we did not select any special conditions and when asked if we found health insurance difficult to afford (who doesn’t, really?), we answered yes.

We sought health plans for individuals and families, rather than health plans through work. The idea was to find coverage for someone on their own. Searching the Insurance Finder will prompt the user for both a state and a ZIP code. Again, to get the broadest selection possible, we entered in the ZIP code with the highest population in any given state, as determined by the U.S. Census Bureau. Usually, these centered on a particular section of the largest city in the state. We indicated that coverage was to start on 11/01/13. We indicated that the coverage was for one person who did not use tobacco. Then we hit ENTER and waited as the site churned back our results.

The results were, to say the least, interesting.

The number of possible health plans that came back for each state varied wildly. Some states (e.g., California and Illinois) returned several hundred records while others (e.g., Arkansas and Montana) returned only a handful. Some states should have had huge selections, but did not (Michigan and Florida) while others were sparsely populated states with a surprising variety in health plans on the market (Idaho and Montana).

We arranged the returns by estimated monthly premium, from high to low. We then took the five most expensive policies, the five least expensive policies, and a block of policies in the center of the cost range. We compared all fifteen to each other to get a sense of how much they varied from each other, and to see what kind of care the policies offered. In some states, such as Alabama and Alaska, the number of available options was less than 15, so the entire selection was sampled.

While looking through all 50 states, it quickly becomes clear that each state’s market has its differences from the rest, with markets of richer states having more expensive plans on average than poorer ones, with some markets tending to offer very little mental health coverage compared to others, and with some markets showing very wide differences among their own plans according to cost. That said, when comparing the states all together, the three brackets of health plans – most expensive, moderately expensive and least expensive – exhibited some telling similarities.

The most expensive policies, on average, tended to offer the most generous benefits, typically offering both in-patient and out-patient coverage, and with small to non-existent deductibles, out-of-pocket limits, co-insurance and co-pays. However, the more generous the policies themselves were, the more costly they became, to the point that when looking at the most expensive policies in states such as California ($1,039/mo) and New Jersey ($3,607/mo) the policies themselves offer seriously diminishing returns, as the ability to afford insurance at that cost suggests a separate ability to pay for the provided mental health coverage benefits entirely out of pocket. At that point, why not self-insure?

The middle bracket of policies tended to charge much more affordable premiums, typically in the $300-$500 range, but with that came higher levels of surcharges, higher deductibles, higher out-of-pocket limits and either no mental health benefits, or those hitched with substantial premiums and/or co-insurance.

The lower bracket showed the same dynamics of the middle bracket, only much more so. The premiums were very low, but the policies tended to provide no meaningful coverage of any kind, requiring such high deductibles, co-pays and/or co-insurance as to provide no coverage for all. True, the policies would eventually cover the costs of very expensive treatment, but they would drive the policyholder into financial ruin well before then. Moreover, the lower-end policies very commonly did not cover mental or behavioral health treatment at all.

The outcome

This is the three-pronged Morton’s Fork (a selection of choices that really lead to the same outcome) that appears to greet any customer looking to buy health insurance primarily to protect themselves against the possibility of mental illness. The policies are either so expensive — as in New Jersey — that those who could afford them could also self-insure, and therefore don’t really need the coverage. The policies in the middle — as is the case in Kentucky — tend to have sufficient deductibles and other frictional costs as to thin the coverage provided to the point where seeking treatment still requires the patient to incur substantial financial expense on top of their insurance, which defeats the point of having coverage in the first place. The cheapest policies — as in Texas — provide no coverage at all, and simply drain income from those who can least afford it while delivering very little real value.

So what would this mean for an individual like Alexis, who wants to seek treatment before something tragic happens? A 2012 paper by the American Psychiatric Association estimated the average in-patient cost per day for schizophrenia, bipolar disorder and depression ranges from $700 to $900 for the privately uninsured (it tends to be cheaper for Medicaid patients) and the average stay runs between four and seven days. A $800/day stay for seven days is a $5,600 impatient expense.

According to figures from BMC Psychiatry, the average cost for antipsychotic medication ranges between $5,000 and $8,000 a year (and rising by close to 7 percent every year), with many patients on more than one prescription.

Psychotherapy regimens vary considerably, but for a serious mental illness, a treatment schedule of a weekly, hour-long session for a whole year, is not uncommon. The average cost of this, through private services remitted to insurance, can run as high as $200 per session, but costs of $100 are more in the median.

A hypothetical case study

So, meet Martin White, a 43-year-old single male with no family to cover, and with no history of illness or other special health care needs. He is concerned about mental illness, and rightly so. After procuring coverage, he begins hearing voices urging him to commit violent action, but he is aware enough of his problem to seek help because he is insured; that’s what the insurance is there for. But Martin is seriously ill. After a mental breakdown among friends and family that nearly turns violent, he commits himself into an in-patient facility for a week-long diagnosis and initial treatment of schizophrenia ($5,600). Afterwards, he seeks weekly therapy for the following year, at a cost of $100 per session. In conjunction with his therapy, he is given a pair of antipsychotic prescriptions that cost $622.20 and $567.00 a month, respectively. How much will his insurance help him?

It depends on where he lives. If Martin is in Kentucky, the most expensive plan through, his inpatient stay would cost him $1,020 ($500 deductible, 20% co-insurance afterward). His outpatient care would bring him to his $3,000 out-of-pocket limit in less than half a year, with him paying for each session until he hits his limit.

Martin is likely to do better with his scripts, though it really depends on whether his insurer considers his drugs specialty drugs (which typically carry a co-pay) or simply brand-name drugs, which carries a much more affordable co-pay. Assuming a $35 copay for each of his scripts, that’s $70 out of pocket. If his drugs come with a coinsurance requirement, Martin’s out another several thousand dollars unless he hits his out-of-pocket limit. And if Martin’s plan doesn’t consider drugs to be part of the out-of-pocket limit, then he’s out even more.

If Martin is in Texas, virtually no plans cover mental health treatment, and for those few that do, they carry combined co-insurance, deductibles and out of pocket (OOP) limits that would cost Martin as much as $10,000 a year, obviating the role of his insurance. If his drugs are not considered part of the OOP limit, his costs are even higher.

If Martin is in New Jersey, he’s likely to pay well more than $1,000 a month for his coverage, which is likely to carry a $2,500 deductible and either copays ranging from $300 to $500, or co-insurance rates as high as 50%.

If Martin is in California, there are plenty of cheap options available, none of them good. The average deductible is $4,000 with co-insurance ranging between 30 and 50 percent. He could go for a pricey plan, but they tend of have premium surcharges as much as 20 percent of the time, with rejection rates of as high as 33 percent.

There is no perfect state for Martin. There is no perfect plan. Wherever Martin goes, he can choose between the equally untenable options of paying for services he cannot afford, paying for coverage he cannot afford, or both.

Martin has been skewered upon Morton’s Fork. And when he gets sufficiently frustrated over it, or when the voices in his head get loud enough, he might do something that will put him on national television, and kick-start another discussion over what can be done about it. In the meantime, another Martin is watching it all and wondering what he can do to cover himself if he ever gets sick in the head. Looking closely at the options in front of him, he might conclude that yes, there is insurance out there for the mentally ill. But you’d have to be crazy to buy it. 

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