Parity for Mental Health: History and Consequences
By Vallerie Propper and Ginger L. Pomiecko
The mental health care problem
Mental illness has been historically considered different than general medical illness (those illness categorized by non-mental illness definitions) Mental illness only recently been recognized as a disease/disorder equivalent to general medical illnesses, and even more recently have we been able to make strides in treatment strategies and policy changes supporting the mental health consumer. . Perhaps due to our lack of knowledge, our inability to understand and outright fear of the mentally ill, mental disorders are still deeply rooted in social stigma. There are some people even today who think some mental illnesses are just the result of character flaws and should be overcome with sheer willpower. A recent survey of Americans found that stereotypes of the of the mentally ill consumer have not changed, and beliefs about this population from the general population are similar to those of the 1950’s..[i] Furthermore, doctors are often unable to treat mental disorders with a simple one-time visit and a prescription; but instead often require long-term and expensive care. With this in mind, it is no surprise that coverage for mental health is often not equal to that for traditional, physical illnesses otherwise known as general healthcare.
This difference in coverage does not reflect a lack of need. The
National Advisory Mental Health Council reports that each year 22% of the adult
population in the
While it is unclear if mental illnesses are wholly biologically based, it is thought that there are biological components which account for portions of disease affliction. This should be enough to require insurers to cover mental health costs. Unfortunately this is not often the case.
In the last fifteen years both state and federal governments have tried to address this through the enactment of mental health parity laws. Mental health parity laws prevent health insurance plans from discriminating between mental healthcare and general healthcare coverage.
Parity can take many forms; it may:
· Exclude substance abuse treatment
· Only apply to annual or lifetime benefit limits, meaning that there may be differences in the number of outpatient or inpatient visits allowed or amount of co-pays.
· Be limited to “biologically based illnesses” which usually include schizophrenia, major depression, paranoia, developmental disorders like autism, and others that are clearly linked to chemical or developmental irregularities[v]
· Not apply to employers who are self-insured (this will vary by state)
· Include exemptions for smaller businesses
Full parity (when discussing mental healthcare) refers to a law that does not allow any discrimination based on mental healthcare versus general healthcare.
The Roots of Parity
Treating mental illness.
Traditionally, mental healthcare coverage has been determined by each individual state. In fact, approximately 85% of mental health care costs in 1956 were paid for by the state. Not only did this funding supply treatment, but also housing, food, and employment opportunities.[vi] Over the years, however, financial support for mental health care started to come less from the state and more from private sources.[vii]
In the 70’s and 80’s (before the growth of managed care) costs to employers for treating mental illness and substance abuse of employees and their families began to climb. According to some estimates, the cost of treating mental health and substance abuse problems was rising at a rate almost double than the rate of other kinds of healthcare.[viii] Although very high priced services, like detoxification and long-term psychotherapy were responsible for a large part of this rate increase, many insurance plans began to cut benefits for all mental health and substance abuse services. These benefit cuts were further rationalized by many employers’ attitudes about mental illness.[ix]
There were several reasons in addition to cost that may have made it easier for insurers to decrease mental health coverage. First, it was thought that some people were taking advantage of mental health services by getting long courses of therapy when they may not have needed it. Secondly, others may have felt that chronic mental health problems and addiction should be public health responsibilities of the state. Thirdly, many did not think mental illness was a real disease at all and could be overcome with willpower and a commitment to lifestyle change. Lastly, still others may have thought not enough was known to successfully treat mental illness, suggesting any care would be wasteful.
The first parity laws
At the same time insurers
were reducing mental health coverage, more and more states were introducing
health insurance mandates. These
mandates placed certain restrictions and requirements on all employer health
plans (The mandates did notapply to self-insured
employers due to the federal Employee Retirement Income Security Act (ERISA) of
1974. This acti
prohibits a state’s regulation of self-insured companies). The growth of such
mandates, in conjunction with an increased advocacy for equal mental healthcare
coverage, these organizations were able to encourage various forms of parity in
several of states. By 1995,
Prior to these mandates, some employers began to look into parity as a cost effective way to decrease productivity loss and successfully treat both mental health and substance abuse disorders of both employees and families of employees. A Digital Equipment Company official says regarding its 54-page “Standards for HMO Performance”, “We believe this provides real mental health parity.”[x] However, most states and employers in the mid-1990’s still did not have any form of mental health parity, and those state parity laws that did exist did not apply to employers who were self-insured. Without federal action, many people were left with diminishing benefits.
In 1994 the Clinton Administration attempted to shift the burden from the consumer back to either the public or private insurer sectors by introducing a mental health parity law in its proposal for healthcare reform (Surgeon General 1999). The proposal never made it to fruition but was instrumental in a trend toward mental health parity and the redistribution of mental healthcare provided by HMO’s. The intended goal of introducing a mental health parity law was to provide equal funding for both general and mental health services within the managed care setting. The goal would be to eliminate lifetime limits on mental health benefits or match lifetime limits of mental health benefits with general health lifetime limits.
In April 1996, Senators Pete Domenici (R-MN) and Paul Wellstone (D-MN) first introduced the forerunner of the Mental Health Parity Act (MHPA) as an amendment to the Kassebaum-Kennedy bill for healthcare portability. Both Senator Domenici and Senator Wellston, advocates for mental health treatment (due to personal experiences), collaborated to create a bill to requiring equal treatment for mental healthcare and general healthcare claims. .[xi] Senator Domenici is the father of an adult daughter who had chronic schizophrenia that was being treated successfully at the time of the bill, and Senator Wellstone also was acquainted with mental health disorders through his family; his brother was dually diagnosed with bipolar disorder and an addiction disorder.
In conjunction with Senators Domenici and Wellston, several large advocacy groups for those in need of mental healthcare; the National Alliance for the Mentally Ill (NAMI; for whom Senator Dominica’s wife also happened to be a board member) and the Coalition for Fairness in Mental Illness Coverage helped to push forward mental health parity.[xii]
Although mental health parity was initially passed in the Senate as an amendment to the Kassebaum-Kennedy bill, Senators Kassebaum and Kennedy eventually removed all the amendments from their bill regarding mental health parity, in an attempt to pass the bill more easily. This resulted in Senators Domenici and Wellstone to begin again.
Domenici and Wellstone soon attached the MHPA to the VA/HUD Appropriations bill, HR 3666. Those in support of the MHPA threatened to filibuster if the amendment was removed, but still faced opposition from Republicans. The vote on this bill, with or without amendments was going to be right before an election, making congressmen very careful of how they voted. Therefore, those in favor of the parity act agreed to some compromises in order gain the support of their opposition. The final bill included a sunset provision (the act would automatically expire September 30, 2001 if not renewed), a one year wait before going into effect, exemptions for certain kinds of businesses, and other limitations that appeased opponents.[xiii] The act was passed and signed by President Clinton in September of 1996 and went into effect January 1, 1998.
What does the MHPA do? The MHPA is a very simple parity law: It prohibits employers from having different annual or lifetime benefit limits for mental illness versus those for medical and surgical. However, there are some limitations to which plans this applies.
The mental health parity act, which applies to “most group health plans with more than 50 workers”, prevents insurers from setting lifetime dollar limits on mental health benefits (CMS, 2002). To accompany the Mental Health Parity Act, The Health Insurance Portability and Accountability Act was enacted to ensure that insurers could not impose lifetime dollar limitations on inpatient and outpatient mental health treatment. Insurance companies reacted to this mandate by imposing inpatient and outpatient visit restrictions (NCSL, 2003). Thus, a consumer of mental health services may demand long-term treatment but will be restricted to 60 covered visits (both inpatient and outpatient) regardless of cost (NCSL, 2003). Importantly, a substantial gap still remains, the law does not pertain to individual health insurance in the private market (CMS, 2002).
Currently, in the state of
As stated previously, employers with 50 or fewer employees are exempt from adhering to mental health parity stands. There is also a clause states if a company can show that adhering to the act has raised their health care costs by more than 1% they can apply for an exemption (although there is no guarantee it will be accepted). The last provision was added partially to quell the fears of rising costs to businesses. Although many would have liked to be granted this exemption prospectively, it is only given once evidence is shown there has been a true increase in health care costs due to the mental health parity act. It was estimated that approximately 10% of plans that had to adhere to the MHPA might experience an increase in costs above 1% (approximately 11 million workers and dependents)[xiv] and according to a survey by William M. Mercer of over 300 major employers, fewer than 2% intended to try to claim the 1% rule exemption.[xv]
In addition to these exemptions the MHPA does not apply to substance abuse treatment.. Because substance abuse and other mental illness often occur simultaneously, the lack of inclusion of substance abuse treatment may make parity laws more expensive in the long run, rather than less.[xvi] The senior vice president for medical affairs of Harvard Pilgrim Health Care states, “Most of the folly of mental health parity laws is that they don’t apply to substance abuse. Many people with major mental illnesses have substance abuse problems as well. And proper treatment of substance abuse is something we can do relatively effectively in a relatively short period of time.”[xvii]
There is also no guarantee that enacting such a law will increase the amount of mental health services used. A study done by Zuvekas et.al., (2001), found that parity is most likely to increase the amount of mental health services used. This trend would easily follow a standard demand curve. The curve would indicate that as out-of-pocket costs for services decreased the demand for mental health services covered by HMO’s would increase. Unfortunately, the mental health consumer market is different than the overall healthcare market. The mental health market alone does not appear to be consumer driven. In contrast, insurers appear to have a significant amount of control over the amount of treatment and providers an individual can receive and visit. What is most interesting is that despite the demand for mental health services, insurers do not want to provide mental health coverage. Zuvekas et al., brings an important issue to the front. An increase in demand is separate from an increase in service usage. Despite high demand for less out-of-pocket spending, it would be difficult to predict an increased pattern of service utilization. This is not to say that there would not be an increase in service utilization, but, those lobbying for lower out-of-pocket expenses for mental health coverage may not utilize the services themselves.
Parity would also give insurers a large incentive to create new
restrictions to mental health care through managed care. If a company
felt that the MHPA was going to increase its health care costs, it could
respond in several ways. First, the MHPA did not prevent the overall decrease
in annual or lifetime ceilings for both mental and medical/surgical health
benefits, or the creation of one universal set of limits including mental as
well as medical and surgical benefits. According
to an analysis conducted by
Third, the insurer could place an unequal limit on the number of mental health care visits versus other kinds of visits. Lastly, insurers could raise insurance premiums.
Despite the above weaknesses, advocates have had many reasons to support the MHPA. First, the general healthcare and mental healthcare market are competitive. .[xviii] Generally, health insurance plans want to attract healthy patients in order to keep down costs; however, because people with mental illness often have a chronic need for care, they are naturally attracted to plans with better mental health coverage. Because mental health is so much more expensive to treat, mental health patients are the last kind of patient an insurance plan would want to attract. Therefore, the only way to get insurance plans to start offering better mental health care coverage would be to require all insurance companies to follow the same regulatory standards.
Secondly, the MHPA also had to do with the chronic nature of mental illness. Even though the MHPA would not keep insurance plans from creating new financial burdens for patients, it would help to increase annual and lifetime benefits. For people who are chronically ill, (especially those using inpatient care) this could prevent tremendous costs. In fact, Ronald Sturm found that children and adolescents have higher inpatient costs for mental illness treatment. Those families burdened by the cost of such treatments would receive greater benefits from an increase in annual and lifetime benefits than their non-ill counterparts.[xix] Opponents to the mental health parity act would have difficulty publicly denying treatment due to the vulnerable nature of this population.
Lastly, there is no doubt that part of the push towards parity was a desire for validation on behalf of those suffering from mental illness. As pointed out by Hennessy and Goldman (2001), it is already difficult for a person suffering from a mental disorder to seek help because the disorder impairs their view of the world. What is worse is the reinforcement of the idea that those with mental illness are not actually sick, and in need of care, as is demonstrated by discriminating between mental illness and “real” illness.[xx] The MHPA could be a first step to reducing the stigma of seeking help for mental illness.
Opposition to Parity
Like general healthcare coverage, insurers will set a lifetime limit on mental healthcare coverage. However, unlike general healthcare, which has a high lifetime limit in an attempt to help with any type of catastrophic health condition, mental health services have a very low lifetime limit. Because of these limits the burden of cost has been shifted from the insurer to the patient. Insurers cite two main reasons for adopting a low lifetime limit for mental healthcare: 1. Moral Hazard. This theory suggests consumers of healthcare will increase service utilization as the insurer absorbs more of the burden of cost. Thus, unless a consumer is forced to share costs (i.e. deductibles and co-payments) a patient will never entirely value healthcare at its full cost. A study done by RAND to examine moral hazard, found not only do individuals utilize health services more when the out-of-pocket expense is minimal but, the outpatient service most utilized was psychotherapy (Manning et al, 1989). 2. Adverse Selection. This theory suggests that consumers of healthcare will choose a plan that gives the most coverage for a disease or disorder the patient will need in the future. However, this unfairly distributes the burden of cost to those managed care units that are willing to, and can afford to bare said costs. This would in turn suggest that these HMO’s would be the most attractive to individuals already afflicted with a disease or disorder. To combat adverse selection and decrease the enrollment of the severely mentally ill in managed care settings, insurers decided to limit mental health benefits (Surgeon General, 1999).
Although limiting mental health coverage is successful at reducing cost for insurers, the limit placed on benefits does not help to encourage mentally ill consumers to seek the adequate care needed for their disorder (Bloom et al., 1998). Not only do the limitations restrict the number of allotted outpatient visits for mental health services, a restriction is also placed on the provider eligibility for coverage through a specific managed care system. Consequently, these restrictions place more barriers between the patient and treatment and may do nothing more than discourage the consumer from seeking adequate care.
Concerns over costs.
The change in mental health coverage under the Mental Health Parity Act does not come without cost. An analysis done using actuarial assumptions found that “full parity” coverage for mental health and substance addiction would result in 3.6 percent premium increase (SAMHSA, 2004). Despite the fact mental health and substance addiction expenses would increase by 75 percent, only a 3.6 percent premium increase would be passed to consumers (SAMHSA, 2004). This small increase is due to the small proportion of health care expenses for mental health and substance addiction allocated at time of enrollment. Approximately, 4 to 6 percent of a healthcare plan is spent on mental health and substance addictions at the time of enrollment. Premium increases are subject to variability with regard to the type of plan a consumer is enrolled. The more stringently run HMO’s have a lower premium, while PPO’s and FFS plans can have an increase anywhere from 5 to 5.1 percent (SAMHSA, 2004).
Although this increase is an attempt to share a small portion of the burden of cost with the consumer, there is a concern that there still would remain a substantial out-of-pocket cost. Thus, many individuals requiring mental health services may continue to have unmet needs.
In 1997, the “median” number of days allotted for outpatient care through a managed care system was 25, while the most number allotted was 30. The approximately $25,000 on average as the lifetime limit for mental health inpatient and outpatient services, often has not been enough to cover all necessary treatments or long-term care (Buck et al, 1999). Thus indicating the high cost of both short term and longterm mental healthcare coverage.
The cost estimates of the original Domenici-Wellstone proposal ranged from an increase of 2.5% to 11.4%[xxi] Many retorted that these estimates represented costs to the older indemnity plans that did not control costs as well as the more modern managed care plans. Parity advocates believed that with the newer, more cost effective health care management plans, increases in costs would be minimal if at all.[xxii] Furthermore, they stated, that even minimal costs would be offset by gains made from the reduced absenteeism and greater productivity that would result from increased access to mental health services for employees.[xxiii]
The predictions of three major studies and state experiences did not,, support the idea that costs would rise significantly. First, The Congressional Budget Office predicted a cost increase of .4% as a result of the final Domenici-Wellstone proposal and possibly as low as .16% if employers reduced certain other mental health benefits to compensate for the cost of adjusting cost ceilings of their mental health coverage.[xxiv]
Finally, one of the most famous studies around the time parity was being debated, used data from 24 managed behavioral health care plans with 140,000 enrollees and concluded that the federal law’s removal of dollar ceilings would increase costs for a plan with a $25,000 annual limit only by $1 per enrollee per year. This same study also found that for a plan with no deductible and small co-payments, allowing unlimited inpatient days and outpatient visits would only cost enrollees an additional $7 per year.[xxvi] Roland Sturm, the author of the study thought that costs for parity in the form of managed care, “[were] not going to go through the roof.”[xxvii]
The experiences of states that had already experimented with parity also
supplied helpful information.
These reassurances that costs would not go up significantly, may have seemed fairly convincing, but the research done was confounded by the introduction of managed care. As pointed out by a report by the National Advisory Mental Health Council, “Because in all cases to date parity was implemented in conjunction with managed care, it is difficult to assess the effects of parity alone.”[xxxii]
No more mandates!
Another objection to parity was the increasing intrusion of the government on the health insurance industry. R. Lucia Riddle, vice president for government relations of the Principal Financial Group warned that even if the cost of the MHPA is small, it is just one of many present and possibly future mandates. “…We get hit with a number of mandates, and those costs do add up.” She pointed out a study which showed about 30% of every premium dollar in state-regulated plans were due to mandates.[xxxiii] In 1998, it was estimated by one health insurance official that the total number of all state mandates was near 1,300.[xxxiv] Advocates for mental health parity questioned if the increasing number of mandates strengthened their case that regulation is necessary to ensure proper health coverage.[xxxv]
Push towards more managed care.
When parity was first introduced in many states, managed care was not as ubiquitous or as tight as it is now. The introduction of mandates like parity fueled the growing trend toward managed care. At least one study showed that in the states that adopted parity laws, a switch to managed care soon followed in almost every occasion in which parity was adopted.[xxxvi] The Mathematica study (commissioned by SAMHSA) which looked at the experiences of states who adopted various forms of parity before the MHPA, found that not only did the introduction of managed care at the same time as parity prevent an increase in costs, but it also greatly decreased the amount of mental health and substance abuse services used.[xxxvii] It could have been argued that if costs due to parity were kept down through restricting access to mental health services or otherwise discouraging them, then parity may not really be as helpful as lawmakers meant it to be.
Mental Health Parity and the Consumer
Within the last decade a movement toward increasing mental health benefits for health maintenance organizations (HMO’s) /managed care recipients has been a heated debate. Currently, HMO’s will only cover a set number of outpatient care services for mental health related problems. The decision to set mental health care benefit limitations was supported by insurers who believed an individual with a mental illness would require an extensive amount of treatment; resulting in increased costs and spending for long-term care and hospital visits (Surgeon General 1999). Because of the known need for long-term care treatment for inpatient and outpatient mental healthcare, insurers began to limit the number of visits allotted to a patient enrolled in a managed care system for mental health services. Consequently, consumers of mental health services were given another barrier to overcome toward service utilization. Consumers would now have to pay out-of-pocket for any services needed which extended the allotted visits for mental illness. In an attempt to decrease the amount of money spent on high-risk enrollees (severely mentally ill), insurers attempted to shift responsibility of long-term outpatient mental health care from the private sector to the public sector (Goldman et al., 1994).
The Mental Health Parity Act of 1996 and The Health Insurance Portability and Accountability Act mandate that dollars for mental healthcare be equivalent to that of general healthcare coverage. However, restrictions on number of visits are still a growing concern. If there is no lifetime or annual limitation on dollars spent on coverage but there is a limitation on the amount of services allowed for access than there is by default a cap on spending. A 2001 study conducted by Haas et.al, examined three groups; usual care, health education, and enriched mental health benefit. The usual care group was allotted 20 visits for outpatient psychotherapy per one year scheduled 4-6 weeks apart with a group therapy option as well. The health education group was given educational classes focusing on “stress management” techniques that met once a week for 6 weeks. This group was not provided contact with a psychiatrist or psychologist during the study. Finally, the enhanced mental health benefit group was provided an extensive amount of mental health services. A psychologist was retained for consultations and supervision of medications and other mental health treatments. The study concluded that those individuals in the enhanced mental health group were more likely to utilize services. Furthermore indicating how the removal of visit limitations would increase patient utilization.
Even with insurance it is not unlikely for an individual to be unable to
pay for mental health care treatment. It
is also not unlikely for many severely mentally ill patients to drop well below
the poverty line and become eligible for publicly supported healthcare (Ohio
H.B. 33). Within the state of
Not only do visit restrictions decrease patient utilization of services, visit limitations increase the potential for harm to the patient. Despite a diagnosis of mental illness an individual is still only allotted a specific number of outpatient or inpatient visitation days. The patient and his provider can petition to his HMO to request an extension of visits but is most often denied. A considerable ethical dilemma is encountered. The provider must stop treatment for the patient because he cannot continue to pay out-of-pocket for care, yet the decision to stop treatment was determined by a managed care system, not a physician. An article written by Perina (2002), most accurately portrays what is occurring in the managed care system. “…After 30 days as an inpatient at Porter Adventist Hospital in Denver, Hochalter's behavioral managed-care provider, PacifiCare, ruled hospitalization no longer medically necessary, forcing her into a partial-treatment program. One week after her inpatient discharge, Hochalter entered a gun shop, asked for a pistol, loaded the weapon and killed herself on the spot.” In an attempt to lower costs by denying extended care, the managed care system, in this case PacifiCare may have been responsible for Hochalter’s death.
The Aftermath of Federal Parity
The management of care
As was seen in other states, and as predicted by some involved in the federal debate, managed care found ways to circumvent increased costs due to parity. For example, major report by Mercer/Foster Higgins found Since the introduction of the MHPA, one third of firms with more than 500 employees introduced changes in day or visit limits.[xxxviii] In addition, according to the U.S. General Accounting Office report issued in May of 2000, 14% of employers had yet to comply with the MHPA, and of those who did comply, 87% continued to limit their mental health benefits in some other way.[xxxix]
Do these changes made by managed care negatively affect access to mental health care? Yes. According to Sturm, et al., who conducted a national household survey found that although those in managed care are less likely to receive no mental health care at all, they experience more delays in treatment or less treatment than desired, than those in unmanaged care settings.[xl] A NIMH (National Institute of Mental Health) study supports this; they found that while the number of people seeking outpatient care increased, the number of visits per person did not increase, and the use of inpatient mental health services declined.[xli]
Because the managed care system is now being forced to make changes for the treatment of acute mental health problems, there is a growing concern that the majority of severally mentally ill consumers will utilize healthcare in the public sector (Goldman et. al., 1999). This presents another problem. As severally mentally ill consumers enter into the public healthcare sector taxpayers become responsible for their care. This shifts the burden of cost to yet another source. Public sector insurance (in this case Medicaid) is supported through taxpayers and federal entitlements (although a switch is being made to block grants). The money allotted to public healthcare (Medicaid) requires a specific set of services be covered through reimbursement. States are encouraged to match or exceed the funds provided with federal dollars but are not required to do so. Thus, some states may have extensive coverage for the severely mentally ill while others may have less than adequate mental health coverage. Clearly, there is no guarantee that shifting the higher risk enrollee to public sector insurance will ensure the individual receives the necessary and sufficient healthcare.
NIMH assessed the findings of many large studies, including that of a large state that introduced parity. They determined that parity contributes little if at all to total healthcare costs. NIMH is thus far unable to determine, however, to what degree costs were shifted between different healthcare sectors due to parity.[xlii] The Surgeon General also found no reason to fear parity, characterizing it as, “an affordable and effective objective.”[xliii]
Getting the ball rolling
The enactment of Federal Parity may have been the impetus for more states to enact their own parity laws, some of which are even more powerful than the MHPA. The NIMH (2000) report states:
“Following the 1996 MHPA, 14 States also enacted
statutes to match the federal parity statute including: in 1997, Alaska,
Arizona, Delaware, Indiana, Kansas, Louisiana, Montana, Nevada, North Carolina,
South Carolina, Tennessee, and West Virginia; and in 1998, Florida and New
Mexico. Of the 14, seven States matched the federal statute in 1997 or 1998,
and then opted to have a "stronger" State parity statute:
Different states enacting different parity laws give rise to the opportunity for researchers to look at the effects of a variety of legislation on health care. This could provide the federal government with valuable ideas for parity policy supported by scientific data.
The MHPA also may have influenced increased parity for about 9 million employees covered by the Federal Employees Health Benefits Program. In 1999, President Clinton had the Office of Personnel Management benefit federal employees with not only full mental health parity, but also full parity for substance abuse services.[xlv]
The Mental Health Equitable Treatment Act
Recognizing the setting of the sun on the MHPA, in March of 2001, Senators Domenici and Wellstone once again introduced an amendment enforcing parity for mental health. The Mental Health Equitable Treatment Act of 2001 (S. 543), is much closer to full parity than is the MHPA. This piece of legislation mandates that health plans that provide mental health coverage cannot provide different regulations between mental health coverage and medical or surgical coverage for the following: frequency of treatment, number of visits or days in the hospital, general duration of treatment, deductibles, coinsurance, co-payments, or other costs to the consumer.
S. 543 passed the Senate committee of Health, Education, Labor, and Pensions, and was attached by the Senate to a fiscal year 2002 Labor-HHS appropriations bill in October of 2001. However, S. 543 did not replace the existing mental health parity act as hoped and was removed from the appropriations bill, however, President George W. Bush signed a one-year extension to the MHPA, ensuring one more year of mandated mental health coverage. The MHPA is now scheduled to expire December 31, 2002.
The potential for expanded federal parity is far from over. As of this writing, S. 543 is still alive in the Senate, awaiting passage. Furthermore, on March 13, 2002, the U.S. House of Representatives Committee on Education and the Workforce Subcommittee on Employer-Employee Relations held a hearing entitled, "Assessing Mental Health Parity: Implications for Patients and Employers", the first House hearing ever on parity. Shortly after this hearing, on March 20, 2002, Reps. Marge Roukema (RNJ) and Patrick Kennedy (D-RI) introduced a version of S. 543 to the House: The Mental Health Equitable Treatment Act of 2002.[xlvi] This bill is very similar to its version in the Senate, but it goes even further in that it includes a provision for studying the cost of including substance abuse in federal parity regulations.
Despite the current push for stronger federal parity, the question still remains how effective it really is. Even when the original MHPA was first introduced, many believed that parity would not actually benefit consumers because in order to comply with the new requirements, managed health care plans would just cut back in other areas.[xlvii] The Mercer/Foster Higgins and the General Accounting Office reports mentioned above both bear this out. Furthermore, substance abuse is still not included as a mental illness under the MHPA. The House version of the Mental Health Equitable Treatment Act of 2002 may move in this direction, but only by very little.
Lastly, there are still more than forty million Americans have no health insurance at all.[xlviii] Some feel that we ought to be focusing first on finding a way to grant access to basic health care for the many before we start spending money as a nation to give better health care to the few.[xlix]
In contrast to these arguments, modern advances in the understanding and treatment of mental illness beg the question, why should mental illness be treated differently? The 1999 Surgeon General Report on Mental Illness clearly showed with a preponderance of evidence that mental illness is real illness that can treated. Millions of people who are currently suffering could be leading much more satisfying and productive lives, to the benefit of us all.[l] If parity laws do not actually help the mentally ill in the short run with improved access to services, perhaps they will help in the long run as a symbolic gesture that mental illness is just that, an illness, and it can be treated.
While there is no guarantee that if Mental Health Parity was accepted by all states and visit restrictions were eliminated, insurers in the managed care system would not attempt to find loopholes to decrease costs. It is evident that HMO’s will make it as difficult as possible for mental health consumers to obtain the necessary treatment and services to maintain a productive lifestyle. With the rising of healthcare costs, even fewer individuals will be able to pay out-of-pocket costs for much needed extended mental health treatments. Thus, it is imperative something is done to ensure equal coverage in both lifetime dollar limitations and visit limitations for those with mental illness and those with general healthcare coverage needs.
B, Martin, K, et al. Americans’ views of mental health and illness at century’s
end: continuity and change.
[ii] National Advisory Mental Health Council. 1997. Parity in
coverage of mental health services in an era of managed care. An interim report to Congress.
[iv] Mental Health: a report of the Surgeon General.
[v] Otten, A. Mental health parity: what can it accomplish in a market dominated by managed care?. Milbank Memorial Fund 1998. http://www.milbank.org/mrparity.html (February 2, 2002).
[vi] Fein R. Economics of
mental illness: a report to the staff director, Jack R. Ewalt,
[vii] Hennessy, K. & Goldman, H. Full parity: steps toward equity for mental and addictive disorders. Health Affairs 2001; 20:58-67.
[viii] Otten, A. Mental health parity: what can it accomplish in a market dominated by managed care?. Milbank Memorial Fund 1998. http://www.milbank.org/mrparity.html (February 2, 2002).
[xi] Levinson, CM. and Druss, BG. The evolution of mental health parity in American politics. Administration and Policy in Mental Health 2000; 28:139-146.
[xii] Senate vote confirms public’s demand for parity in mental health benefits. (1996, April 24). [Newswire}. PR Newswire. As cited in Levinson & Druss. (2000).
[xiii] Levinson, CM. and Druss, BG. The evolution of mental health parity in American politics. Administration and Policy in Mental Health 2000; 28:139-146.
[xiv] Otten, A. Mental health parity: what can it accomplish in a market dominated by managed care?. Milbank Memorial Fund 1998. http://www.milbank.org/mrparity.html (February 2, 2002).
[xv] Mercer/Foster Higgins.
1997. National Survey of Employer-Sponsored Health Plans.
[xvi] Otten, A. Mental health parity: what can it accomplish in a market dominated by managed care?. Milbank Memorial Fund 1998. http://www.milbank.org/mrparity.html (February 2, 2002).
[xviii] Frank, G, Goldman, H,
& McGuire, T.
[xix] Sturm, R. 1997. How Expensive Is Unlimited Mental Health Care Coverage under Managed Care? Journal of the American Medical Association 278:1533-7.
[xx] Hennessy, K & Goldman, H. Full parity: steps toward equity for mental and addictive disorders. Health Affairs 2001; 20:58-67.
[xxi] Watson Wyatt Data
Services. 1995. 1995-96 Survey Report on Employee Benefits.
[xxii] Otten, A. Mental health parity: what can it accomplish in a market dominated by managed care?. Milbank Memorial Fund 1998. http://www.milbank.org/mrparity.html (February 2, 2002).
[xxiv] Congressional Budget
Office. “CBO’s Estimates of the
Impact on Employers of the Mental Health Parity Amendment in H.R. 3101.”
[xxv] Sing, M, Hill, S, Smolkin,S, and Heiser, N.
1998. The costs and effects
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[xxvi] Sturm, R. 1997. How Expensive Is Unlimited Mental Health Care Coverage under Managed Care? Journal of the American Medical Association 278:1533-7. As cited in Otten (1998).
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