Mental Health Parity:  Legislating Equality
in Health Insurance Coverage

Jessica Luna, J.D. candidate

According to the National Institute for Mental Health, roughly 44.3 million people (22.1% of Americans over 18) suffer from some kind of mental illness each year, and 2.8% of those (about 5.5 million people) suffer from a severe mental illness.  Mental illness places a burden not only on the afflicted individual, but also upon society.  Mental illnesses make up 4 of the top 10 causes of disability and over 15% of the burden of disease in established market economies.  See http://www.nimh.nih.gov/publicat/stats.cmf. The burdens mental illness places upon society are exacerbated by the fact that many individuals have difficulties in obtaining sufficient treatment.  The difficulty is largely due to disparities between health insurance coverage for the treatment of mental afflictions and that for strictly physical afflictions.

Congress enacted the Mental Health Parity Act of 1996 (MHPA) to address the problem.  The Act applies to health insurance plans that offer mental health coverage, and states that a plan may not include annual or lifetime limits on mental health benefits if it does not include the same limits for medical or surgical benefits.  29 U.S.C. §1185a (1996).  (Annual and lifetime limits are dollar limitations on the amount that beneficiaries may pay for health care benefits.)

The Mental Health Parity Act is a good start toward the development of equal insurance benefits for mental and physical health care, but it contains a number of exceptions that limit its scope.  Limitations include:

Progress Report

In May of 2000, the United States General Accounting Office (GAO) issued a report to the chairman of the Senate committee on Health, Education, Labor, and Pensions that included results of a study conducted on the effects of the MHPA.  See http://americ20.temp.veriohosting.com/web.  The study found that in employer-sponsored health plans:

What happens next?

Due to the Mental Health Parity Actís sunset provision, the Act will only be effective until September 30, 2001 unless the sunset provision is extended or the Act is revised and re-promulgated.  The Senate is currently considering a bill that would revise the MHPA and remove the sunset provision.
 
The bill, entitled the Mental Health Equitable Treatment Act of 2001, was introduced in the Senate on March 15, 2001 and was unanimously passed in the Senate Committee on Health, Education, Labor, and Pensions on July 11.  107 Markup S.543 (2001).  The bill proposes to expand the requirements of the MHPA by prohibiting health insurance plans from imposing any treatment limitations or financial requirements on mental health benefits unless comparable limitations or requirements are imposed upon medical or surgical benefits.  The bill also removes of the exception for health insurance plans that incur a cost increase greater than 1%.  The House counterpart, the Mental Health and Substance Abuse Act of 2001, proposes to amend the Health Information Portability and Accountability Act of 1996 (HIPAA) to provide full insurance coverage parity for both mental health and substance abuse.  H.R.162 (2001).

The bill, if passed, would provide much more comprehensive mental health parity than is currently required.  Unfortunately, similar bills have not been successful in Congress in the last few years.  In fact, the original version of the MHPA looked very similar to the Mental Health Equitable Treatment Act, but was amended to its current, limited version because of fears about cost and concerns that the coverage was too broad.  Data on the cost of MHPA implementation, as well as the implementation of more comprehensive State laws, data that was unavailable at the time the MHPA was passed, indicate that if the Mental Health Equitable Treatment Act is passed the cost increase should be relatively small.  See http://americ20.temp.veriohosting.com/web.   Additionally, the Congressional Budget Office estimates that insurance premiums will only be increased by one percent.
 
Given these findings, as well as the impending sunset provision, the time may be right for Congress to adopt this new mental health parity law.  The prospects for the adoption of S.543 appear favorable, especially in light of the recent unanimous passage of the bill by the Senate Committee (with 11 Democrats and 10 Republicans) and the billís co-sponsorship by 54 senators (40 Democrats and 13 Republicans).

008/29/10