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Home > Research Articles > Mental health parity extended another year


Sunday, November 24, 2002

By Joel B. Finkelstein, AMNews staff

Washington -- Lawmakers have granted a one-year extension to a law that provides some equality in insurance coverage for mental health services. But physician groups said that move falls short.

The 1996 Mental Health Parity Act expired in October 2001, but lawmakers have extended it each year since then through a provision of the tax code that subjects managed care firms that don't follow the law to penalties.

The act requires health plans to set lifetime and annual reimbursement limits on mental health services that are at least equal to those for medical and surgical care.

The American Psychiatric Assn. is pleased that Congress again extended the law but is disappointed lawmakers didn't pass legislation that would have expanded patients' rights to mental health parity.

"Yes, the APA is grateful that the House and Senate have ensured that the current limited protections ... will not lapse but believes that is not an adequate solution to the long-term problem of insurance discrimination against persons seeking treatment for mental illness and substance abuse disorders," said APA President Paul S. Appelbaum, MD.

Legislation introduced last year in the House and Senate would have closed the law's loopholes by barring plans from setting different co-pays or limits on the number of treatment sessions or hospital stays for mental health treatment than they do for medical or surgical care.

Untreated depression costs American business nearly $30 billion a year.

The measure, which was co-sponsored by the late Sen. Paul Wellstone (D, Minn.), could come up for consideration again next year.

"I am clearly disappointed that even with the president's backing we have been unable to get a more comprehensive mental health parity package passed this year," said Sen. Pete Domenici (R, N.M.), the bill's other co-sponsor.

The legislation had broad bipartisan support this year. The Senate version had 66 co-sponsors, and the House companion bill had 242 co-sponsors. But passage was stymied by opposition from health plan and employer groups.

If offered the next year, the bill likely would again generate heated debate. Proponents of parity say it is essential for adequate care.

"Mentally ill patients seeking treatment are discriminated against by requiring higher co-payments, allowing fewer doctor visits or days in the hospital, or higher deductibles than imposed on other medical illnesses," the Coalition for Fairness in Mental Illness Coverage said. "This discrimination results from outdated misconceptions and the stigma surrounding mental illnesses."

Health plans respond But the American Assn. of Health Plans argues that more services lead to increased costs, and higher costs result in fewer Americans with health insurance.

"In an era of rising health care costs, adding more mandates is not going to serve the best interest of patients," said AAHP spokesman Mohit Ghose. The expanded parity legislation is too ambiguous and broad, and could cost much more than proponents say, he added.

Every year, 30,000 Americans commit suicide and 650,000 attempt it.

AAHP members are content to follow the letter of the current parity law, Ghose said. Plans are already working to expand mental health coverage, while staying within employers' budgets, making new requirements unnecessary and potentially counterproductive, he said.

A report by the Congressional Budget Office estimated that comprehensive parity legislation would increase health care premiums by 0.9%. Other public and private analysts put the increase closer to 3% to 5%, while some plans say it could reach 10%.

But Ralph Ibson, vice president for government affairs at the National Mental Health Assn., said, "Parity opponents ignore the huge cost of untreated mental illness. Untreated clinical depression alone costs American business nearly $30 billion annually."

A recent Institute of Medicine report found that 30,000 Americans commit suicide and 650,000 attempt suicide annually.

A recent survey by the National Mental Health Assn. found that 79% of Americans support mental health benefit parity.