Most employers covered by the 1996 federal law mandating insurance parity in annual and lifetime dollar limits for mental health care have modified their policies to comply with the law, but that leaves thousands of companies whose workers still lack even this limited parity protection.

A study released May 18 by the federal government’s General Accounting Office (GAO) reports that as many as 13,000 companies whose health insurance policies are required to include parity still do not contain these provisions.

The 1996 law, known as the Mental Health Parity Act, requires any company that offers coverage for mental health treatment to have the same dollar limits for both annual and lifetime expenses as its policies permit for other types of medical care. The law applies to employers with more than 50 workers.

At the request of members of the U.S. Senate’s Committee on Health, Education, Labor, and Pensions, the GAO surveyed a random sample of employers in the District of Columbia and the 26 states in which provisions of state mental health parity laws did not exceed those of the federal statute as of July 1999. Of the 863 employers that responded to the survey—a response rate of 52 percent—86 percent said that their insurance policies conform to the parity law mandate. Before the law went into effect, 55 percent of employers had parity in lifetime and annual dollar limits.

While that 86 percent of companies encompasses between 68,000 and 74,000 employers, the GAO estimated that 9,000 to 13,000 employers still do not provide their workers with this limited degree of parity.

Another finding of the GAO study that will be particularly troubling for parity proponents is what many companies did at the same time they equalized the annual and lifetime dollar ceilings. To compensate for what they expected would be insurance cost increases attributable to the parity mandate, nearly two-thirds of the companies said they reduced the number of covered hospital days and/or outpatient office visits for people seeking mental health care. Moreover, some employers increased copayments for this type of care or boosted the cap on insured workers’ out-of-pocket costs.

Despite their concerns about how the limited parity mandate would affect the cost of providing insurance benefits, only about 3 percent of the responding employers said that their claims costs increased as a result of the law. Sixty percent had not determined whether the insurance changes had an impact on costs, while 37 percent indicated that they had not experienced a jump in claims costs. The GAO noted that some of the rise in claims costs may have been mitigated by the reductions the companies imposed on covered office visits and hospital days.

Since the parity mandate applies only to employers who offer any level of mental health care insurance coverage, some parity advocates were concerned that the law would lead some employers to avoid the mandate by dropping mental health care benefits entirely. The GAO found, however, that under 1 percent of companies responding to the survey took this route.

APA Director of Government Relations Jay Cutler called the GAO findings "mixed news." While its study found that the majority of employers have complied with the parity mandate, "too many employers are skirting around the spirit of the law by imposing new and lower limits" on the amount of psychiatric care their workers can receive. "This must stop," Cutler emphasized.

Testifying before the Senate committee during a hearing on mental health parity last month, Kathryn Allen, associate director for health financing and public health issues in the GAO’s Health, Education, and Human Services Division, explained that "the net effect [of the parity law] is that consumers in states without more comprehensive laws have often seen only minor changes in their mental health benefits, resulting in little or no increase in their access to mental health services."

She pointed out as well that "the costs associated with the federal law have been negligible for most health plans."

Because the federal law mandates such limited parity and only a minority of Americans live in states with more comprehensive mental health parity laws, "many Americans are likely to remain in employer-sponsored health plans that continue to provide less coverage for mental illness than for other types of illnesses," Allen told the committee. The 1996 parity law sunsets in 2001.

Senators Paul Wellstone (D-Minn.) and Pete Domenici (R-N.M.) introduced a bill in 1999 designed to mandate full parity between mental health and physical health care urge.html.