Without Parity, Costs Can Increase.

• The combined indirect and related costs of mental illness, including costs of lost productivity, lost earnings due to illness, and social costs are estimated to total $48 billion (NAMHC, 1993).
• Depression ranks among the top three workplace problems.  Clinical depression alone costs the U.S. $43.7 billion annually, including workplace costs for absenteeism and lost productivity ($23.8 billion), direct cots for treatment and rehabilitation ($12.4 billion), and lost earning due to depression-induced suicides ($7.5 billion) (EAP Association Survey, 1996; MIT, 1993).
• Health plans with the highest financial barriers to mental health services have higher rates of psychiatric Long Term Disability (LTD) claims, and companies with easier access to mental health services see a reduced incidence of LTD claims (Salkever et al, The Millbank Quarterly, April 2000).
• Cutting dollars for mental health care can increase overall medical costs.  A 30 percent cost reduction in mental health services at a large Connecticut corporation triggered a 37 percent increase in medical care use and sick leave by employees using mental health services, thus costing the corporation more money rather than less (Yale Bulletin & Calendar, September 20-27, 1999).
• Healthcare costs of untreated persons who suffer from alcoholic and drug addiction are 100 percent higher than those who receive treatment.  Of all hospital admissions, at least 25 percent of those admitted suffer from alcoholism-related complications, and 65 percent of emergency room visits are alcohol or other drug related (Join Together, 1998; Hazelden Foundation, Testimony before the House Committee on Government Reform, 1999). 

Parity is Affordable.

• Introducing mental health parity in conjunction with managed care results in a 30 to 50 percent decrease in total mental health costs.  In systems that are already using managed care, implementing parity results in a less than one percent increase in health care costs (NIMH Interim Report to Congress, 1998).
• In 1998, SAMHSA reported that full mental health and substance abuse parity would raise family premiums by 3.6 percent.  In 2000, the Hay Group estimated that parity would increase premiums by only 1.4 to 1.6 percent, and warned that this estimate may still be too high (SAMHSA, 1998; NAMHC’s Final Report to Congress, 2000).
• “Employers have not attempted to avoid parity laws by becoming self-insured, and they do not tend to pass on the costs of parity to employees.  The low cost of adopting parity allows employers to keep employee health care contributions at the same level they were before parity” (SAMHSA Report on Insurance Benefits, 1998). 
• SAMHSA estimates that Severe Mental Illnesses (biologically based illnesses) account for 90 percent of any cost increases from parity.  They further estimate that adding children to federal legislation would result in a cost increase of approximately 0.8 percent in managed care settings (The Costs and Effects of Parity for Mental Health and Substance Abuse Insurance Benefits, SAMHSA). 
• After the implementation of a 1991 parity law, there was a 47.9 percent decrease in the cost of mental health and substance abuse care for Texas state employees covered under a Blue Cross/Blue Shield insurance plan  (SAMHSA Report on Insurance Benefits, 1998).
• In Minnesota, Blue Cross/Blue Shield reduced its insurance premiums by five to six percent after one year’s experience under the state’s comprehensive parity law. (The Louis de la Parte Florida Mental Health Institute, 1998).
• In North Carolina, mental health expenses have decreased every year since comprehensive parity for state and local employees was passed in 1992.  Mental health costs, as a percentage of total health benefits, have decreased from 6.4 percent in 1992 to 3.1 percent in 1998.  Since 1992, hospital days paid by the plan have been reduced by 70 percent (Just the Facts, 2000).

Parity Improves Access to Services and Saves Money.

• While the estimated annual cost to the nation of providing mental health coverage commensurate to physical health coverage for all children and adults is $6.5 billion, it is also estimated that this mental health coverage would result in savings for general medical services and indirect costs in the amount of $8.7 billion - a net annual savings of $2.2 billion (Report of the National Advisory Mental Health Council, October 1993).
• In a two-year study, Cuffel et al found that medical care costs decreased for those using behavioral healthcare services, when such costs were generally increasing (1999). 
• Employment Assistance Programs (EAPs) have proven to be cost-effective.  Chevron, Corp. realized a savings of seven dollars for every dollar it spent on their EAP; Campbell Soup Company had a 28 percent reduction in mental healthcare costs; and Virginia Power realized a 23 percent drop in medical claims over a four-year period for individuals who accessed the EAP compared with those who accessed behavioral health benefits on their own (EAPs: Saving Money, Saving Employees, Magellan Behavioral Health).
• At McDonnell Douglas, absenteeism dropped 44 percent for employees treated for substance abuse issues, and they set the three-year value of employee assistance services at $4.4 million in medical claims.  When the Kennecott Copper Corporation provided mental health counseling for employees, its hospital, medical, and surgical costs decreased 48.9 percent (GWCMHPC, Inc., 2000).
• For each dollar invested in treatment, studies have found a four to seven dollar cost-savings on crime and criminal justice costs.  The cost of incarcerating someone for five years is $125,000 – a cost that is much higher than treatment (Office of National Drug Control Policy, 1999).