Alexandria, VA (May 18, 2000) A new report to Congress from the General Accounting Office (GAO) proves that a 1996 parity law is affordable, but also how new parity legislation is essential to meet the spirit of the law.

Only three percent of businesses GAO polled reported that their costs had increased in response to the 1996 law, which requires insurers to equalize annual limits on costs for mental and physical health treatments. But GAO found many firms have replaced annual limits on the cost of treatment with new limits on the amount of inpatient and outpatient mental health treatments allowed. The answer, according to Michael Faenza, president and CEO of the National Mental Health Association, is new mental health parity legislation that requires equalized limits on mental and physical healthcare treatments.

Comprehensive parity has proven cost-effective in states such as Vermont, Maryland and Minnesota, where health insurance costs increased less than one percent after implementation. An April 1997 report to Congress from the National Institute of Mental Health ¾ Parity in Coverage of Mental Health Services in an Era of Managed Care ¾ found health costs increased one percent or less for businesses and states that adopted parity.

Legislation from Senators Paul Wellstone (D-Minn.) and Pete Domenici (R-N.M.), S. 796, is a step toward parity between mental and physical health treatments. NMHA and its 340 affiliates will actively campaign for its passage.

Mental Health: A Report of the Surgeon General, released in late 1999, unequivocally states that mental health is central to our nation's well being, and belongs on the frontlines of healthcare and public policy, in part because two-thirds of all Americans with mental health disorders do not receive treatment. "The report makes it absolutely clear that by promoting recognition and treatment of mental disorders and reducing stigma and discrimination, mental health parity would help solve a host of problems confronting people with mental illness," Faenza said. "A federal parity law would propel us forward more quickly and effectively than any other action."

A 1996 public opinion poll commissioned by NMHA found that 93 percent of all Americans support health insurance parity for individuals with mental illnesses. Treatment efficacy for mental disorders is easily comparable to the treatment efficacy of other chronic illnesses. For example, treatments for depression have a success rate of nearly 80 percent, whereas the treatment success rate for heart disease ranges from only 41 to 52 percent. "Denying coverage for any illness is wrong," says Faenza. "Mental illnesses are real, common and treatable. We know that parity is affordable and effective. Now, we need to act on that knowledge by establishing comprehensive mental health parity across the country. It's simply the right thing to do."

"Not treating mental illnesses will not make them go away," Faenza said. "As long as we have insurance discrimination, people with unmet mental healthcare needs will be dumped into the public sector and taxpayers will pick up the cost. We will continue to have high rates of homelessness. People - and their productivity - will suffer needlessly."

One in every five children, adolescents and adults has a mental health problem that can be identified and treated; half of them have serious disorders that significantly impair functioning.

"We are making progress in our struggle for social justice - long considered futile - one step at a time," Faenza said. "The 1996 law is a good start, but it is not enough," Faenza said.

Background on the 1996 Law

The 1996 Mental Health Parity Act requires all group health plans and all employers with 50 or more workers - including state governments and churches - to equalize the annual and lifetime spending limits imposed on mental and physical healthcare. The law states that employers can be exempt from the law if its implementation would increase their health insurance costs by more than 1 percent. The law does not require parity in access to mental and physical health treatments or that employers provide a mental health benefit at all. Insurers can still impose unfair arbitrary limits on outpatient visits and inpatient stays, and unequal copayments for care. Thirty-one states already require some type of mental health parity.

What the 1996 parity law does:

• It requires that the aggregate annual and lifetime benefit limits in health insurance plans are the same for physical as well as mental healthcare needs.

What the 1996 parity law does not do:

• It does not require any mental health component be offered as part of a health insurance package.
• It does not require small businesses (those with less than 51 employees) to comply.
• It does not require parity in the number of inpatient days or outpatient visits allowed.
• It does not require parity in the determination of copayments and other payment structures.
• It does not pertain to treatments for substance abuse disorders.

Why it is important:

• Many health insurance plans capped or limited coverage for illnesses such as cancer at $1 million per lifetime. But most plans capped or limited mental health coverage at $25,000 to $50,000 per lifetime.
• The law takes a major step toward ending blatant discrimination of people with mental healthcare needs and their families.

Established in 1909, the National Mental Health Association is the nation's only advocacy organization dedicated to all aspects of mental health and mental illness. With 340 affiliates nationwide, NMHA works to improve policies, understanding, and services for individuals with mental illness.

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