Case Overview, Parity in Health Insurance Coverage for Mental Illness

This document provides background information and summarizes the debate over parity for the treatment of mental illness. The links to the left will lead you to public documents that we have found.

          Millions of Americans suffer from various forms of mental illness. Indeed, there are roughly 400 different mental disorders listed in the Diagnosis and Statistical Manual, a basic tool used by medical providers to identify specific maladies after examining a patient. Private medical insurance covers treatment for mental illnesses to varying degrees but almost always places significant limits on how much care is reimbursable. Thus those with mental illness must usually be prepared to pay for most or all of their treatment since their insurance plans limit what they'll pay to the costs of a certain number of visits with a health professional.

          A similar problem exists with coverage of mental illnesses by Medicare, the government's medical insurance program for the elderly. Those on Medicare can receive treatment for mental illness but must pay 50 percent of all costs. This figure does not include drugs, which are not covered at all and can be quite expensive. Impoverished Medicare clients may qualify for Medicaid, the government insurance program for the poor and that program has more liberal mental health benefits. For those on Medicare who are above the Medicaid income threshold or are even middle income, mental health treatment may be beyond their means.

          Legislation was introduced in the 106th Congress, as it had been before, to try to rectify some of the inequities in the way mental illness is treated under Medicare. What the legislation was not designed to do was to mandate coverage under Medicare or other insurance or even to prohibit limitations on coverage. Rather, the purpose was to prevent insurance plans from placing restrictions on mental health coverage that don't apply to physical health problems. In other words, Medicare wouldn't be able to put a high deductible (or co-pay) on mental illness treatments if the same deductible didn't apply to treatments for high blood pressure, a broken leg, or other physical ailments. As one legislative aide put it, "that's why we call [the bill's purpose] 'parity' because we are finding that the mental health benefits are subject to a lot more hoops that the patients have to jump through to in order to get treatment." She added, "They don't have to jump through those same hoops if they are to get some sort of physical health benefits."

          Spearheading the fight for parity are organizations representing health providers, such as the American Psychiatric Association, the American Psychological Association, and the National Association for Private Hospitals. Some consumer groups, like the National Association for the Mentally Ill are active too as are various coalitions of groups.

          Those supporting this legislation have found it to be an uphill battle. The costs of making this change are quite large, especially since real parity could not be achieved without some type of drug benefit. Those supporting the legislation have emphasized the discrimination faced by the mentally ill. While they've found sympathy for that point of view, proponents still face a Congress where many are reluctant to increase health care benefits because it has been so difficult to control health care costs under existing plans. The bill failed in the 106th Congress but as a lobbyist for an association of health professionals put it, "This is a lifetime fight."