Mental Health Coverage Mandates Would Make Coverage Less Affordable

May 18, 2000

FOR IMMEDIATE RELEASE

CONTACT: Richard Coorsh

May 18, 2000

(202) 824-1787

e-mail: rcoorsh@hiaa.org

WASHINGTON, D.C. – Proposals that would mandate expanded coverage for mental health benefits must be balanced by how much they would increase coverage costs for employers and consumers, according to Dean A. Rosen, senior vice president of policy and general counsel of the Health Insurance Association of America (HIAA).

Mr. Rosen, testifying today before the Senate Committee on Health, Education, Labor and Pensions, said it is clear that there are higher coverage costs associated with mandates that would require health plans to provide reimbursement for mental health services on the same basis as reimbursement for other health services.

"There is a balance that must be achieved between benefit mandates and the cost of insurance – where that balance is struck will have an impact on how many Americans have health coverage, and how many do not," he noted.

Mr. Rosen testified that studies indicating that mental health parity has no cost, or results in cost savings, base their conclusions on employer health plans that incorporated parity and managed care at the same time. "In those cases, the savings resulting from the adoption of managed care masked the cost of expanded coverage for mental illness," he observed.

Mr. Rosen noted that proposals that would add mandated benefits, including mental health parity, do not take place in a vacuum. In particular, he observed that proponents of mental health mandates who would rely upon managed care to hold down cost increases often ignore how so-called "patient protection" and antitrust waiver legislation would increase prices paid for health care, and undermine managed care’s ability to hold down health care cost increases.

Mr. Rosen cited HIAA research showing that the cumulative cost of mandates – including state mental health mandates – is responsible for at least one out of five of the nation’s more than 44 million uninsured Americans.

Additionally, Mr. Rosen indicated that in states with mandated coverage for mental illness, the likelihood that any given citizen will be uninsured increases by six percent. And, he pointed to separate research indicating that cost increases associated with a full mental health parity requirement could cause up to 3.2 million people to lose health coverage – more than three times the number of Americans who lose coverage each year due to all other causes.

The Health Insurance Association of America (HIAA) is the nation’s most prominent trade association representing the private health care system. Its 294 members provide health, long-term care, dental, disability, and supplemental coverage to more than 123 million Americans. It is the nation's premier provider of self-study courses on health insurance and managed care.

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PLEASE NOTE: A copy of Mr. Rosen’s testimony is available at http://www.hiaa.org/news/news-state/000515MentalHealthParity.htm