Where We Stand: Mental Health Parity
A Response to Discrimination in Health Insurance Benefits
What is parity?
Mental health parity would require that health insurance
coverage of physical illnesses and disorders be treated the same as for
mental illnesses and disorders. Parity is a legal mandate
prohibiting health insurance policies from discriminating based on a
particular illness, disorder, or health condition. Mental health
parity is a legal means prohibiting discrimination based on a mental
disorder.
Why is CHADD
concerned?
Most health
insurance plans in America treat mental disorders in a discriminatory
fashion when compared to physical disorders. The
typical health insurance plan in America authorizes unlimited
hospitalization for physical disorders while limiting hospitalization
for mental disorders to 30 days per calendar year. The typical insurance plan in America authorizes a broad array
of outpatient services for physical insurance, but limits outpatient
mental health services to 20 visits each year.
The Surgeon General’s Report on Mental
Health (published in December 1999) affirmed at the highest
level that attention-deficit/hyperactivity disorder (AD/HD) is a mental
disorder. Thus, AD/HD is limited by the same discriminatory
insurance practices as other mental disorders.
Types of health
insurance discrimination
There are
generally four types of discriminatory health insurance practices used
against the coverage of mental disorders: hospital day limits;
outpatient visit limits; discriminatory out-of-pocket obligations; and
discriminatory lifetime and annual plan expenditure limits. Typical
health insurance plans require a 20 percent copayment for outpatient
visits. Typical health insurance plans require a
50 percent copayment for outpatient mental health services.
The Mental Health
Parity Act of 1996, U.S. Public Law 104-204, prohibits the use of
discriminatory lifetime and annual health plan expenditure limits for
mental disorders, excluding addictive disorders. It applies only to
insurance plans offering mental health benefits, which includes most
plans in America. It exempts small employers, who are defined as
employers with 50 or fewer employees, from the national legal
requirement. Further, if the cost of meeting the mental health
requirement exceeds a one percent increase in actual health plan costs,
that particular health plan is exempt from the national law
requirement.
Current federal
legislation
Two legislative bills
are currently pending before the U.S. Congress to extend and expand the
Mental Health Parity Act of 1996:
• S. 558, with
Senators Pete Domenici (R-NM), Edward Kennedy (D-MA), and Michael Enzi
(R-WY) as the lead sponsors, passed the U.S. Senate on September 18,
2007.
• HR 1412, with
Representatives Patrick Kennedy (D-RI) and Jim Ramstead (R-MN) as lead
sponsors, has passed three House committees but has not been considered
on the House floor.
The House bill is
more comprehensive in its coverage of diagnoses and its benefits. HR
1412 would mandate coverage of every disorder in the Diagnostic and Statistical Manual (DSM). S. 558 would
allow employers to decide which DSM conditions to cover. The House bill
mandates benefits currently covered under the Federal Employee Health
Benefit Program. The Senate bill does not mandate benefits.
What should CHADD
members do?
Most national mental
health and substance abuse organizations, including CHADD, prefer the
House bill over the Senate bill. However, as we enter the 2008 election
year, enactment of the Senate legislation is preferable to no progress
since the 1996 act.
CHADD members are encouraged to write their federal legislators,
emphasize the importance of mental health benefits to the treatment of
AD/HD, and encourage legislators to enact in 2008 a mental health parity
bill, at least as detailed as S. 558 and preferably as comprehensive as
H.R. 1424.
Original Release Date:
April 17, 2001
Updated: January 29,
2008
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