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Mental Illness Insurance Parity
NAMI strongly supports legislation to require health plans to cover treatment for mental illness on the same terms and conditions as all other illnesses – mental illness insurance parity. This measure, the Senator Paul Wellstone Mental Health Equitable Treatment Act (S 486/HR 953), is sponsored by Senators Pete Domenici (R-NM) and Edward M. Kennedy (D-MA) and Representatives Jim Ramstad (R-MN) and Patrick Kennedy (D-RI). It currently has strong bipartisan support on both sides of the Capitol, with 67 Senate cosponsors and 241 House cosponsors. In addition, President Bush has pledged support for federal legislation to require parity for mental illness coverage.
As the nation’s largest organization representing individuals living with mental illness and their families, NAMI believes strongly that mental illnesses are real illnesses, that treatment works and that there is no medical or economic justification for health plans to cover treatment on different terms and conditions. NAMI urges all members of Congress, on both sides of the aisles to:
- cosponsor S 486/HR 953,
- contact President Bush and thank him for his support for parity and urge him to push action in Congress in 2004, and
- contact House and Senate leaders and urge them to work with the White House to ensure that a parity bill is passed as soon as possible.
End Insurance Discrimination Against People with Mental Illness and Their Families
NAMI would also like to remind all members of Congress that:
- untreated mental illness costs American businesses, government and families at least $79 billion annually in lost productivity and unemployment, broken lives and broken families, emergency room visits, homelessness and unnecessary use of jails and prisons,
- mental illnesses such as schizophrenia, bipolar disorder, major depression, obsessive-compulsive disorder and severe anxiety disorders are real illnesses,
- treatment for mental illness works, if accessible – treatment efficacy rates for most severe mental illnesses exceed those for heart disease and diabetes,
- there is simply no scientific or medical justification for insurance coverage of mental illness treatment to be on different terms and conditions than other diseases,
- discriminatory insurance coverage of mental illness bankrupts families and places a tremendous burden on taxpayers through higher expenditures for public disability and health benefits, chronic homelessness and inappropriate "criminalization" of mental illness, and
- 34 states have enacted parity laws similar to S 486/HR 953, but even these laws offer no protection for workers and their families covered under self-insured Employee Retirement Income Security Act (ERISA) plans.
Mental Illness Parity is Affordable and Good for Business
- S 486/HR 953 exempts employer health plans with 50 or fewer workers. The legislation also allows employers and health plans to control costs through managed care.
- Mental illnesses can affect a worker’s productivity and health as much, if not more than, a physical illness. An employee with an untreated or undertreated mental illness may add to employer costs via: absenteeism, turnover and retraining expenses, poor morale and lower productivity, injury and compensation costs, conflict among employees, and increased medical costs.
- The National Institute of Mental Health estimates that the annual cost of untreated mental illnesses exceeds $300 billion, primarily due to the productivity losses (missed days of work and premature death) of $150 billion, health care costs of $70 billion, and societal costs (increased use of the criminal justice system and social welfare benefits) of $80 billion.
- The Congressional Budget Office (CBO) has estimated that S 486/HR 953 will increase health insurance premiums by 0.9%. (Cost Estimate for S 543, Mental Health Equitable Treatment Act of 2001. Washington, DC: CBO, August 22, 2001.)
- PricewaterhouseCoopers estimates that S 486/HR 953 will increase premiums by 1.0%. This represents a cost to a typical plan of $1.32 per covered person each month. (Bachman, Ronald E. "An Actuarial Analysis of HR 4066/S 543, the Mental Health Equitable Treatment Act of 2001." Atlanta, GA: PricewaterhouseCoopers, July/August 2001.)
- S 486/HR 953 mental health parity is modeled on that provided for federal workers under the Federal Employees Health Benefits Program (FEHBP), which was implemented in 2001. The Office of Personnel Management (which administers FEHBP) estimates that parity implementation increased plan premiums by 1.3%. (Oversight Hearing on Achieving Parity for Mental Health Services Before the Senate Committee on Health, Education, Labor and Pensions (Statement of William E. Flynn, III, Associate Director For Retirement and Insurance, Office of Personnel Management, July 11, 2001).)
Untreated/Undertreated Mental Illness Costs Employers
- An MIT Sloan School of Management report showed in 1995 that clinical depression costs American businesses $28.8 billion a year in lost productivity and worker absenteeism.
- Depressed workers have between 1.5 and 3.2 more short-term work disability days in a given 30-day period than other workers. The average salary equivalent disability costs of these days range between $182 and $395 per depressed worker. (Health Affairs, Volume 18, Number 5; 1999.)
- Of the 11 million individuals who suffer from depression in any given year, approximately 7.8 million are found in the workplace. (American Journal of Psychiatry, 1998; 145:1351-1357.) The annual cost per employee is $4,200. (Journal of the American Medical Association, 1997; 277:333-340.)
Treatment of Mental Illness Saves Employers
- When workers with depression were treated with prescription drugs medical costs declined by $882 per employee per year and absenteeism dropped by 9 days (Health Economics).
- A 1998 study by the UNUM Life Insurance Company and Johns Hopkins University found that employer plans with good access to outpatient mental health services have lower psychiatric disability claims costs than plans with more restrictive arrangements (Salkever, 1998; also Frank, 1999).
- "A four-year study of program effectiveness at McDonnell Douglas yielded a four-to-one return on investment after considering medical claims, absenteeism and turnover" (Wall Street Journal, June 11, 1999).
"Our health insurance system must treat serious mental illness like any other disease. And that was Senator Domenici's message to me at the Oval Office. And it was Nancy's message when we had them up for dinner. And I want to appreciate the fact that they have worked tirelessly on this problem. I have a record on this issue. As the Governor of Texas, I signed a bill to ensure that patients who critically need mental health care are treated fairly. Senator Domenici and I share this commitment: health plans should not be allowed to apply unfair treatment limitations or financial requirements on mental health benefits. It is critical that we provide full -- as we provide full mental health parity, that we do not significantly run up the cost of health care. I'll work with the Senator. I will work with the Speaker. I will work with their House and Senate colleagues to reach an agreement on mental health parity …" President Bush, April 29, 2002
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