April 3, 2006
Study Demonstrates Mental Illness Insurance Parity is Affordable
A long awaited study of implementation of parity in the federal employees health benefits program (FEHBP) found that the added use and costs of services were minimal, when compared with the experience of plans with less generous benefits. This study confirms what NAMI has long advocated – that eliminating arbitrary and inflexible limits on coverage for treatment of mental illness is affordable for health plans and employers.
The study, in the New England Journal of Medicine, examined what happened when the FEHBP program (which covers 8.5 million federal employees, retirees and dependents) eliminated inequitable limits such as caps on inpatient days, outpatient visits, higher cost sharing and deductibles, etc. applied on coverage for mental illness and substance abuse. The Clinton Administration imposed this parity requirement by Executive Order in 1999.
Over the two years examined in the study, researchers found that the proportion of people using mental health services rose by 1.35% to 2.75%, compared with the two years before the change. However, both spending and use of mental health services did not increase more than a set of similar large employer plans that kept limits on mental health services in place. Researchers found that any increase in costs was mainly due to inflation and an expected rise in the use of mental health services and medications.
However, what did change with plans in the FEHBP program was a significant drop in out-of-pocket costs for those who used mental health services. In all but one of the plans, enrollees saw individual savings ranging from $8.78 to $87.06 as the cost of picking up those amounts were spread across the entire plan.
This new study is important because it demonstrates once again that implementing parity – and eliminating discriminatory limits on coverage – is affordable. In the coming weeks, NAMI will be using this important study to redouble efforts to move federal parity legislation in Congress. In addition, a number of state legislatures are now considering parity measures – adding to the 36 states that have already passed some form of non-discriminatory coverage.
To view the complete study in the New England Journal of Medicine, please click here.