Access and Utilization of New Antidepressant and Antipsychotic Medications. D. Mental Health Parity Legislation: Promise and Threat


Debate continues to rage over guaranteed "parity" in insurance benefits for mental health treatment. Generally, insurers and employers resist parity along with all mandates. Advocates promote parity as a matter of equity for people who happen to suffer from a mental rather than physical form of illness, and also argue that such coverage would increase productivity and reduce costs (e.g., for physical health care, disability benefits).

Nationally, a limited form of parity was enacted in 1996, prohibiting group health plans that offer mental health benefits from imposing more restrictive annual or lifetime limits on spending for mental illnesses than they do for physical illnesses. To date, this law -- which took effect January 1, 1998 -- does not appear to have raised employer costs or tightened benefit packages in any significant way. Some plans may have countered the law through more restrictive day/visit limits or reductions in reimbursement rates for providers. Advocates continue to pursue expansions of the law, particularly to include substance abuse and to prohibit differential co-payment requirements or day/visit limits. The Administration is supportive, but will not push the issue until after Congress considers The Patients' Bill of Rights legislation (see below). The legislative outlook for expansion of parity is probably weak in the short term, but it will continue to be pursued over time. The outlook for expansion in Federally-controlled programs (e.g., Federal employees, Department of Defense) is more positive. The Federal Employee Health Benefits Program is scheduled to require parity beginning in 2001.

At the same time, individual States continue to consider and implement parity in varying forms. This legislation is an extension or alternative to the mandated minimum mental health insurance benefits that many States enacted or considered in the 1980s. To date, at least 28 states have enacted some form of parity. The chief differences concern whether the coverage includes substance abuse/chemical dependency services, only "severe mental illnesses," or all mental health conditions. In addition there is variation in the population covered by the parity legislation, ranging from most insured people to only a limited population (e.g., state employees).

Parity legislation may inadvertently pose threat to coverage of all FDA-approved psychotherapeutics. Plans that engage in aggressive formulary management of other drug classes may be able to use a parity argument to do the same for psychotherapeutics. The net result may be a less comprehensive selection of psychotherapeutics being reimbursed than had been previously.