The Clinton administration wants to require health insurers to provide the same coverage for mental illnesses as for physical illnesses. But a new study by Richard G. Frank of Harvard University and Thomas W. McGuire of Boston University shows that powerful economic forces compel plans to discriminate between physical and mental conditions.

• In health care, a few patients always account for a large fraction of expenditures, a situation which becomes even more exaggerated for mental health -- where just 5 percent of patients may account for 30 percent or more of costs.

• So a plan whose lavish benefits attract the sickest mentally ill people invites bankruptcy.

• While people with health insurance buy more treatment than do the uninsured, studies of patients in fee-for-service plans show that the impact of insurance on demand for treatment is twice as large for treatment for mental problems as for physical problems.

• Some of the insurance-induced demand is for mental health services that patients did not deem very valuable when asked to pay for it themselves.

About 12 percent of the population with no diagnosable mental disorders receive treatment and account for nearly one-third of all visits for mental health.

Thus, requiring parity between physical and mental health converage could raise premiums, causing more employers to drop insurance benefits altogether.

Source: Michael M. Weinstein, "Solutions Can Become Problems for Mental Illness Insurance," New York Times, June 24, 1999.