NCPA - National Center for Policy Analysis

Mental Health Parity

November 7, 2001

The Mental Health Equitable Treatment Act of 2001 (S. 543), sponsored by Sen. Pete Dominici (R-N.M.) and Sen. Paul Wellstone (D-Minn.) would outlaw disparities in coverage between mental and physical illness under all group health plans sponsored by employers with more than 50 employees. The bill has passed the Senate and is in conference with the House.

In a study on the new Senate legislation, the Congressional Budget Office estimated:

  • The bill would cause health insurance premiums to rise an average of 0.9 percent .
  • The bill would impose a mandate costing the private sector $23 billion over five years.
  • The federal government would lose $2.2 billion of revenue in the next five years, and a total of $5.4 billion from 2002 to 2011, because workers would receive less of their compensation in taxable wages and more in tax-free fringe benefits.

Advocates for the mentally ill said they believed that the costs could be lower, based on the experience of states with mental-health-parity laws.

At present, people who are treated for mental illnesses often face higher co-payments and deductibles than they would have to pay if they were being treated for physical ailments, and many insurance plans cover fewer visits to a doctor, and fewer days of hospital care, when patients are treated for mental illness.

Source: Robert Pear, "Furious Lobbying Is Set Off by Bill on Mental Health," New York Times, November 6, 2001.


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