NCPA - National Center for Policy Analysis

Mental Health Parity Laws Do Not Improve Access, Care Quality

August 11, 2000

In efforts to improve coverage for mental illness, many states have considered mental health parity laws patterned after the 1996 Mental Health Parity Act (MHPA). The federal MHPA stated that plans providing both medical and surgical benefits and mental health benefits cannot impose lifetime or annual expense limits on the mental health benefits if such limits are also not imposed on medical and surgical benefits. As of the end of 1999, mental health parity legislation had been introduced in 34 states, 19 of which passed some variation of it.

Two recent studies from the Rand Corp. conclude that both access and quality of care have declined since the enactment of mental health parity laws.

  • The new laws have not triggered an increase in the use of mental health services.
  • Individuals with probable mental health disorders lost insurance more often than they gained insurance between 1996-1998.
  • Individuals with severe mental illness who live in states with parity laws are not more likely to use their services than other severely mentally ill in nonparity states.

According to the studies, changes in access and care may be attributable to loss in coverage by the mentally ill or changes in the insurance market. In response to these laws, the insurance market has shifted toward a more aggressive managed care approach for mental health care than for general medical care.

Despite the passage of many mental health parity laws, these studies conclude that insurance coverage remains a problem for those at risk for mental health disorders.

Source: "RAND Studies Say Parity Laws Have Not Improved Access, Care Quality," BNA's Health Care Policy, April 17, 2000.

For Rand abstracts of "Mental Health Parity Legislation: Much Ado About Nothing" and "Health Insurance May Be Improving -- But Not For Individuals With Mental Illness"


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