NMHA HAILS CLINTON ADMINISTRATION FOR STANDING UP TO BUSINESS INTERESTS IN DEFENDING PEOPLE WITH MENTAL ILLNESS
(Alexandria, Va.; Dec. 15, 1997) "We are closer to the day when mental illnesses -- and people with them -- are treated fairly and compassionately in our health insurance system," said Michael M. Faenza, President and CEO of the National Mental Health Association. "President Clinton has taken a strong step protecting people with mental illnesses against health insurance discrimination. His interpretation of the 1996 Mental Health Parity Act is in accord with the intentions of its authors, Senators Pete Domenici and Paul Wellstone."
The Clinton administration is poised to release rules businesses must follow to comply with the 1996 Mental Health Parity Act. The law forbids employers with 50 or more workers to impose annual and lifetime limits on mental health care that are different from those they impose on physical health care. Insurance firms today might put a $25,000 lifetime cap on mental health care costs and a $1 million cap on physical health care, discrimination the new law prohibits.
The law states that employers could be exempt from the law if its implementation would increase their health insurance costs by more than 1 percent. Several studies suggest costs will be lower.
At issue in the rule-making was whether employers could use 1997 insurance data to estimate the cost of equalizing annual and lifetime limits on mental and physical health care. The Clinton administration sided with the National Mental Health Association and other mental health advocates -- against the opposition of business interests -- and said employers must make a good faith effort to implement the law in 1998. After six months, employers may "look back" and request an exemption based on a cost increase greater than 1 percent.
Only employers that already put their mental health care at parity with physical health care may use 1997 data to request an exemption in 1998. About twelve states now require some type of insurance parity between mental and physical health care.
Research published in the November 12, 1997 Journal of the American Medical Association (JAMA) concluded that equalizing annual and lifetime limits on mental and physical health care will cost about $1 per plan enrollee per year. "For only the cost of a cup of coffee, businesses and insurers can treat people with mental illnesses more fairly," Faenza said. The JAMA study also concluded full parity in mental and physical health treatments would cost $7 per person per year.
"Mental health parity is affordable," Faenza said. "But parity is first a basic issue of social justice. No other class of illnesses or class of people are singled out for insurance discrimination."
The administration will give all employers a three month grace period to comply with the new law, which technically becomes effective on January 1, 1998. The names of all employers that request exemptions from the law will be made public, but not proprietary insurance cost data. The new law neither requires employers to offer a mental health benefit, nor does it require parity in access to mental and physical health treatments. Insurers can still impose unfair arbitrary limits on outpatient visits and inpatient stays, and unequal copayments for care.
The National Institute of Mental Health and the U.S. Center for Mental Health Services estimate that each year 22 percent of American adults and 10 percent of American children experience some type of mental or emotional disorder. About half of them have significantly impaired functioning as a result of their illness.
Faenza said, "Treating mental illnesses is not only compassionate, it is economically sound. Employers want their employees to be functioning at their best. Not treating mental illnesses will not make them go away. The Clinton administration deserves credit for recognizing that mental illnesses are real, common and treatable, and that treatments are affordable."
To arrange an interview with NMHA President and CEO Michael Faenza, call (703) 838-7528. The National Mental Health Association is the nation's oldest mental health consumer advocacy organization. NMHA has 330 affiliates with 416,000 volunteers serving two million Americans.
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