Health Affairs Examines 1996 Mental Health Parity Law

With the 1996 Mental Health Parity Act set to expire on Sept. 30, two articles in the July/August issue of Health Affairs discuss whether Congress should extend the law and outline "options for the future." The act -- "widely considered groundbreaking" -- prevents group health plans that offer both medical/surgical and mental health benefits from placing a cap on annual or lifetime mental health benefits that is lower than caps on medical/surgical benefits. The two reports find that the 1996 law has resulted in "minimal additional costs" for purchasers or patients, and has had a "powerful influence" on state mental health laws, with 32 states passing mental health parity legislation through November 2000. However, the articles "differ on the issue of appropriate next steps."

In a report titled "Full Parity: Steps Toward Treatment Equity for Mental and Addictive Disorders," Kevin Hennessy, an HHS health policy analyst, and Howard Goldman, a psychiatry professor at the University of Maryland Medical School, write that mental health parity "resolves some, but far from all, obstacles" to care for those with mental disorders, and thus should be regarded as a "sequential" but not final step toward full treatment equity. They note that full parity "generally indicates a nominal expansion of benefits" -- in other words, an expansion of the coverage a health plan indicates in written policies that it provides -- but also has "yielded increased management of care," which can produce "unequal treatment opportunities." In addition, removing "arbitrary and inequitable" treatment limits under parity "may have little effect on the concomitant stigma that keeps many who need mental health" services from seeking them. Further, while parity laws "may clearly encourage service use" for some patients, they "will do little" for those who lack health insurance, the authors write. The authors conclude that parity laws may represent a "sequential step" toward a "broader goal of achieving equity" in mental health treatment, noting that "congressional passage of full parity for mental and addictive disorders would likely confirm for [patients] that their illnesses are real and on par with those suffering from any other physical disorder." However, the authors maintain that "legislating full parity will ... not achieve treatment equity for those with mental and addictive disorders" (Hennessy/Goldman, Health Affairs, July/August 2001 issue).

In the second article, Daniel Gitterman, an assistant professor of public policy at the University of North Carolina; Roland Sturm, a senior economist at RAND; and Richard Scheffler, a professor of health economics and public policy at the University of California-Berkeley, contend that taking additional steps beyond parity could "recreate the original problems" that made the 1996 law necessary in the first place. In an article titled "
Toward Full Mental Health Parity and Beyond," the authors note that while barriers to care in managed behavioral health care remain, "[s]mall steps to protect consumers" in such plans are "far more likely to succeed than is returning to the earlier fee-for-service system or even trying to prevent specialization in managed care." The authors maintain that additional steps, such as "direct regulation" of managed care or "vast improvement in measuring the quality of mental health services and the performance of managed behavioral health care plans," may prove "costly, complex, difficult to monitor and possibly a legal morass that no politician wants to be associated with." They conclude that by "confronting the ... sunset" of the 1996 law, Congress is likely "to take one more step toward 'full' mental health parity," to encourage "further innovation and experimentation" among states and to require an evaluation of the "impact of expanded parity on costs, access and quality" (Gitterman et al., Health Affairs, July/August 2001 issue).