Health insurance discrimination exacerbates the stigma that discourages people from seeking treatment for mental and substance abuse disorders. Mental Health Parity
Every year, about 54 million Americans suffer from clearly diagnosable mental or substance abuse disorders.
About 26.2 percent of the population are afflicted with mental illness or substance abuse disorders.
2 Approximately 14.8 million Americans suffer from depression and 2.4 million suffer from schizophrenic disorders. More than 23 million people aged 12 or older needed treatment for alcohol or illicit drug use in 2004—but only 2.3 million received it. Among the remaining 21.1 million, cost and insurance barriers were cited as the primary obstacle to treatment.
3 About 12 million children suffer from mental disorders such as autism, depression and hyperactivity.
Individuals with mental or substance abuse disorders face discrimination from health insurers.
Insurers increase patients’ costs for mental health treatment in three ways—by limiting inpatient days, capping outpatient visits, and requiring higher copayments than for physical illnesses. Over 90 percent of workers with employer-sponsored health insurance are enrolled in plans that impose higher costs in at least one of these ways. Forty-eight percent are enrolled in plans that impose all three limitations.
Health insurance discrimination exacerbates the stigma that discourages people from seeking treatment for mental and substance abuse disorders.
Many Americans fail to treat mental and substance abuse disorders—not just because of the cost, but because of the social stigma surrounding mental illness. Insurers that discriminate against individuals with mental illness reinforce that stigma, feeding a vicious cycle of depression and isolation.
Untreated mental disorders cost America billions of dollars.
Mental disorders cost America billion in direct treatment costs.
and 3 billion a year in ancillary costs—such as lost employment, reduced productivity, criminal justice, traffic accidents and social welfare programs like Medicaid and SCHIP—associated with mental disorders.
Depression alone costs the U.S. billion annually.
The benefits of mental health parity far outweigh the costs.
North Carolina experienced a 70 percent reduction in mental illness hospital days for state employees and their dependents—the only group eligible for parity under the state’s law. Oregon’s comprehensive parity law resulted in a mere 0.5 percent increase in premium costs. Blue Cross Blue Shield of Vermont’s cost increased by just four percent after the state’s comprehensive parity law was enacted in 1997—and substance abuse coverage accounted for only 2.47 percent of overall costs.
Congress enacted a law that prevents some types of discrimination against individuals with mental illnesses.
In September 1996, President Bill Clinton signed the Mental Health Parity Act. The law requires that companies that employ more than 50 people and that provide some mental health insurance benefits cannot impose lower annual or lifetime dollar limits on mental health benefits than on physical health benefits. Companies, however, are not required to offer mental health benefits, nor are they prohibited from offering mental health patients fewer services and higher out-of-pocket costs.
States have taken the lead to address mental health parity.
Thirty-six states have enacted some type of mental health parity law. Five state laws (CT, MD, MN, OR, VT) apply to all mental health and substance abuse disorders under private insurance plans. Six other states (IN, KY, ME, NM, RI, WA) have slightly less comprehensive laws that contain specific exemptions or limitations. Twenty-five states (AZ, AR, CA, CO, DE, HI, IA, IL, LA, MA, MO, MT, NE, NH, NV, NJ, NC, OK, SC, SD, TX, TN, UT, VA, WV) have laws that apply only to select groups, such as those with severe mental illnesses or government employees, or only prohibit certain forms of discrimination.
Americans strongly support mental health parity.
Eighty-three percent of Americans believe it is unfair for health insurance companies to limit mental health benefits and require people to pay more out-of-pocket for mental health care than for other medical care, according to an Opinion Research poll commissioned by the National Mental Health Association. Seventy-nine percent say they support mental health parity legislation even if it results in an increase in their health insurance premiums.10
1. National Mental Health Association, “Mental Illness in the Family,” 2005.
2. National Institutes of Mental Health, “The Numbers Count: Mental Disorders in America,” 2006.
3. Substance Abuse and Mental Health Services Administration’s Office of Applied Studies, “National Survey on Drug Use and Health,” September 2005.
4. Colleen Barry et al., “Design of Mental Health Benefits: Still Unequal After All These Years,” Health Affairs, September/October 2003.
6. U.S. Office of the Surgeon General, “Mental Health: A Report of the Surgeon General,” 1997.
7. University of Maryland School of Medicine, “Facts about Mental Disorders,” 2003.
8. Depression and Bipolar Support Alliance, “The State of Depression in America,” February 2006.
9. Ellen Perlman, “Piecemeal Parity,” Governing Magazine, February 2006.
10. Opinion Research Corporation, September 2002.
2006 by the Center for Policy Alternatives