The following is a list of misconceptions that the mental health lobby has forwarded about mental health parity, and the facts that counter and disprove their arguments. This shows the need for legislative caution and for the federal Mental Health Equitable Treatment Act to be shelved. State mandated mental health parity should also be abolished.

2.0 What They Say:

The federal Mental Health Equitable Treatment Act, which provides for mental health parity, needs to be passed immediately.

2.1 What They Don’t Say:

  • According to the Congressional Budget Office (CBO), the cost of mental health parity will be $5.4 billion and will raise health insurance premiums by nearly 1%. However, this is most likely far less than the real costs, as studies show that low percentage increases are flawed. The legislation will force companies and businesses that offer mental health coverage—many of whom are already suffering tremendous financial hardships because of the attacks on America—to foot this bill.7

  • The bill imposes a private-sector mandate on group health plans and group health insurance issuers by prohibiting them from imposing treatment limitations or financial requirements for mental health benefits that differ from those placed on medical and surgical benefits.8

  • Businesses that offer mental health coverage will not be able to minimize the increases in insurance premiums (the prior 1996 law had a 1% increase cap on premiums) and will be forced to cover all of the disorders listed in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM).9

  • Yet candidly, Dr. Joseph Glenmullen, Clinical Instructor in Psychiatry at Harvard Medical School, states, “…the current DSM is a compendium of checklist diagnoses: cursory, superficial menus of symptoms in which a minimum number (for example, four of eight or three of twelve) is needed to make a particular diagnosis….Any attempt to help patients understand themselves and to effect real change is lost in the rush to diagnose and medicate them.”10

  • Michael Tanner, Director of Health and Welfare Studies at the CATO Institute, says, “Mandating parity for mental health treatment amounts to a virtual blank check for the mental health industry.”11

  • The National Center for Policy Analysis (NCPA), a Dallas-based think-tank says that the Mental Health Equitable Treatment Act “is more bad news for businesses.” Senior Fellow Greg Scandlen said: “Congress is getting real good about spending money. They love to pass mandates on the way you do business because they can go home and tell voters they have done something about a social problem—at no cost to taxpayers.” But this law “will have a huge cost. It’s another straw on the camel’s back,” he said.12

  • Dr. Mark Schiller, psychiatrist and Senior Fellow in Medical Studies at the California-based Pacific Research Institute for Public Policy, says, “…Mental health parity legislation is not a civil rights issue. It is an issue of whether government should force private companies to do something that is against their business interests and which would have severe unintended consequences. Increased mental health coverage will cost money….”13

    3.0 What They Say:

    “Since the Mental Health Parity Act became law, we have seen that the costs have remained low and manageable.”14

    3.1 What They Don’t Say:

  • In 2001, the National Center for Policy Analysis said that critics of mental health parity have testified that “studies showing little or no cost were flawed because they reviewed plans which adopted managed care at the same time as mental health parity so that the savings from the adoption of managed care masked the cost of expanded mental illness coverage.”15

  • The CBO says that S.543 would cost the federal government $5.4 billion over the next decade and private-sector health insurers an additional $3 billion in 2002, which would further increase in later years.”16 This is saddling the nation’s companies with a financial burden it ill deserves or needs in these times of terrorist threats and economic upheaval.

  • In 2001, The National Association of Health Underwriters’ (NAHU) statement on Federal Health Benefit Mandates said that insurance mandates “add to the cost of health insurance as has been demonstrated at the state level. Estimates are that there are now over 1000 benefit mandates in existence, which various studies have shown add as much as 25% to the cost of insurance premiums….”

  • The 1996 mental health parity mandate reportedly added between an 8.4% and 11.4% increase to the cost of insurance, according to one study. And this action on mental health has, in turn, opened the door to other demands for federal benefit mandates. “The more mandating the federal government does, the more the demands for specialized mandates from all the special interests disease groups,” NAHU stated. 17

  • California psychiatrist Mark Schiller says, “Academic research concludes that mental health parity laws can increase insurance premiums between 2.5% and 8.7% in the first year.”18

  • A 1999 Substance Abuse and Mental Health Services Administration (SAMHSA) report revealed that substance abuse parity mandates alone would increase insurance premiums by 3.6%.19

  • Mental health parity legislation was estimated to cost the Oklahoma economy between $15.2 million and $49.5 million per year, and premium increases will cause 4,100 to 13,600 Oklahoma residents to go without insurance.20

  • In Wisconsin on March 23, 2000, the Office of the Commissioner of Insurance (OCI) determined that the mental health parity mandate would add between $27 million and $54 million per year to premium costs for health insurance companies in this state, borne mostly by small businesses.21

    4.0 What They Say:

    Mental health parity will provide equal insurance for all; not to provide parity is “discriminatory.”

    4.1 What They Don’t Say:

  • Mental health parity will swell the ranks of uninsured, thereby discriminating people out of the insurance market completely. A 1998 study by Dr. William Custer showed that people living in states with mandated mental health coverage were nearly 6% more likely to be uninsured than people in states without mandated benefit. Even the SAMHSA report released in October 1999 supported this claim, showing that substance abuse parity mandates would increase insurance premiums by 3.6%, a cost, according to the Congressional Budget Office, that would increase the number of uninsured Americans by over half a million a year. And private economists put this number closer to one million.22

  • The Buckeye Institute in Dayton, Ohio, found that even with a lower range of premium increases for mental health parity, some 30,000 to 45,000 people in Ohio would become uninsured. Higher premium increase estimates would produce 80,000 to 120,000 more uninsured.23

  • The Goldwater Institute in Arizona found similar results with an estimated 11,000 to 37,000 Arizonans predicted to lose medical coverage.24

  • Large majorities of people are unlikely to benefit from mental health parity. In a RAND Institute study, it was found that the generosity of insurance did not affect the mental health status of the average person. They conclude, “For policies targeted at the average person, improved mental health status, per se, does not appear to provide a compelling argument in favor of more generous coverage.”25

    Next: Mental Health Parity Analysis continued

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