White House to Require Full Mental Illness Insurance Parity for Federal Employees

Posted on May 25, 1999

Arlington, VA - Millions of Americans are cheering today at the news that the White House plans to require health insurance coverage for severe mental illnesses comparable to that for physical ailments for federal employees and their families.

"This initiative represents a historic opportunity to end discrimination against individuals affected by severe mental illness and their families," said Laurie Flynn, NAMI's executive director, "and to help lead the nation in correcting discriminatory healthcare policies toward individuals with such brain disorders as schizophrenia, major depression, and bipolar disorder."

The Federal Employees Health Benefits Program (FEHBP), administered through private insurance carriers, covers more than 9.5 million Federal employees and their family members. As the largest health insurance program in the nation, FEHBP serves as a model for the rest of the healthcare industry.

"NAMI applauds the Administration for its leadership in taking this important step forward," said Flynn. "It's now time to extend these important protections by using the FEHBP measure as the model for all private insurance plans."

"Along with proposed federal parity legislation, this initiative comes at a critical juncture for finally making health insurance discrimination a thing of the past," said Flynn.

Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN) have introduced the Mental Health Equitable Treatment Act of 1999, which would require private insurance plans to provide full parity for the most severe, biologically based mental illnesses by prohibiting unequal restrictions on annual and lifetime mental health benefits, inpatient hospital days and outpatient visits, and out-of-pocket expenses.

The White House announcement also builds on a major push in the states to enact parity legislation. Since 1990, 22 states have enacted parity laws, five in 1999 alone. Furthermore, parity bills are currently pending in nine additional states, including California and New York.

Despite strenuous objections to parity measures by business interests, actual experience is demonstrating that mental health parity is also affordable and cost effective. In 1998, the National Advisory Mental Health Council reported that under managed care, full parity increases healthcare costs less than one percent a year. Plans that implement parity in conjunction with managed care actually are able to reduce costs by as much as 30 to 50 percent. In March 1999, the Substance Abuse and Mental Health Services Administration also released data from a national survey showing that 86 percent of employers who made changes in employee health plans in order to comply with an existing federal partial-parity law found that they did not need to make any compensatory reductions in other benefits because cost increases were nonexistent or minimal.