Federal Legislation to Provide Full Insurance Coverage for Severe Mental Illnesses

Posted on April 14, 1999

Arlington, VA - U.S. Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN) today introduced legislation that will end harmful and discriminatory health insurance coverage for adults and children with the most severe mental illnesses.

"This historic legislation recognizes and accepts severe mental illnesses as the real medical conditions they are," said Laurie Flynn, executive director of the National Alliance for the Mentally Ill (NAMI). "Families across the United States will no longer have to struggle to receive the life-saving treatments that are vital to recovery."

The Mental Health Equitable Treatment Act of 1999 would require full insurance 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.

Under the Domenici-Wellstone measure, full insurance parity would be provided for schizophrenia, bipolar disorder, major depression, obsessive-compulsive and panic disorders, posttraumatic stress disorder, autism, and other severe and disabling mental disorders, such as anorexia nervosa and attention-deficit/hyperactivity disorder. Insurers would be required to fully reimburse services for these disorders at the same level set for the treatment of other physical conditions.

The proposal would also prohibit limits on the number of inpatient days and outpatient visits for mental health treatment in general.

"Senators Domenici and Wellstone refuse to leave behind those who have been stranded by the double standard held against so many with these debilitating brain disorders," said Flynn. "We applaud their courage and commitment to finishing the important work they began more than two years ago."

The new legislation builds on the two lawmakers' groundbreaking, but limited, Mental Health Parity Act of 1996, which required only that annual and lifetime benefits for mental illnesses be equal to those offered for other physical disorders. Currently, health plans can still discriminate by limiting hospital days and outpatient visits, severely affecting the ability of individuals with the most serious and chronic mental illnesses to receive needed medical care.

Although business interests strenuously objected to the earlier law, actual experience is showing that health insurance parity is affordable and cost effective. The latest federal report on the costs of health insurance for mental illnesses, issued in July 1998 by the National Advisory Mental Health Council, concludes that full parity increases total healthcare costs less than one percent a year under managed care. The study also finds that plans implementing parity in conjunction with managed care could actually reduce costs substantially - by as much as 30 percent to 50 percent.

The new measure, which would apply only to group health plans that already provide mental health benefits, would exempt small businesses with 25 or fewer employees and eliminate the September 31, 2001 sunset provision in the Mental Health Parity Act of 1996.

Recent data from the World Bank and the World Health Organization show that four severe mental illnesses covered by the Domenici-Wellstone legislation - schizophrenia, bipolar disorder, major depression, and obsessive-compulsive disorder - account for four of the top ten most disabling illnesses in the United States and in the world.

"By standing up for those most hurt by insurance discrimination - individuals with disabling mental illnesses - ," said Flynn, "Senators Domenici and Wellstone are saying that it's not acceptable to sentence people with these disorders to half lives of inadequate medical treatment, social isolation, unemployment, criminalization, homelessness, and for far too many, premature death."

"This legislation also follows science, which shows that severe mental illnesses are real, identifiable, and treatable. By supporting this critical measure, Congress will greatly reduce the tremendous burden and cost that is incurred to the individual, the family and to society when treatment is denied."