Mental Health Parity Act of 1996 Threatened by Backdoor Maneuver

Posted on October 21, 1997

Washington, D.C. - With less than three months before landmark legislation ending insurance discrimination against mental illnesses takes effect, lack of political will threatens to undermine this important first step toward fair treatment of people with serious brain disorders. Meetings yesterday between senior White House officials, NAMI, and colleague organizations in the mental health field, showed that the Administration is backing down from the letter and spirit of the law.

Despite ample evidence that health insurance parity does not significantly raise costs and a recent study commissioned by NAMI found that nearly all businesses have already implemented Domenici-Wellstone requirements or are preparing to do so, the White House appears poised to back down from the law’s requirements.

The White House is considering regulations that would govern implementation of the law and establish a legal backdoor through which insurance companies can secretly steer employers to avoid equitable coverage for their workers and their families. This potential action conveys the wrong message to business, which already is moving to do the right thing.

The Mental Health Parity Act of 1996, originally sponsored by Senators Domenici (R-NM) and Wellstone (D-MN) and passed with overwhelming Congressional support, requires businesses to eliminate discriminatory annual and lifetime caps on health insurance coverage. Though historic, the law represents but a first small step. The measure, which goes into effect on January 1, 1998, not only exempts small businesses and discriminatory cost mechanisms such as co-pays and visit limitations, and allows companies not to offer any mental health coverage at all, but allows employers to gain an exemption if their costs rise more than one percent as a result of complying with the requirement for parity in lifetime and annual limits.

It is crucial for the President to ensure that businesses accurately estimate the cost of parity and that the government fairly and openly monitor implementation of the law. Specifically, we ask for retrospective cost assessment of implementation, public disclosure, and rigorous federal monitoring. The President must step up to the plate and ensure that this law meets its promise for people with serious brain disorders and their families.