Pivotal Victory for Americans With Severe Mental Illnesses

Posted on December 15, 1997

Arlington, VA - The National Alliance for the Mentally Ill (NAMI) today lauded the Clinton Administration for standing behind a landmark law that ends at least some health insurance discrimination against millions of Americans with severe mental illnesses. The White House is expected to release a formal decision sometime next week.

Despite intense pressure from special interests to allow a legal loophole, the Administration has decided that employers must first comply with the Mental Health Parity Act of 1996 before seeking an exemption because of higher health insurance costs.

"This is a tremendous victory, an important first step in getting equal treatment for mental illness," said NAMI Executive Director Laurie Flynn. "The Administration's move in favor of American families sends a loud and clear message - discrimination is wrong. We applaud the President for his courage in putting people first."

The parity law, which requires annual and lifetime benefits for mental illnesses to be equal to that offered for other disorders, allows employers to be exempted if their costs rise more than one percent as a result of complying with the law.

According to sources today, the Administration has ruled that employers must first comply with the law in 1998 and develop a cost history (retrospective data) before seeking an exemption. By contrast, some business groups had argued that firms be allowed to use the exemption based on estimates of higher costs (prospective data), thereby relieving them of the responsibility to ever comply.

"The days of being cast as second-class citizens from a health care system historically indifferent to their needs are over," said Flynn. "This modest anti-discrimination law eliminated the double standard held against millions of Americans suffering from brain disorders and instead gives them renewed hope for reestablishing full and productive lives." The Administration is also expected to require disclosure of the names of firms seeking exemption, a hotly debated issue opposed by many business groups.

While special interests were pressuring the White House to draft regulations that would weaken the law, researchers at the Rand Corporation and the University of California at Los Angeles found that mental health benefits would not add significantly to insurers' costs. The Rand study concluded that parity will increase costs by only about $1 per employee each year.

Additionally, a survey conducted for NAMI by William M. Mercer, Inc., indicated little resistance by employers to comply with the new law, with 85 percent of businesses familiar with the law either in compliance or planning to make changes to comply with the law by the end of the year.

With more than 168,000 members, NAMI is the nation's leading grassroots organization solely dedicated to improving the lives of persons with severe mental illnesses, including schizophrenia, bipolar disorder (manic-depressive illness), major depression, obsessive-compulsive disorder and anxiety disorders. NAMI has more than 1,140 state and local affiliates in all 50 states, the District of Columbia, Puerto Rico, and Canada.