The Political Evolution of Mental Health Parity

Abstract

This article traces the evolution of the mental health parity debate in American politics, with a focus on how interest groups and politicians have attempted to influence perceptions about treatment effectiveness and the cost of benefit expansion. When parity laws are in place, they require health plans operating in the private health insurance market to provide an equivalent level of coverage for mental health and general medical care. Business and insurance industry groups oppose parity due to cost concerns. The mental health community has framed parity as an antidiscrimination measure that would achieve greater insurance equity across disease groups. The role of personal experience with mental illness among lawmakers and others in framing the parity debate is also considered.

Keywords:

• mental health insurance
• parity
• politics

Notes

¹See, for example, Kendra's Law enacted in New York State requiring mandatory outpatient treatment for individuals identified as likely to have difficulty living safely in the community. This law was passed after 32-year-old Kendra Webdale was pushed in front of a subway train by Andrew Goldstein, a man repeatedly hospitalized for schizophrenia. Another example involves state and federal versions of Megan's Law requiring registration and community notification with the release of convicted sexual offenders into the community.

²Data on state parity laws were obtained through the National Alliance for the Mentally Ill Web site⁹ and validated with data collected by the American Psychiatric Association,¹⁰ National Council of State Legislatures,¹¹ National Mental Health Association,¹² and published research.¹³

³Under the law, annual and lifetime dollar limits are not prohibited per se. The law states that you can impose dollar limits for mental health care only if you also impose them for general health care.

⁴Services used only when an insurance-reduced price is available are deemed to be not worth the cost—an implication that follows from the assumption that the demand curve represents willingness to pay. Moreover, consumer demand response was found to be greater for mental than for physical health care, implying that a given reduction in price due to insurance would create more inefficiency in mental than in physical health care use.²⁹