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Equal Mental Health Benefits
Good for Families—AND—Good for Businesses

What do we mean by "equal mental health benefits"?

Equal mental health benefits, or "parity," refers to the practice-now mandated in most states-of offering mental health benefits that are on par with other health benefits with respect to plan features such as co-payments, deductibles, annual and lifetime caps, limits on covered outpatient visits, inpatient days and maximum reimbursable fees.

Who is helped by equal mental health benefits?

Working families covered by their employers' health insurance plans-employees, their spouses and their children, any of whom may suffer from a mental health problem.

Employers whose employees are more productive when they and their families get the mental health care they need.

Why do working families need equal mental health benefits?

Mental illness is far more prevalent than most people know.

28-30% of adults and over 20% of children have a diagnosable mental or addictive disorder in any given year, according to the Surgeon General.(1)

Employers who have assessed their employees' mental health needs have discovered prevalence rates such as the following: Westinghouse reported rates for major depression at 17% for women and 9% for men; Wells Fargo Bank discovered through an employee survey that 30 to 35% of respondents were experiencing depressive symptoms.(2)

Many working families cannot afford to pay for adequate mental health treatment when they need it, so many don't get the treatment they need when they need it.

55% of privately insured individuals reported that the number one reason they did not seek mental health care was that they were worried about the cost, according to a 1998 Robert Wood Johnson Foundation study.(3)

Treatment works! And it's cost-effective!

Mental health treatment outcomes have improved dramatically in recent decades; making these illnesses as treatable as general medical conditions.(4)

51% of substance abuse treatment episodes result in successful treatment completion; treatment completion is highest (73%) for treatment taking place in residential short-term and hospital settings.(5)

Treatment efficacy rates for disorders like schizophrenia (60%), bi-polar disorder (80%), major depression (80%), panic disorder (80%) and obsessive-compulsive disorder (60%) compare favorably with many well-established medical or surgical treatments.(6)

For example, angioplasty or atherectomy, common treatments for heart disease, have success rates at or below 50%.(7)

50 to 70% of a physician's normal caseload consists of patients whose medical ailments are significantly related to psychological factors. If mental health care were available to these patients, it would lead to a decrease in medical utilization and generate significant cost-savings.(8)

What do equal mental health benefits costs?

The experiences of states that require mental health benefits on a par with other health benefits show that health insurance premiums and plan costs generally increased by around 1% or less in the short term and decreased over the longer term.

Increases in plan costs after the implementation of state parity laws are minimal; for example: less than 1% in Rhode Island, no increase in New Hampshire, and a .2% decrease in Maryland.(9)

Magellan Health Services, the nation's largest managed behavioral health organization, reports that their premium increases ranged between .2% and .8% following implementation of state mental health parity requirements. (10)

Minnesota: Blue Cross/Blue Shield reduced itsinsurance premiums by 5 to 6% after one year's experience under the states comprehensive parity law. (11)

North Carolina: Mental health expenses have decreased every year since comprehensive parity for state and local employees was passed in 1992; mental health costs as a percentage of total health benefits have decreased from 6.4% in 1992 to 3.1% in 1998; since 1992, in-patient hospital days have decreased by 70%.(12)

The Congressional Budget Office has estimated that premiums would increase by about .9% as a result of passage of the Mental Health Equitable Treatment Act of 2001. (13)

Introducing mental health parity in conjunction with managed care results in a 30 to 50% percent decrease in total mental health costs. In systems that are already using managed care, implementing parity results in a less than 1% increase in health care costs. (14)

Why do equal mental health benefits make good business sense?

Equal mental health benefits make good business sense ecause better mental health benefits actually REDUCE both direct and indirect costs over time.

Employer data show that costs associated with untreated or poorly managed mental health needs far exceed direct spending for mental health care. For example, 28% of the annual economic costs of depression in 1995 were from treatment but 72% of costs were related to absenteeism (27%), lost productivity at work (28%) and mortality costs (17%). (15)

DuPont, Dow, Federal Express, Xerox, and other major corporations reported reduced costs of 30 to 50% over one or two years after eliminating restrictive mental coverage limits. (16)

Because untreated or under-treated mental illness eventually becomes more costly to treat and has more serious and permanent consequences for workers, their families, and their employers.

Untreated mental health needs result in absenteeism, presenteeism (employees are at work but not unable to function productively), turnover, accidents, grievances, and impaired teamwork and leadership.