David R. Henderson  

Unintended Consequences of Mandated Mental Health Parity

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Members of the Screen Actors Guild recently read in their health plan's newsletter that, beginning in January, almost 12,000 of its participants will lose access to treatment for mental-health and substance-abuse issues.

The guild's health plan represents one of a small number of unions, employers and insurers that are scrapping such benefits for their enrollees because of a 2008 law that requires that mental-health and substance-abuse benefits, if offered, be as robust as medical or surgical benefits. By dropping such coverage, providers can circumvent the requirements.


This is from Russell Adams and Avery Johnson, "Law Prompts Some Health Plans To Cut Mental-Health Benefits," Wall Street Journal, December 23. The article doesn't mention this, but the law requiring "mental health parity" was the bailout bill in October 2008. At the time, health economist John Goodman criticized this law and I pointed out, as a commenter, that one of the few good things about the law is that it doesn't mandate mental health coverage. It simply says that if health-insurance plans cover mental health, they must have parity. I pointed out in a number of speeches after this that one of the consequences would be that some health-insurance plans would drop mental-health coverage altogether. As you can see from the above quote, some of them have.


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COMMENTS (3 to date)
John Goodman writes:

David, others are free to call the consequences "unintended." I prefer to remind everyone that "we told you so."

Arthur_500 writes:

I thought 'Death Panels' were ridiculed as nonsense. It turns out that every Insurance Company has one. It turns out that those who purchase insurance create their own 'death panel.' It turns out the Military Health Insurance has one.
Oh yeah, it turns out the new Health Bill has a Death Panel also.
I told you so...

Devon Herrick writes:

The trouble with mental health parity is there is no objective standard for what constitutes a mental condition. See http://www.ncpa.org/pub/ba410/

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