National Alliance on Mental Illness
page printed from
(800) 950-NAMI;

Special Report to Congress Finds Cost of Ending Discrimination Against Serious Mental Illness Negligible


Statement by Laurie M. Flynn, Executive Director
National Alliance for the Mentally Ill (NAMI)

Contact: Melissa Saunders Katz (703) 516-7963
Mary G. Rappaport (703) 312-7886
April 29, 1997

Washington, DC -- Last year, in a landmark, bipartisan effort, a bold step was taken by Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN) to pass federal parity legislation that moves the country closer to ending health insurance discrimination against persons with severe mental illnesses.

The nay-sayers contend that giving people with serious brain disorders insurance coverage equal to that provided to those with other physical illnesses would trigger skyrocketing costs and exorbitant premium increases. This is not true.

The National Advisory Mental Health Council's interim report on parity costs, which is being released today, lays to rest we hope for good the cost-scare tactics used by parity opponents. The report, Parity in Coverage of Mental Health Services in an Era of Managed Care, finds that "the introduction of parity in combination with managed care results in lowered costs and lower premiums (or, at most, very modest cost increases) within the first year of parity implementation."

For the 140,000 NAMI members, who have been leading the fight for insurance parity across the country, the report documents three particularly significant findings:

1. Insurance discrimination against severe mental illnesses is on the increase. From 1981 to 1993, inpatient mental health care coverage for U.S. employees, equal to that provided for other illnesses, dropped from 58 to 16 percent.

2. States that are implementing health insurance parity are noting little to no cost implications.

  • Texas experienced a 47.9 percent decrease in the cost of care for state employees enrolled in its managed care plan
  • Rhode Island reported a less than 1 percent (0.33 percent) increase of total plan costs
  • Maryland reported a 0.2 percent decrease after the implementation of full parity

3. Parity cost experience is inexorably linked to the rapidly changing health care system, including the emergence of managed care. That managed care is holding down costs speaks not only to the introduction of cost controls, but also reflects changing practice patterns that demonstrate a reduced reliance on hospital stays and a greater dependence on outpatient, community-based care for individuals with mental illnesses.

As part of its national Campaign to End Discrimination, NAMI is working in more than 30 states to end unfair insurance practices, an effort that is beginning to produce significant legislative successes. However, the business community continues to alarm legislators with unfounded assertions of unmanageable costs.

Science has proven that mental illnesses are physical disorders of the brain. Treatment has demonstrated that medical intervention is effective. Now, evidence is mounting that parity is affordable. In light of these facts, we call on the business community to do the right thing.

The Council's interim report underscores the need to move from the question of cost to issues of access and quality of care for our loved ones. I have a particular interest in the results of this report, not only in my role as NAMI's executive director, but also as chair of the board of trustees of the Foundation for Accountability, a national organization which seeks to promote quality in managed care that is patient and outcome oriented.

I want to take this opportunity to thank the National Advisory Mental Health Council for bringing this important document forward at a time of rapid change in the health care system and look forward to its final report.

NAMI is the nation's largest grassroots organization solely dedicated to improving the lives of persons with severe mental illnesses, including schizophrenia, bipolar disorder (manic-depressive illness), major depression, and anxiety disorders. NAMI has more than 140,000 individual members and 1,140 state and local affiliates in all 50 states, the District of Columbia, Puerto Rico, and Canada. NAMI's efforts focus on support to persons with serious brain disorders and to their families; advocacy for nondiscriminatory and equitable federal and state policies; research into the causes, symptoms, and treatments for brain disorders; and education to eliminate the pervasive stigma toward severe mental illnesses.