New Law Provides Parity for Mental Health, Addiction Services

Millions of Americans are expected to benefit from a new mental health and addiction services parity law included as part of a $700 billion economic bailout legislative package enacted in early October.

The law, known as the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, or H.R. 1424, does not require businesses to cover mental health and addiction services. However, if a business with 51 or more employees offers coverage for mental health services, it is required to provide the same level of deductibles, copayments, out-of-pocket expenses, co-insurance, covered hospital stays and covered outpatient visits for mental health services and addiction services as it does for physical ailments, said Hannah Vanderbush, deputy press secretary for Sen. Pete Domenici, R-N.M., a chief sponsor of the legislation. The law does not apply to businesses with fewer than 51 employees.

The new law will result in mental health and addiction services parity for about 113 million Americans, according to a fact sheet released by Domenici. The measure builds on a 1996 mental health parity law that provided partial coverage for annual and lifetime limits.

Kevin Burke, director of the AAFP Division of Government Relations, described the newly enacted legislation as a "long needed incremental improvement in health insurance coverage," one that will allow physicians to more appropriately bill for mental health and addiction services. In many cases, family physicians are the first to diagnose and treat many mental health and substance abuse disorders. Without coverage, patients are less likely to seek treatment for mental health and substance abuse disorders, and physicians are less likely to bill for those services, Burke said. That situation, he added, should change as a result of this new law.

"Physicians will be able to treat these patients without worrying so much about the financial implications for their patients," Burke said. "The patients themselves will be more likely to seek treatment."

Domenici, in a joint statement with other sponsors of the legislation, said, "We are ushering in a new era of health care for those with mental illnesses. No longer will we allow mental health to be treated as a stepchild in the health care system. If you have insurance, then your mental health care must be equal to the benefits you get for any other disease."

Sen. Edward Kennedy, D-Mass., another chief sponsor of the measure, said in the statement that the "mental health parity legislation will make a huge difference for the one in five Americans facing mental illness."