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Memorandum: Preliminary Analysis of Selected Mental Health Parity Legislative Options [i] (March 2002)

handle is hein.congrec/cbo9246 and id is 1 raw text is: MEMORANDUM To: Interested Parties From: Jennifer Bowman, Stuart Hagen, and Alexis Ahlstrom Re: Preliminary analysis of selected mental health parity legislative options Date: March 26, 2002 This memorandum presents a preliminary analysis of two questions regarding the effect on premiums for group health insurance of the mental health parity provisions in S. 543, the Mental Health Equitable Treatment Act. One question deals with the costs of S. 543 under an alternative assumption about the timing of the enactment of patients' rights legislation. The second question deals with the costs of S. 543 if it were modified in certain ways. Because this analysis has not gone through the formal review process and is not based on specific legislative language, the estimates are preliminary and subject to change. Effects on Premiums for Private Health Insurance. Estimates of the percentage impact on premiums for group health insurance presented here represent an average effect over the 2003-2012 time horizon, and are before any adjustment for the response of health plans, employers, and workers to the higher premiums under the bill. In addition, the estimates have been adjusted to take into consideration that many employers already comply with mental health parity laws enacted by a number of states. In our analysis, we assumed that the provisions of the Mental Health Parity Act of 1996, which were extended by Public Law 107-147, will expire on December 31, 2003. That act prohibits group health plans that provide both medical and surgical benefits and mental health benefits from imposing aggregate lifetime limits or annual limits for coverage of mental health benefits that are different from those used for medical and surgical benefits. The first question relates to the interaction of the provisions in S. 543 with those in the Bipartisan Patient Protection Act (S. 1052, as passed by the Senate). Previously, CBO estimated that S. 543, as ordered reported by the Senate Committee on Health, Education, Labor and Pensions on August 1, 2001, would increase premiums for group health insurance by an average of 0.9 percent. If the enactment of S. 1052 preceded consideration of S. 543, we estimate that S. 543 would increase premiums for group health insurance by an average of 1.1 percent, or approximately 0.2 percentage points more than the current estimate of S.543 inthe absence of5. 1052.

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