Mental Health Parity ActEmployers' Mental Health Benefits Remain Limited Despite New Federal Standards Gao ID: T-HEHS-00-113 May 18, 2000
GAO surveyed employers in the 26 states and the District of Columbia that did not have state laws that were more comprehensive than the federal Mental Health Parity Act as of July 1999. Eighty-six percent of the responding employers reported that as of December 1999 their plans complied with the federal parity requirement that annual and lifetime dollar limits for mental health benefits be no more restrictive than those for all medical and surgical benefits. Fourteen percent of plans were noncompliant; in 1996, before the parity law was enacted, only about 55 percent reported offering parity in dollar limits. Although most employers' plans now have parity in dollar limits for mental health coverage, 87 percent of those that comply contain at least one other plan feature that is more restrictive for mental health benefits than for medical and surgical benefits. For example, about 65 percent of the plans restrict the number of covered outpatient office visits and hospital days for mental health treatment more than those for other health treatment. In addition, many employers may have adopted newly restrictive mental health benefit design features since 1996, specifically to offset the more generous dollar limits they adopted as a result of the federal law. About two-thirds of these newly compliant employers changed at least one other mental health benefit design feature to a more restrictive one compared with only about one-fourth of the employers that did not change their dollar limits. The law appears to have had a negligible effect on claims costs. Federal agencies have made varying progress in performing their oversight roles under the parity law. The Department of Labor is in the process of expanding its oversight role. The Health Care Financing Administration has not yet fully determined the nature and the extent of its oversight responsibilities. This testimony summarizes the May 2000 report, GAO/HEHS-00-95.
GAO noted that: (1) most, but not all, employers that GAO surveyed reported that they comply with the law by having parity in mental health and medical and surgical annual and lifetime dollar limits; (2) among the 863 employers responding to the GAO's survey that offered mental health benefits in the 26 states and the District of Columbia with laws no more comprehensive than the federal law, the percentage reporting parity in dollar limits grew from 55 percent in 1996, before the law went into effect, to 86 percent in 1999; (3) however, most of these newly compliant employers reported that they also made changes to make their plans more restrictive in the number of hospital days or outpatient visits covered for mental health than for other medical and surgical benefits; (4) very few employers reported that the law resulted in higher claims costs; (5) the Mental Health Parity Act and other recent federal health insurance standards have expanded DOL's role in regulating health benefits and have created a regulatory role for the Health Care Financing Administration (HCFA) that entails federal enforcement of the law when states do not adopt conforming insurance regulations; and (6) while HCFA has begun to review state conformance, it has not completely determined the full extent of its required oversight role or specific time periods for making this determination.