NIH Press Advisory
National Institute of Mental Health

Tuesday, November 11, 1997
4:00 PM Eastern Time
Rayford Kytle
(301) 443-4536

Study Shows Low Costs Of Improving
Mental Health Care Coverage Under Managed Care

Removing the typical, $25,000 limit on mental health benefits raises group health insurance costs under managed care only by about one dollar per enrollee per year, according to a National Institute of Mental Health-funded study, published in the November 12 issue of the Journal of the American Medical Association.

Steven E. Hyman, M.D., NIMH Director, said, "This research informs the debate over how much it would cost under the Mental Health Parity Act to provide insurance coverage for treatment of mental illnesses that is equal to that for other medical conditions."

The new study, conducted by Roland Sturm, Ph.D., at RAND, Santa Monica, CA., examined claims data for 1995 and 1996 from 24 managed care "carve out" health plans, which provided mental health care through a subsidiary or an independent vendor. Sturm found that substituting unlimited mental health coverage for even the least generous plans - those paying for only 30 inpatient days and 20 outpatient sessions -- would mean a less than seven dollar per enrollee per year cost increase in a plan with minimal co-payments and no deductibles. This is less than half of one percent of the annual cost per enrollee of an average managed care plan ($1500-$2000). The Mental Health Parity Act, which President Clinton signed last year and is scheduled to go into effect January 1, states that if employers choose to offer mental health benefits, they cannot provide lower dollar limits for them than they do for other medical benefits unless they can show that their health plan costs would be increased by 1 percent or more.

For further information, please contact the NIMH Office of Scientific Information at (301) 443-4536 or Jess Cook at RAND (310) 393-0411 X6228.

NIMH is one of the eighteen institutes that make up the National Institutes of Health, part of the U.S. Department of Health and Human Services.