What is Parity?

What is Parity?

"Parity" is the treatment of substance abuse and mental illness in insurance benefits that are no more restrictive than benefits for medical and physical conditions. In other words, benefits can not be offered with artificial and arbitrary limits on services, or arbitrary or artificial copays, deductibles, and co-insurance caps.

Parity in Wisconsin

Existing law in Wisconsin requires any group health insurance policy that provides inpatient or outpatient hospital services to cover mental health and substance abuse treatment at a minimum of $7,000, or the equivalent benefits measured in services, per year. These artificial limits were established in 1986 when $7,000 covered the cost of approximately 30 days of inpatient treatment. In present dollar terms, such treatment caps are woefully inadequate to provide effective treatment for those persons living with mental illness or substance abuse disorders.

The Wellstone-Domenici Act

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343) is a federal law passed in October 2008 that applies to group health plans offered by employers of 51 or more employees. It does not mandate that such businesses provide mental health and substance abuse coverage as part of their group health plan coverage. However, if a plan does provide either mental health or substance abuse coverage, then the treatment limitations and financial requirements of such coverage must be no more restrictive than those applied to the plan’s medical and surgical coverage. This is called “parity.”

Small employers with 50 or fewer employees and individual health plans are exempt from the Act’s provisions. For more than 700,000 Wisconsin residents, the Wellstone- Domenici Act offers no protection.

The Wellstone-Domenici Act will improve insurance coverage and treatment for many people facing mental health and substance abuse issues. Yet, many others whose lives are disrupted by addiction and mental health challenges remain without adequate insurance coverage. In too many cases, those in need forego treatment simply because they are unable to afford it.

The Wisconsin Parity Act

The Wisconsin Mental Health and Substance Abuse Parity Act ( AB-512 / LRB-3614/1), co-sponsored by Rep. Sandy Pasch (D-Whitefish Bay) and Sen. Dave Hansen (D-Green Bay), will require all group health plans in Wisconsin to provide mental health and substance abuse disorder benefits at parity levels with other conditions covered by the plans, increasing treatment and financial benefits for hundreds of thousands of people in Wisconsin. While such coverage is not required for individual plans, if mental health or substance abuse benefits are included in the individual plan coverage, then they must be offered at parity.

The Wisconsin Parity Act will close the gap in coverage for more than 700,000 Wisconsinites who work for small employers of 50 or less employees exempted from the provisions of the Wellstone-Domenici Act.

Issues Beyond Parity

In December 2009 Kathleen Sebelius, Secretary of the United States Department of Health and Human Services, HHS Secretary addressed members of Maryland's mental health care community, noting:

"Given the high price we pay for these gaps in care, the Mental Health and Addiction Equity Act, which Congress passed last year and which will soon go into effect, is a huge step forward. . . . Thanks to parity, millions of Americans with mental illness and substance abuse disorders will get the care they need.  It’s going to help people afford their medicines.  It’s going to make them less likely to put off important care. 

. . .

That said, we need to understand what we mean when we say parity. What we’re really talking about is 'parity in reimbursement by private health insurance plans that cover mental health and substance abuse services.' That’s significant, but it’s just a starting point. A broader definition of parity would encompass investments in prevention, investments in health care delivery reform, investments in support services like housing that can affect behavioral health outcomes, and investments in treatment and service system research. And it’s this fuller version of parity that we should be striving for."

Read her rull remarks here.

Moving beyond Making Parity Real media

Milwaukee (Nov. 23, 2009)

Green Bay (Jan. 15, 2010)

Learn more:

Milwaukee Addiction Treatment Initiative | Mental Health Policy Initiative