Friday, September 14, 2007

H.R. 1424 - Wellstone Mental Health & Addiction Equity Act of 2007

Here is the Congressional Budget Office's analysis of what the costs will be. Some highlights...

H.R. 1424 would prohibit group health plans and group health insurance issuers that provide
both medical and surgical benefits and mental health benefits from imposing treatment
limitations or financial requirements for coverage of mental health benefits (including
benefits for substance abuse treatment) that are different from those used for medical and
surgical benefits.

Enacting the bill would affect both federal revenues and direct spending for Medicaid,
beginning in 2008. The bill would result in higher premiums for employer-sponsored health
benefits. Higher premiums, in turn, would result in more of an employee's compensation
being received in the form of nontaxable employer-paid premiums, and less in the form of
taxable wages. As a result of this shift, federal income and payroll tax revenues would
decline. The Congressional Budget Office estimates that the proposal would reduce federal
tax revenues by $1.1 billion over the 2008-2012 period and by $3.1 billion over the 2008-
2017 period. Social Security payroll taxes, which are off-budget, would account for about
35 percent of those totals.

The bill's requirements for issuers of group health insurance would apply to managed care
plans in the Medicaid program. CBO estimates that enacting H.R. 1424 would increase
federal direct spending for Medicaid by $310 million over the 2008-2012 period and by
$820 million over the 2008-2017 period. In addition, assuming appropriation of the
necessary amounts, CBO estimates that implementing H.R. 1424 would have discretionary
costs of $20 million in 2008, $143 million over the 2008-2012 period, and $322 million over
the 2008-2017 period.
. . .
Under current law, the Mental Health Parity Act of 1996 requires a more-limited
form of parity between mental health and medical and surgical coverage. That mandate is
set to expire at the end of 2007. Thus, H.R. 1424 would both extend and expand the existing
mandate requiring mental health parity. CBO estimates that the direct costs of the private-
sector mandate in the bill would total about $1.3 billion in 2008, and would grow in later
years. That amount would significantly exceed the annual threshold established by UMRA
($131 million in 2007, adjusted for inflation) in each of the years that the mandate would be
in effect.

Their analysis does not appear to take into effect the increased tax revenue resulting from increased wages and productivity from improved mental health treatment, nor does it seem to reflect the reduction in state and federal payments for uninsured individuals resulting from folks reaching their current discriminatory maximums. This analysis seems a little incomplete, judging from the summary.


Dinah said...

nor does it take into account all the money to be made on Google ads.

toni said...

I wonder if this analysis considers the budget of the Veterans Administration which has stepped up its mental health programs in recent years.

Earlier this year the VA released an initiative for suicide prevention, , which states

"VA is one of the largest integrated health systems in the world, and the largest provider
of mental health care. Although the demography is changing as the number of women veterans increases, veterans in general are fairly representative of the overall U.S. male population. However, only a small proportion of veterans seek care from VA. As a whole, those veterans who do seek care through VA are poorer and sicker than the general population of veterans."

So as more veterans of the Iraq War return home, most wll not use the VA system, placing more of a burden on the general health care system. But the price of both systems is a burden to all taxpayers eventually. Also note that the current proposal is to cut the VA budget for each of the next two years.

I am a fairly new mental health patient of the VA system and during my three admissions to two different inpatient facilities I observed that all beds were almost always occupied.

One more note: It is good to see that the issues which Paul Wellstone cared deeply about are still on the radar.

(I hope that I entered the link to the VA Report properly)

FooFoo5 said...

Not to be overtly political, the president having just spoken this previously evening, but are we not spending the entire projected cost of H.R. 1424 in a single week, every week, in Iraq?

ClinkShrink said...

Regarding: "Their analysis does not appear to take into effect the increased tax revenue resulting from increased wages and productivity from improved mental health treatment"

That kind of analysis would be awfully tough to do, it seems to me. You'd have to make predictions on what percentage of people were not permanently disabled (treatment refractory), what their potential 'productivity ceiling' is (potential earnings) as well as the likelihood of relapse even with treatment. Too many variables relying on to many hypotheticals.

Alison Cummins said...

I thought that one of the prime purposes of universal education and health care was to ensure that the body of the nation was educated and healthy. Because we *prefer* having healthy, educated neighbours and taxpayers and employees and children. Because life is just so much more fun and prosperous that way.

In my own case I went from years of un- and under-employment to steady, well-paid work within a year of the province bringing in universal drug insurance. Once I could afford Zoloft I could start taking it. Once I started taking it I could get work with private insurance, not just relieving the private program but also paying great wads of taxes. Which up to now I have been thrilled to pay every year because I love being a taxpayer. Much better than being close to homeless, as I was before public drug insurance became available. But I have succumbed to the inevitable corruption of money, because I have bought a house and income property and have more expenses and pay more taxes and I'm starting to squeak just a tiny little bit.

But I still feel privileged. And so relieved to have universal public health care that will pay for my psych drugs.

(Right, this is called enlightened self-interest. Where the self in this case is the public purse.)

Anyway, I am one of very very many. Anecdotally, my mental health has been a terrific investment on the part of my government. Enormous ROI.

No idea what it comes out to when you look at everyone though.

Roy said...

We've made $5.23 so far on the Google ads, fyi.

Toni, thanks for the link (here it is clickable). You make a good point that to the extent that squeezing the VA budget may spill over into the public psychiatry sector, taxpayers are still footing the bill. But, the money is spent most efficiently when there are no barriers to getting access (not a bunch of hoops and arbitrary rules).

Foo, it's disgusting that we'd be so willing to spend that money there, but it's like pulling teeth to get much small sums spent on education and healthcare here at home.

Clink and Alison, there are rough figures that could be plugged in to guesstimate these savings. And yes, the ROI is terrific, as long as you are working and effective treatment makes you more productive. If you are disabled in the first place, there are still some savings to be realized in some populations be reducing unncessary somatic care expenses.