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.