January 1, 1999

Although several studies about the price of parity have been done at the national level, the first known state-level parity study was completed only this fall. The Pennsylvania Psychiatric Society (PPS), frustrated in its efforts to promote mental health insurance parity, commissioned a report to address concerns expressed by its opponents.

The report, titled "The Effects of Pennsylvania's Mental Health Parity Legislation: An Analysis of the Impact on the Number of Uninsured," was conducted by PricewaterhouseCoopers and released in September. The report found "only a minimal impact" on the number of uninsured if parity legislation were to be enacted. PricewaterhouseCoopers estimates that, on the basis of on an expected increase in premiums of 3.1 percent, the number of uninsured in Pennsylvania would increase by about 11,000 (from about 1.2 million to 1.211 million). Thus, the percentage of uninsured people in Pennsylvania would increase from 11.7 percent to 11.8 percent of its total population. Estimates in the report are based on a 1996 Congressional Budget Office estimate that 200,000 individuals nationwide would lose employer-sponsored insurance for every 1 percent increase in health insurance premiums resulting from federal mental health parity legislation.

The report also details options for employers for dealing with the cost of increased mental health benefits and says that it is possible that even fewer than .1 percent of Pennsylvanians may lose insurance.

The main argument against parity has been that too many people will lose all insurance, said Gwen Yackee Lehman, executive director of PPS. "That became a more important point for us than cost per se. It would be a bad thing for people to lose their insurance, and we felt we had to respond to that argument. We have tried all along to only argue from facts, and we got the facts," she said.

The Pennsylvania Psychiatric Society sent the report to Pennsylvania's Department of Insurance and Department of Public Welfare, as well as to some legislators, and hopes that it will have an impact on policy.

Last year a weak parity bill made it through the Pennsylvania House but was rejected by the Senate. Some of the local senators told PPS that parity would need the governor's support before it would pass. PPS worked with the Alliance for the Mentally Ill and the Mental Health Association, and these groups eventually met with the governor. After learning that the governor and his administration would welcome more information about parity and its possible effects on insurance coverage, the advocates met with the Department of Public Welfare and the Department of Insurance and provided them with research data.

Staff from both departments also met with the business community and expressed concerns about the cost of insurance going up and the possibility that some businesses would drop health care coverage for their employees.

"Our opponents kept quoting a study by the Lewin Group estimating that every 1 percent increase in premiums results in an increase of 400,000 uninsured lives," said Lehman. These are figures for the entire country, she added, and the Congressional Budget Office more recently came up with a figure half that amount.

In the November legislative session, the Pennsylvania legislature voted in favor of commissioning a state-funded study to provide more data about the effects of parity on health care coverage.

This recent decision shows that the PricewaterhouseCoopers study had some impact, said Sheila Judge, M.D., PPS president. It showed legislators that hard data can be obtained and used to inform decisions, she said. "It produced a new element of reasonableness. This is a start."