The Costs of Insuring Mental Illness in Kansas on a Basis of Parity with Physical Illness: A Brief Review

Abstract

The Kansas legislature is presently considering legislation proposed by the Kansas Alliance for the Mentally Ill (KAMI) which would mandate health insurance coverage for certain listed mental illnesses on a basis of parity with physical illnesses.1 The mental illnesses covered by the proposed legislation are believed by medical scientists to have a biological or physical basis. The purposes of this legislation are to improve the quality, quantity, and timeliness of treatment provided for severe mental illness; to relieve some of the severe financial impacts of mental illness on affected households; and to remove some inequities in the provision of medical care.

Several other states have enacted similar legislation. Maine, New Hampshire, and Rhode Island mandate parity in coverage for biologically-based mental illnesses. Maryland and Minnesota mandate parity for all mental disorders, including substance abuse, minor disorders, and disorders not known to be biologically based. Texas has required nondiscriminatory coverage of severe mental illness for state employees.

This report reviews the KID study as well as several other studies and reports that are relevant to the premium increases likely to be caused by the mandate. This report also provides a less comprehensive review of costs of the mandate other than premium costs. The individual studies under review are listed in the bibliography. The review begins with a discussion of some important background issues. Next it discusses limitations of the KID survey and compares it with other similar studies. It also reviews some studies of a more general nature and then draws some conclusions.