Congress Passes Mental Health Parity and Addiction Equity Act of 2008 as Part of Federal Bailout Package

October 6, 2008

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The United States Congress has acted on another of the American Academy of Neurology Professional Association's top priorities for 2008 by passing The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which was included as part of the recently passed Emergency Economic Stabilization Act of 2008. This new legislation builds on a 1996 Mental Health Parity Law by requiring health insurance plans that offer mental health coverage to provide that same coverage on par with financial and treatment coverage offered for other physical illnesses.

Developed in talks between the Academy and other mental health, insurance and business organizations, this new law will improve coverage for 113 million Americans. The Wellstone-Domenici Act expands parity by including deductibles, co-payments, out-of-pocket expenses, coinsurance, covered hospital days and covered out-patient visits. It also includes a small business exemption for companies with fewer than 50 employees, as well as a cost exemption for all businesses.

Senate and House leaders had struggled to bring the parity measure to the floor because leaders needed to identify a "pay-for" to offset the impact of implementing parity on federal revenues (estimated by the Congressional Budget Office to cost $3.8 billion over 10 years). A pay-for had been necessary due to Congress's pay-as-you-go rules, which require legislation with fiscal implications to include either increases in revenues or decreases in spending to remain budget neutral. The final bill included offsets that allows this long-standing Academy priority to become law.