In the case of parity for substance abuse, the costs would almost certainly tip that balance and result in declining overall coverage. In a voluntary marketplace for health coverage, the consumer is the driving force behind change and innovation. Adding benefit mandates, whether at the federal or state level, will add to the cost of coverage. Each group, no matter how well intended, that advances one level of benefits may fail to see the effects of its advocacy for extended coverage as it relates to the efforts of other groups. Mandates can impose significant burdens on health insurance carriers and drive up costs for consumers.
Several benefits are particularly expensive.
A 1998 study by William Custer, Ph.D, showed that people living in states with mandated mental health coverage were nearly 6 percent more likely to be uninsured than people in states without this mandated benefit. Copies of both the Jensen-Morrisey study and the Custer study are attached to my testimony and I would like to ask that they be made part of the record. It is important to note that mandates also can affect health care plans differently depending on their organizational structure. In a tightly controlled managed care setting, such as an HMO, substance abuse parity would be subject to utilization review mechanisms that would allow for appropriate treatments after application of clinical guidelines to the patient's care. Yet, in the current legislative debate, cost containment features of many managed care plans have been under criticism.