How is mental illness insurance parity an increase in federal spending?
The Congressional Budget Office (CBO) projects that enhanced coverage for mental illness and substance abuse treatment will result in insurance premiums increasing (on average) a miniscule 0.4%. This will in turn result in lost revenue to the Treasury as employer paid insurance premiums are not counted as taxable income. In addition, certain health care expenditures that are now excluded from coverage (e.g., because mental illness coverage is unfairly capped or limited) are now paid for with after tax dollars. With parity level coverage (and no arbitrary numerical limits on inpatient days or outpatient visits), many of these expenditures will no longer be counted as taxable income. In addition, the bill would require private health plans that contract with Medicaid and SCHIP to meet a standard of parity, thereby increasing spending for these programs. The amount of the lost revenue and spending is relatively small in the scope of the overall federal budget — $1.1 billion over 5 years
