March 20, 2007

U.S. Senate Bill 558: Mental Health Parity Act of 2007

The Congressional Budget Office (CBO) analysis of the Mental Health Parity Act of 2007 calculates the bill's possible impact on Medicaid spending. If passed, the legislation would raise some state, local, and tribal government employee health insurance premiums. However, the higher costs would not come from government, but from their private insurers who would pass on increased costs of coverage. CBO estimates that the direct costs of  the private-sector mandate in the bill would total $1.5 billion in 2009 and that the direct costs would rise each year the mandate would be in effect. The bill's requirements for issuers of group health insurance would apply to managed care plans in the Medicaid program. CBO estimates that enacting Senate Bill 558 would increase federal direct spending for Medicaid by $280 million over the 2009-2012 period and by $790 million over the 2009-2017 period.