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Volume 12 Number 56 News: Mental Health Atlanta, GA - The proposed Mental Health Parity Act of 2007 (S. 558) would reduce federal tax revenues by $1 billion from 2009-2012 and by $3 billion from 2009-2017, according to a cost estimate released March 20 by the Congressional Budget Office. Reduced Social Security payroll taxes, which are not part of the budget, would account for about 35 percent of those totals, CBO said. S. 558, approved by the Senate Health, Education, Labor, and Pensions Committee Feb. 14 (No. 31 HCDR 2/15/07), would prohibit group health plans and group health insurance issuers that provide both medical and surgical benefits and mental health benefits from imposing treatment limitations, or imposing financial requirements for coverage of mental health benefits, that are different from those used for medical and surgical benefits. CBO said the bill would affect both federal revenues and direct spending for Medicaid, beginning in 2009. "The bill would result in higher premiums for employer-sponsored health benefits," CBO said. "Higher premiums, in turn, would result in more of an employee's compensation being received in the form of nontaxable employer-paid premiums, and less in the form of taxable wages. As a result of this shift, federal income and payroll tax revenues would decline," the agency added. The bill's requirements for issuers of group health insurance would apply to managed care plans in the Medicaid program, CBO said. "CBO estimates that enacting S. 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," the report said. The agency also estimated that implementing S. 558 would have discretionary costs of $20 million in 2008, $143 million from 2008 to 2012, and $322 million from 2008-2017. The complete CBO cost estimate is available.
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