A compromise that dropped mandated coverage for posttraumatic stress
disorder and alcohol and drug dependence allows a long-hoped-for parity law to
It took 20 years, but New Yorkers finally gained a mental health parity law
that met many long-sought goals.
The measure, said supporters, will save many families from the anguish of
surrendering custody of their children to the state because they are unable to
afford care for the children's serious mental health problems, despite having
health insurance coverage. The law is also expected to save millions of
dollars annually in lost productivity that stems from workers with untreated
“This is something New York state psychiatrists have been pushing to
achieve for years,” said Deborah Cross, M.D., president of the New York
State Psychiatric Association (NYSPA) and chair of APA's Committee on Public
She credited the eventual passage of the law to a “multiple-party
effort” by a coalition of mental health consumers, families, and
psychiatrists that kept pressure on legislators for many years.
The law, which took effect January 1, requires health insurers to provide
comparable insurance coverage for “biologically based” mental
illnesses as policies provide for other medical care.
The law requires health insurance plans to provide at least 30 days of
inpatient care annually and at least 20 days of treatment with a psychiatrist
or psychologist in a state-certified facility, a facility operated by the
State Office of Mental Health (OMH), or a group or academic practice.
The cost of premiums and deductibles must remain consistent with such fees
for other types of medical
Gov. George Pataki (R) congratulates supporters of mental health
insurance parity after signing New York state's first law mandating
comprehensive coverage this past December.
Photo courtesy of the office of Governor George Pataki
The law requires health insurance coverage for businesses with at least 50
employees to cover treatment for schizophrenia/psychotic disorders, major
depression, obsessive-compulsive disorders, bulimia, anorexia, serious cases
of attention-deficit disorders in children, disruptive disorders, and
pervasive developmental disorders.
Another component of the law mandates coverage for children with serious
suicidal symptoms or other life-threatening self-destructive behaviors,
significant psychotic symptoms, behavior caused by emotional disturbances that
place the child at risk of causing personal injury or significant property
damage, or behavior caused by emotional disturbances that place the child at
substantial risk of removal from the household.
Businesses with fewer than 50 employees must make the parity coverage
available for workers to purchase upon request.
The law seeks to offset additional costs to these workers by directing the
superintendent of the State Insurance Department to develop a program of state
funding to cover the additional premium costs for workers at smaller
New York psychiatrists maintained the law will significantly reduce the
problems that people with mental illness have affording the care they
“I think it's reasonable to assume that most individuals who needed
treatment for mental health disorders could not afford it before this because
their insurers didn't cover it, and they couldn't afford the out-of-pocket
cost,” Seth Stein, J.D., executive director of NYSPA, told
Fifty-three percent of New York's 19 million residents have
employer-sponsored insurance, and 4 percent are self-insured, according to
federal government data compiled in November 2006 by the Kaiser Family
The new parity measure, known as Timothy's Law, is named after a New York
boy whose parents had given up custody to the state because they were unable
to afford treatment for his depression. The boy committed suicide at age
Although the New York State Assembly had passed a full parity measure in
several consecutive years, opponents held up its progress in the state Senate
due to concerns that it would impose huge costs on businesses, insurers, and
policyholders. One of the main opponents, the Business Council of New York,
dropped its long-standing opposition to the bill late in the last legislative
session after a compromise amendment was added to remove coverage mandates for
posttraumatic stress disorder and drug and alcohol addiction treatment. Other
business groups continued to fight the measure.
The cost of the final measure is not yet known but estimates varied from a
few million dollars to $60 million, or an increase in insurance premiums of
between 3 percent and 10 percent.
Supporters of the new law noted that multiple studies, including one on a
parity mandate for federal workers (Psychiatric News, September 15,
2005), have found that parity laws do not have a high cost. That study,
sponsored by the Department of Health and Human Services, found that the
federal parity mandate, which was implemented in 2001, did not significantly
increase the use of mental health services under the Federal Employee Health
Benefits program, but did lead to significant reductions in out-of-pocket
spending for many government workers and retirees.
The study did not assess whether any increased costs were passed on to
other subscribers, but the lead author estimated any increased premium costs
were likely less than .5 percent.
Although parity supporters consider the New York measure a huge success,
many remain adamant that future legislation add a coverage requirement for
posttraumatic stress disorder and drug and alcohol addiction treatment.
“We view this law as a substantial beachhead, and now we're going to
push for true parity,” Stein said.
Supporters may have a chance to expand the law when it comes up for renewal
by the legislature in 2009. If the legislature does not renew it, the law will
expire three years after enactment. The law also requires state health
officials to study its costs and financial and health impacts to provide the
facts upon which legislators can base their future parity actions.