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Medicare And Mental Health ParitySince Medicare’s founding in 1965, mental health care users have not experienced parity. Beneficiaries have paid a 50 percent copayment for Part B outpatient mental health services but 20 percent for physical health care. The Medicare Improvements for Patients and Providers Act of 2008 has addressed this inequity. Incrementally, the mental health copayment will decrease to 20 percent by 2014. In 2002, about 14.2 percent of Medicare claimants were mental health or substance abuse claimants. Approximately 22 percent of people with serious mental illnesses receive Medicare benefits. The Medicare outpatient benefit distorted use in ways that are fiscally inefficient and clinically inappropriate. Data show that beneficiaries with mental health needs were more likely to receive inpatient than outpatient care because fewer patient resources were required. Thus, Medicare spent more per user, and had a larger percentage of users who received inpatient care, than did Medicaid. The reverse was true for outpatient care. Using projections with no offsets, the Congressional Budget Office expects an increase in the costs to Medicare resulting from this change. However, studies have shown that improvements in mental health decrease costs for physical health care. Other cost offsets and improved cost-effectiveness can also be expected as people use more suitable outpatient care. Some associated moral hazard may occur. This can be addressed by using improved "medical necessity" criteria that permit initial access and ensuing determination of need by qualified providers. With the advent of national health reform and the medical home model, Medicare will be able to design and finance more effective integrated systems for mental and physical illness, a high need for this population. This letter acknowledges the progress made toward a consistent national policy of mental health care coverage and urgently calls for more research on the effects of Medicare parity.
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