New Jersey Public Advocate Ronald K. Chen
Testimony on Mental Health Parity
submitted to
Senate Health, Human Services, &
Senior Citizens Committee
Trenton, N.J.
January 24, 2008 

Senator Vitale, Senator Weinberg, and members of the Health, Human Services, & Senior Citizens Committee, thank you for allowing me to speak today regarding mental health parity. 

With my thanks to Senator Vitale, when New Jersey’s Legislature re-established the Department of the Public Advocate, my Department was charged with advocating on behalf of the public interest and ensuring government is accountable and responsive to the needs of average New Jerseyans. One of our primary mandates under state law is advocating on behalf of individuals with mental illness and disabilities to ensure they receive the help they need.  By speaking at this hearing, we are fulfilling our mandate by advocating for those who are affected by this disparity which views mental and physical health coverage differently.

The Department of the Public Advocate strongly supports enacting this parity bill that will help the citizens of New Jersey to get the health care that they need.

Our current law only requires coverage of biologically-based illnesses, which leaves a huge gap in coverage for thousands of New Jerseyans and discriminates against people with certain mental health conditions.  This law, in fact, was challenged for failing to provide coverage for people with autism, and the court decided in favor of the parents of a boy who required treatment for autism.  

This is not something the courts should be deciding, however. On a purely humane level, it is unconscionable to expect people to endure mental illness when these diseases can and must be treated. We must stop stigmatizing people who suffer from mental health and substance abuse conditions when research shows, undeniably, that such conditions can be helped with treatment. 

People who could benefit from early intervention and early treatment would receive assistance under the proposed parity legislation, because they would not have to wait until their illnesses became severe or disabling before coverage for their treatment was available.  Servicemen and women returning to New Jersey would not have to seek treatment at a veteran’s facility, but could receive treatment from their own provider, if their spouse had coverage. 

In 2007, our Department completed a study of the effect of parity coverage on health insurance costs nationally and in other states where parity has been enacted. The primary basis for opposition to parity laws is that they are too costly, so we wanted to take a look at the facts to see if they supported that position. They don’t.

As more states adopt parity laws, there is a growing body of data that demonstrates that if New Jersey moves to full parity, the cost increases will be small. Study after study shows that any small upfront premium increase will be more than offset by a decrease in medical costs because illnesses are caught earlier and treated properly.  The experiences of other states have also shown us that there will be cost decreases in some areas if parity is enacted.  There will be fewer unnecessary emergency room visits by people who have health insurance but not mental health insurance.  We also know that people who are treated for a mental health condition earlier and more aggressively are far more likely to have better treatment outcomes. 

In Texas, where a partial parity law was enacted in 1991 at the same time as managed care was adopted, there was a 48 percent decrease in the cost of mental health care within managed care plans. In 1997, the Texas Legislature enacted an even stronger parity law.

In 2001, the Congressional Budget Office estimated that the increased cost to employers as a result of full parity would be less than 1 percent. Studies of parity laws in Connecticut, Vermont and Minnesota have shown this to be true, and the most recent study of the Federal Employee Benefits plan shows an increase of only 0.1 percent since parity was enacted. There is nothing to indicate that New Jersey’s experience would be any different.

I believe that passing Senate Bill 607 is critically important to the citizens of New Jersey.  We are hopeful that the Senate will see the wisdom in voting to provide parity coverage, as they have in the past.  As former Governor Codey’s Mental Health Task Force concluded:

 “Mental health must be seen for what it is – a public health issue, no different than other medical disorders.  For New Jersey to reduce the burden of mental illness, to improve housing, to improve access to care and to achieve urgently needed public education about mental illnesses and mental health, stigma must no longer be tolerated…New Jersey should mandate full mental health parity for all state regulated plans.”

We should also keep in mind that, just as oral health affects a person’s overall health, good mental health is also integral to our physical well-being. People with mental illnesses are less likely to seek preventive care for physical ailments. When they do seek help, they may have a more difficult time accessing quality medical care. This adds up to increasing medical costs, and a citizenry that is in less than optimal health.

By requiring that insurance coverage for mental health be no less than the coverage of physical illnesses, the stigma surrounding mental illness will lessen.  Mental illnesses will be viewed for what they are   --- illnesses that can be treated successfully if diagnosed early and treated appropriately. Mental illness will no longer be seen as something to hide.

New Jersey’s citizens should be treated equally whether they have a physical or mental illness.  Legislation to correct this problem is long overdue.  The cost of providing this care is far less than the benefits that will accrue– healthy people, healthy families and a more productive workforce.

Again, thank you for allowing me to speak today.  If we can be of any assistance, we would welcome the opportunity to help.