WISCONSIN UNITED
for MENTAL HEALTH

What is mental health parity?

“Parity” refers to the effort to treat mental health financing on the same basis as financing for general health services. In recent years advocates have repeatedly tried to expand mental health coverage—in the face of cost-containment policies that have been widespread since the 1980s. Parity legislation is an effort to address at once both the adverse selection problem and the fairness problem associated with moral hazard. The fundamental motivation behind parity legislation is the desire to cover mental illness on the same basis as somatic illness, that is, to cover mental illness fairly. A parity mandate requires all insurers in a market to offer the same coverage, equivalent to the coverage for all other disorders.  ... evidence of the effects of parity laws shows that their costs are minimal.