There are a lot of reasons to support health care reform and the inclusion of mental health treatment in that reform. I personally support it because I think health care (including mental health care) should be a basic human right of every human being and believe our government has a moral and humanitarian obligation to provide it to everyone.
But for those not convinced by that argument, there are some strong economic arguments for providing access to mental health coverage. First, evidence shows that overall health costs decrease when mental health care is covered. Second, tax dollars spent on mental health care tend to save tax dollars in other areas, including law enforcement, jails and prisons, homeless services, and emergency room visits – so spending money on mental health services saves money in other areas.
It’s clear that increased mental health coverage would result in increased usage of mental health services. A study by RAND in the 1980s found that decreased out-of-pocket costs for consumers significantly increased usage of outpatient mental health services, much more of an increase than demand for ambulatory health services. Even with this increased demand for services, though, overall costs are reduced, because an increase in mental health spending “yields concomitant decreases in total health expenditures and employee absences.” A study of an individual employer-based insurance policy found that the savings from decreasing coverage of mental health were entirely canceled out by increased physical health costs. Additionally, untreated behavioral health problems create significant costs for employers in terms of short-term disability absences. So even though increased mental health coverage would result in increased demand for and spending on mental health services, overall health coverage costs would stay the same or decrease due to the benefits of the mental health treatment. (See SAMHSA for citations)
Additionally, the effect of mental health coverage in reducing city and state expenditures on services such as law enforcement, jails, and homeless services is well established. After California expanded community mental health services through a ballot proposition, counties reported dramatically reduced use of emergency room visits for mental health issues. Transitional age youth (18-25) provided with mental health coverage achieved a 76% reduction in days homeless and a 49% reduction in days hospitalized. Adult participants achieved an 89% reduction in days spent homeless and about a 40% decrease in incarceration. These effects significantly reduce expenditures by cities and counties to treat the symptoms and consequences of untreated mental health disabilities – while at the same time allowing individuals to live their life without risk of homelessness or incarceration due to their disabilities.
Again, I would support expanded coverage of mental health services even if there were a cost associated with it. But because we can provide these services while saving money spent on physical health care and reduce the need for emergency rooms, homeless shelters, and jails to be primary mental health providers, there’s a very strong economic argument that we need to provide this coverage.