Senate Passes Landmark Mental Health Parity Bill

Supporters of mental health parity were handed a long-awaited victory earlier this month when the Senate passed an appropriations bill containing the Mental Health Equitable Treatment Act (S 543).

The parity measure was passed as an amendment to the Fiscal 2002 appropriations bill for the departments of Labor, Health and Human Services, and Education (HR 3061) in October. On November 6 the Senate approved the appropriations bill that contains the parity amendment.

The law also contains funding for the next fiscal year (October to October) for the National Institutes of Health and the Substance Abuse and Mental Health Services Administration (SAMHSA). The Senate approved a more generous increase for NIH than did the House, while the House approved a more generous increase for SAMHSA, which includes the Center for Mental Health Services. The differences will be worked out in conference this month.

The House version of the appropriations bill was approved last month, but conferees from both chambers are expected to iron out the differences in their respective bills this month.

The lead sponsors of the parity bill were Sens. Pete Domenici (R-N.M.), Paul Wellstone (D-Minn.), and Edward Kennedy (D-Mass.). The senators are long-time advocates of parity, and with their support, S 543 sailed through the Senate Health, Education, Labor, and Pensions Committee in late August (Psychiatric News, September 7). Meanwhile, no parity bill has made it out of committee in the House.

“APA congratulates Sens. Domenici, Wellstone, Kennedy, and other cosponsors of the landmark amendment for their tireless advocacy for mental health parity,” APA President Richard Harding, M.D., told Psychiatric News. “This is a giant leap toward ensuring that the mental health needs of all Americans cannot be ignored.”

The 2001 parity bill goes further than the 1996 parity law, which expired September 30. The earlier law barred only discriminatory annual and lifetime dollar limits in health plans that cover both “physical” and mental illnesses.

By contrast, while the new bill also applies only to plans that cover both “physical” and mental illnesses, it bars any limits on mental illness treatment and financial requirements that are not imposed on the treatment of other medical illnesses. That means that health plans must have the same limits on the frequency of treatment; number of visits or days covered; and the same deductibles, coinsurance amounts, copayments, and other cost-sharing requirements.

“The parity amendment. . . .will lessen health care costs in the long run,” APA Medical Director Steven Mirin, M.D., told Psychiatric News.

Despite the bill’s expansion of parity benefits, it also contains some significant limitations. For example, the bill allows mental health benefits to be managed through the application of medical-necessity criteria and utilization review. Mental illnesses are defined as all categories of mental health conditions listed in the current edition of the DSM but exclude substance abuse disorders.

Moreover, the bill exempts companies with 50 or fewer employees; the original version of S 543 had proposed lowering that figure to 25. Also, the bill’s cosponsors agreed to delay the bill’s effective date to 2003 rather than next year as also stipulated in the original version of S 543.

Domenici told colleagues who were concerned about the measure’s cost that the Congressional Budget Office (CBO) estimated that insurance premiums would not rise above 1 percent annually when the bill becomes effective, according to the October 30 Congressional Record.

Sen. Phil Gramm (R-Tex.), the only senator to oppose the parity amendment, said, “The CBO cost estimate of $23 billion over five years will be borne by the private sector that could have gone to create jobs, more growth, more opportunity.”

Kennedy countered that any extra costs would be offset by employees’ increased productivity. The National Institute of Mental Health estimates that the annual cost of untreated mental illness exceeds $300 billion annually primarily due to productivity losses of $150 billion, health care costs of $70 billion, and societal costs of $80 billion, according to the Congressional Record.

Wellstone added that companies in states with parity laws including Minnesota have not been forced to reduce or eliminate health care benefits, according to the Congressional Record.

Information on HR 3061 is available on the Thomas Web site at thomas.loc.gov by searching on “HR 3061.” ▪