Parity Supporters Hopeful, but Money Still Obstacle

Mental health advocates and congressional parity backers are gathering their strength to push for passage of a mental health insurance parity compromise before the current Congress ends. Their chief obstacle: money.

Senate and House negotiators finished the major work on a compromise parity measure in June, although bill writers have continued to tweak some of the provisions.

Both parity measures would require insurance plans that offer mental health benefits to make them equal in the cost of copayments and deductibles as well as the number of covered doctor visits or days in the hospital to the plans' other medical benefits.

The final compromise measure includes much of the language from the less-comprehensive Senate version but also “surprising” acceptance of some provisions of the more-generous House bill, according to lobbyists who asked not to be named because of their involvement in crafting the bills.

The compromise legislation was considered briefly by the Senate after it was folded into a large tax package (S 3335) before Congress adjourned for its August recess, but it failed to pass due to a partisan fight over whether to bring unrelated energy legislation up for a vote. Senate supporters are expected to repeat their push for the measure after funding offsets for the bill's $3.8 billion, 10-year cost are identified.

“We remain hopeful that this most important part of APA's legislative agenda will be signed into law before Congress adjourns,” said Nicholas Meyers, director of APA's Department of Government Relations.

The final compromise addresses areas of contention that had initially resulted in the House and Senate passing bills (HR 1424 and S 558) that greatly expanded federal parity mandates but differed on important specifics.

The compromise dropped some provisions of the House bill, which was described by parity advocates as the more generous version, including a provision barring the federal law's preemption of stronger parity laws. Instead, the compromise defers to the state preemption standard used by the Health Insurance Portability and Accountability Act (HIPAA), which preempts only state laws that “prevent the application” of the federal law.

The compromise also dropped the House bill's requirement that all insurance plans provide parity coverage for all conditions in DSM-IV. However, it did include a definition of mental health benefits that specifically recognizes that benefits must be in accordance with state law. The language will allow state parity provisions that are based on all DSM-identified conditions to remain in effect, according to mental health policy experts who have followed the bill.

Among the “surprising” components of the parity compromise was Senate negotiators' acceptance of House language requiring plans to cover out-of-network mental and substance use disorder services under the same terms and conditions that plans provide for out-of-network medical/surgical benefits. Prior to the compromise, the Senate bill allowed insurance plans to offer out-of-network medical/surgical benefits without offering any corresponding out-of-network mental health and addiction treatment benefits.

The acceptance of the House's out-of-network language was unexpected because mental health advocates and insurance industry lobbyists who had worked on negotiations for the Senate bill had adamantly stated they would not consider any changes to the bill because that might endanger compromises that had been carefully crafted over several years to satisfy competing interests.

Another feature of the compromise that aims to prevent insurance plans from circumventing mental health parity mandates requires the Government Accountability Office to study insurance industry practices relating to mental health care after the measure is enacted. Federal researchers would report on“ specific rates, patterns, and trends in coverage and exclusion of specific mental health and substance use disorder diagnoses by health plans and health insurance,” according to the compromise bill.

Supporters of parity in the Senate have told supporters that they plan to push for enactment of the bill in the fall before Congress adjourns. House parity supporters also are anxious to enact a new parity law quickly, as some of the most influential parity supporters are retiring at the end of this Congress.

“Mental illness is a disease like any other. We should treat it that way,” stated Sen. Max Baucus (D-Mont.) during Senate floor comments shortly before that chamber failed to overcome procedural hurdles and bring the compromise up for a vote at the end of July.

To boost chances that the bill will pass, Senate supporters are searching for the fiscal offsets for the $3.8 billion that the Congressional Budget Office (CBO) estimated the measure will cost the federal government over 10 years. The costs stem from the CBO's conclusion that the measure will result in slightly higher insurance premiums, which will then result in the diversion of more workers' pay into employer-paid premiums, which are tax exempt, thus leaving less wages on which the government can collect taxes. About 35 percent of the lost federal revenue will come from reduced Social Security payroll tax withholding, according to CBO estimates.

Fear that parity will carry a large cost to private insurance companies and their policyholders stymied progress of a strong federal parity measure for many years, even as the majority of states enacted their own parity requirements. The concern about increased costs to private insurance were eventually mollified by research showing only modest additional cost when mental health parity was added to programs such as the Federal Employees Health Benefits Program.

During Senate floor comments shortly before Congress recessed in July, Sen. Amy Klobuchar (D-Minn.) urged her colleagues to pass a strong parity measure because it was the leading goal of one of her predecessors, Sen. Paul Wellstone (D-Minn.), who died in a 2002 plane crash while campaigning for reelection. Wellstone saw how crucial a strong national parity law was after the emotional and financial toll that his brother's mental illness took on his family while he was growing up.

“There was a horrible financial situation for his family,” Klobuchar said. “He didn't want that to happen to someone else. He felt that if you can cover physical illnesses, you should also cover mental illness.”

The mental health parity compromise legislation can be accessed at<http://thomas.loc.gov> by searching on the bill number, S 3335. ▪