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House Subcommittee Holds First Hearing on Mental Health Parity

The House Education and the Workforce Subcommittee on Employer-Employee Relations held a March 13 hearing to discuss mental health parity. It marks the first time that a House committee has held a hearing on the subject. Late last year, the Senate approved a bill (S. 543) that would have required all health plans to cover mental health in the same manner that they cover physical illness, as part of the FY2002 Labor, Health and Human Services, and Education appropriations bill (P.L. 107-116). However, the mental health language was dropped in a House-Senate conference. Instead, Congress reauthorized for one year a 1996 law, which requires insurers to set similar limits on annual and lifetime coverage for mental and physical illnesses.

Stating that the provision was dropped due to employers’ concerns that “they may have to drop coverage all together” due to “increased costs” and because “no House committee had fully examined the impact of an expanded parity law,” Subcommittee Chair Sam Johnson (R-TX) said, “After thoroughly examining mental health parity in today’s hearing, the subcommittee may look at specific proposals that would strike the appropriate balance between the concerns of advocates and employers.”

Reps. Marge Roukema (R-NJ) and Patrick Kennedy (D-MA) testified before the subcommittee in support of expanding the 1996 mental health parity law (P.L. 104-204). “I appreciate the concern that businesses raise about the potential cost of national parity legislation,” stated Rep. Roukema. “But the reality is that the lack of parity and the lack of access to effective treatment for mental illnesses cost American businesses far more today than a parity law ever will.” She added that the U.S. Surgeon General has estimated that “the direct business cost of lack of parity and lack of access to timely treatment is at least $70 billion per year.”

Rep. Roukema also discussed her bill (H.R. 162), which would require health plans that offer mental illness coverage to provide the same coverage for mental health care as for other care. “I want to emphasize at the outset that this is not a mandate,” she said. “It is a coverage condition….It simply says that health plans cannot discriminate against persons seeking treatment for mental illness by establishing substantially different—and deliberately discriminatory—limits on such treatment.”

Rep. Kennedy agreed: “How long will we continue to consign our constituents to bankruptcy, unemployment, or death because their kind of brain disorders are not deemed worthy of full insurance coverage?” He further added that “there is plenty of evidence from the federal government and dozens of states with parity laws that this is very affordable,” noting that the mental health parity provision under the Federal Employee Health Benefits Program “has shown that costs are manageable.”

A cosponsor of H.R. 162, Rep. Kennedy added that he and Rep. Roukema would soon be introducing a “scaled-back version that mirrors S. 543,” the Senate-passed bill that was dropped in conference. “I hope the compromise bill will gain your support,” he said. “The costs of inaction to our constituents, our economy, and our society are too great to do nothing.”

Saying “there are limits to health benefit plan funds,” Kay Nystul of Wausau Benefits, a company that administers health benefit plans for 434 employer groups, added, “Mandates that prescribe how plan sponsors must provide for mental health coverage and hence how much they spend, create an incentive for employers to not offer the coverage.”

Ms. Nystul stated that “there is a clear need for mental health resources to be carefully allocated to the right cases and treatment options.” Noting that some federal proposals would require parity to be applied to all mental health conditions, she suggested that a “distinction be drawn between biologically based mental illnesses” and other mental illnesses, saying that biologically based conditions “are generally more objectively defined and measurable, and more importantly, they respond to known treatment options.”

Jane Greenman of the ERISA Industry Committee (ERIC) agreed, saying, “Mandated broad mental health parity is a poor response to the public policy challenge of providing access to care to those who suffer from mental illness.” She dismissed studies on the costs of implementing mental health parity, saying, “What really matters, and what the studies generally cannot provide, is adequate information about how increased costs will be distributed among employers and employees.” Specifically, she said, “Estimating the average cost of implementing broad mental health parity across all employer-provided health plans does not tell policy makers what they need to know about the impact a broad parity mandate will have on individual employers and their employees.”

Dr. Henry Harbin of Magellan Health Services and the American Managed Behavioral Healthcare Association disagreed with the argument that mental health parity increases health care costs. Noting that his company, Magellan Health Services, provides behavioral health and employee assistance programs to roughly 70 million people, including 70 health plans and some programs serving federal employees, Dr. Harbin said that the company provides care for individuals in a number of states with state-sponsored mental health parity legislation. Speaking from several years of experience, he said, “We have yet to see an increase of greater than 1% of the total health care premium as a result of state parity legislation.” He added that the Office of Personnel Management has had a similar experience with the implementation of mental health parity for federal employees.

Lee Dixon of the National Conference of State Legislatures detailed state laws, saying that 23 states have enacted versions of mental health parity laws. “Among the 23 states that have mental health parity laws, 14 require mental illness parity for all state-regulated carriers; 5 require parity for mental illness and substance abuse; and 4 states require parity for mental illness in their state employee health benefits plans,” he said. Mr. Dixon added that variation among state laws exists because states have used different definitions of mental illness. While some states cover all mental illnesses, other states “make a distinction between ‘biologically based’ mental illnesses and other mental illnesses,” and some states include alcohol and substance abuse and others do not.

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