MENTAL HEALTH: Senate Panel to Review Parity Issue

      Sens. Paul Wellstone (D-Minn.) and Pete Domenici (R-N.M.) are pushing for a bill to close a loophole in a 1996 law requiring insurance companies to offer equal dollar limits for mental and physical conditions. According to Congress Daily/A.M., the law has not "appreciably" raised insurance costs because it only requires that plans not have different annual and lifetime caps for mental and physical ailments. The General Accounting Office's Kathryn Allen testified before the Senate Health, Education, Labor and Pensions Committee yesterday that this loophole has allowed "most employer-sponsored health plans to use other features, particularly hospital and office visits, to continue to provide less coverage for mental health than for other health services."

Closing the Gap
      Wellstone and Domenici are promoting an extension of the 1996 law and a new bill that would require full parity for mental and physical treatment coverage. Steven Hyman, director of the National Institute of Health, supported the bill, testifying, "There is absolutely no biomedical justification for policies that judge mental disorders as being in any way less real or less deserving of treatment." Other witnesses disagreed on the bill's potential economic impact on employers. A representative from Delta Air Lines, Tara Woolridge, reported that following the company's expansion of mental heath coverage, "costs associated with increasing utilization of mental health services were offset by decreases in medical treatment cost." Dean Rosen of the Health Insurance Association of America argued that cost savings are the result of managed care initiatives, and as employers "turn away" from managed care options, mental health coverage costs could increase. "While proponents of mental health parity mandates must rely on the widespread adoption of managed care to hold down the cost impact of the mandate, they often ignore the fact that legislation being considered simultaneously would banish the very tools insurers and employers must rely on to effectively manage these costs," he said (Rovner, 5/19).