Senate OKs Expansion of 1996 Mental Health Parity Law
The Senate yesterday approved an expanded version (S 543) of a 1996 mental health parity law that would require insurers that provide mental health coverage to offer benefits "on par with what they provide for physical illness," the Los Angeles Times reports. The measure, approved by voice vote, is "designed to close a loophole" in the 1996 law, which expired on Sept. 30. The law prohibited private insurers from establishing annual and lifetime limits on mental health benefits, "unless those same limits applied to other medical illnesses." However, insurers found "other ways" to limit mental health coverage, such as by restricting the number of outpatient visits covered per year. The new measure, which would not take effect until 2003, would require health plans that offer mental health coverage to provide "full parity" with physical health coverage, with respect to both costs (such as deductibles) and access to services. Businesses with 50 or fewer employers would be exempt from these requirements. The measure was approved as an amendment to the $407 billion 2002 Labor-HHS appropriations bill (HR 3061) (Hook, Los Angeles Times, 10/31). The House-passed version of the appropriations bill contains only an extension of the 1996 law and not the broader parity measure (Frommer, AP/Nando Times, 10/30). Proponents of the latter are hopeful that the Senate-passed measure can be "retained" when a House-Senate conference committee meets.
The parity measure was sponsored by Sens. Paul Wellstone (D-Minn.) and Pete Domenici (R-N.M.), who also backed the 1996 law. "Mental illnesses are diseases of the brain, like any other body part. They should be given fairer treatment in terms of health care coverage," Domenici said (Los Angeles Times, 10/31). The AP/Nando Times reports that Sen. Phil Gramm (R-Texas) was the only senator to speak out against the measure, citing an estimate from the Congressional Budget Office that it would cost private insurers $23 billion over five years -- or about a 1% increase in premiums for employers (AP/Nando Times, 10/30). "Who are we to be telling American workers and American business what kind of health insurance benefits they should have?" he asked (Los Angeles Times, 10/31). The CBO also estimated that the bill would cost the federal government $5.4 billion over 10 years, as employers would likely reduce wages to pay for the increased coverage, which in turn would lower payroll and income tax revenue. Sen. Edward Kennedy (D-Mass.), however, said that increased worker productivity would "offset" the costs of the measure. "This country can afford mental health parity," he said (AP/Nando Times, 10/31).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.