House committee passes mental health parity bill

WASHINGTON—Passage last week of mental health care benefits parity legislation by a House of Representatives panel sets the stage for a showdown with the Senate.

As expected, the Education and Labor Committee approved, on a 33-9 vote, legislation that would force many employers to upgrade their mental health care benefits plans.

The bill--like one cleared in February by the Senate Health, Education, Labor and Pension Committee--would require employers to provide the same financial cost-sharing requirements for mental health coverage as they do for other medical conditions (see box, page 6).

For example, if a group health care plan covered 80% of medical treatments, it would have to do the same for mental health care expenses.

Additionally, under both bills, discriminatory treatment limitations would be banned.

That would mean an end to common plan designs in which, for example, coverage is provided for a maximum of 20 or 30 annual visits to mental health care therapists, with no limits imposed on the number of visits to physicians treating other medical conditions.

Similarly, health care plans could not impose a limit on the number of inpatient days for treatment of mental disorders if they did not impose the same limit for other medical conditions.

Also, under both bills, employers with fewer than 50 employees are exempt from parity requirements.

But the House bill differs in several ways from the bill in the Senate.

For example, the House measure would tie the type of mental health care disorders that group health care plans must offer to coverage offered by health plans available to federal employees.

Typically, plans offered in the federal employees health program cover any diagnosis listed in the psychiatric community's compendium of mental health disorders on the same basis as any other medical condition.

The Senate bill, though, would leave it to employers to decide which mental health care disorders they would cover.

In addition, the Senate bill would pre-empt state parity laws, while the House bill would not interfere with stronger state laws.

Those differences aroused strong passions among Education and Labor Committee members before last week's vote. For example, ranking minority member Rep. Howard P. McKeon, R-Calif., said the House bill goes beyond parity.

"By requiring virtually every mental illness defined by the mental health profession--including caffeine addiction, jetlag and others--to be covered by plans, this mandate would take us in exactly the wrong direction from our shared goal of increasing health coverage and reducing the ranks of the uninsured," according to the lawmaker.

But Rep. George Miller, D-Calif., contends the House bill would ensure that meaningful mental health care benefits are provided to employees and that the cost to employers of so doing would be insignificant.

"There is considerable evidence demonstrating that providing mental health parity is cost effective and could even reduce costs to employers by eliminating the need for medical care and emergency room visits if mental illnesses are left untreated," he said.

Some benefit lobbyists are optimistic that the Senate version will prevail.

They note, among other things, that a wide assortment of business groups as well as provider organizations support the Senate bill, while the House bill lacks such broad support.

"I'm guardedly optimistic about the prospects of the Senate bill," said Neil Trautwein, vp and employee benefits counsel with the National Retail Federation in Washington. "You would think a bill that has the support of all the major stakeholders is the right vehicle," he added.

Other lobbyists are less certain, saying it is too soon to make predictions.

"There is still much to talk about," said Paul Dennett, vp-health policy with the American Benefits Council in Washington.

"There is some tough negotiating ahead," said Frank McArdle, a consultant in the Washington office of Hewitt Associates Inc.

Still, Mr. McArdle predicts, odds favor passage of some type of parity legislation during the current congressional sessions.

"There is strong bipartisan support for doing something, and this would be a popular election year issue," he said.

Whichever version is passed, it would be a big change from the current federal parity law. That 1996 law, which legislators have renewed several times, bans discriminatory annual and lifetime dollar limits for mental health care expenses.

However, the law allows employers to discriminate in other ways. For example, it is legal for a health care plan to limit the number of annual outpatient visits for treatment of mental health disorders it will cover, while not imposing a comparable limitation for other medical conditions.

Such limitations are common. Washington-based Mercer Health & Benefits L.L.C. surveyed more than 600 employers and found that 64% of them imposed benefit limitations, such as capping the number of visits to mental health therapists or inpatient days but did not impose comparable limitations on other medical conditions.