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Volume 12 Number 138
ISSN 1091-4021
Thursday, July 19, 2007

News: Lead Report

The House Committee on Education and Labor July 18 approved a mental health parity bill (H.R. 1424) that would require health plans that offer mental health coverage to provide the same benefits for mental illness as they do for other medical conditions.

The legislation, known as the Paul Wellstone Mental Health and Addiction Equity Act of 2007, would amend the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act (PHSA) to prohibit employer group health plans from adopting mental health treatment limitations, financial requirements, or out-of-network coverage limitations unless comparable limitations and requirements were adopted for medical and surgical benefits, Committee Chairman George Miller (D-Calif.) said during the bill markup.

"Health plans tend to limit treatment of mental health illnesses by covering fewer hospital days and outpatient visits, and raise deductibles and copayments beyond a point that is reasonable," Miller said. "Today, 44 million Americans suffer from mental illnesses," he said. "The bill before us today would close the gap in coverage for people without adequate mental health coverage."

Reps. Patrick J. Kennedy (D-R.I.) and Jim Ramstad (R-Minn.) introduced the legislation, which now has 268 cosponsors.

Eight Republicans joined 25 Democrats to approve a slightly modified version of the Kennedy-Ramstad legislation. By a vote of 33 to 9, the committee approved an amendment in the nature of a substitute offered by Miller. The Miller amendment incorporates H.R. 1424 as originally introduced, but adds a number of provisions and clarifications designed to address concerns about the cost and scope of the bill.

The bill now goes to the full House; no date is set for a vote.

The Senate Health, Education, Labor, and Pensions Committee approved a similar mental health parity bill (S. 558) in February, by a 18-3 vote.

Opponents of the House legislation argued that the Senate version of the bill would be less costly to employers and more likely to be signed into law quickly, because it was the result of extensive negotiations among parity advocates, businesses, insurers, lawmakers, and other stakeholders.

At the House panel markup, Committee ranking member Howard P. McKeon (R-Calif.) said, "For more than two years, Senators from both parties, members of the employer community, and mental health stakeholders have worked to forge an agreement that would provide mental health parity in a responsible way."

By contrast, McKeon continued, H.R. 1424 "over-reaches by burdening employers with excessive, new mandates that have the potential to increase costs," and by requiring out-of-network coverage for mental health benefits if a plan provides coverage for substantially all medical and surgical services in emergency, inpatient, or outpatient services. The House bill also defeats "the long-standing precedent of ERISA preemption" and makes "employer-sponsored health plans subject to multiple state laws and--again--increased costs and diminished coverage," McKeon added.

Senate Version Rejected

But the committee rejected (by a 16-27 vote) a substitute amendment offered by Rep. John Kline (R-Minn.) that incorporated the latest version of the Senate bill.

The amendment was rejected despite calls from several business groups to adopt the provisions contained in S. 558.

Kline's amendment "offers several changes that will expand mental health coverage while also maintaining the integrity of the employer-provided health care system," R. Bruce Josten, executive vice president of Government Affairs at the U.S. Chamber of Commerce, said in a July 17 letter to the House committee. "The Chamber's members recognize the importance of providing comprehensive mental health benefits. However, we do not believe that mandating benefits, which may lead to the erosion of federal laws in the name of 'fairness,' accomplishes this goal. Rather, such changes could have the ultimate effect of causing employers to stop offering health care coverage," Josten said.

And in a July 17 statement, the American Benefits Council said the language in the Senate bill considers the needs of both health plan sponsors and plan participants. S. 558, unlike the House bill, "allows employers the flexibility to design plans; makes clear that medical management of these important benefits may not be prohibited; and ensures uniformity between federal and state parity requirements while maintaining states' current authority to regulate insurance," the Council said.

Cost to Employers

Miller said H.R. 1424 would increase costs for employers by only 0.6 percent or less, while decreasing employees' out-of-pocket costs by 18 percent.

"[T]here 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 that result if mental illnesses are left untreated," Miller added.

Rep. Robert E. Andrews (D-N.J.) said the cost increases from H.R. 1424 could be as low as 0.1 percent with aggressive medical management practices, including the use of medical necessity and other appropriate criteria.

Regarding the issue of ERISA preemption, Andrews said the House bill preserves the stronger mental health parity benefits mandated in many states, and argued that such state laws should not be preempted.

Andrews also highlighted the provisions of the Miller substitute amendment approved by the House committee. While adopting the provisions of H.R. 1424, the Miller amendment:

• adds emergency care to the list of categories of items and services that are subject to the treatment limit parity requirements (other categories are: inpatient in-network, inpatient out-of-network, outpatient in-network, and outpatient out-of-network);
  
  
• makes clear that the requirement that group health plans make available to patients and providers their criteria for medical necessity determinations and reasons for any denial under the plan be provided in accordance with Department of Labor regulations;
  
  
• makes clear that the minimum scope of mental health and substance related disorder benefits must be medically necessary;
  
  
• adds a provision making clear that group health plans may utilize benefit management practices for medical, surgical, mental health and substance related disorder benefits;
  
  
• makes clear that the bill does not preempt state laws relating to health insurance issuers including state laws providing for external review, requiring minimum benefits, covering employers with fewer than 50 employees, or solely related to health insurance issuers;
  
  
• makes clear that collectively bargained plans become subject to the act upon the expiration of the collective bargaining agreement;
  
  
• requires the Department of Labor to annually sample and conduct random audits of group health plans to ensure compliance with the law; and
  
  
• requires the Department of Labor to assist individuals with any questions or problems under the law and to coordinate with state consumer protection agencies.

Full text of H.R. 1424, as amended, is available.