Mental Health Provision May Imperil Reform Bill

A proposal to dramatically expand health insurance coverage for mental illness is drawing fierce opposition from business and threatens to kill the popular health reform legislation now moving through Congress.

The Senate is scheduled to vote on final passage of a bill today making it easier for millions of Americans to keep their coverage if they quit their jobs, are laid off or suffer from a serious illness.

But the popular legislation came under attack from business Monday, with warnings that the mental health provision could sink the entire bill. Up to now there had been no serious opposition to the bill, but business has been successful in the past in killing any health care legislation it found unacceptable.

The provision would mandate that corporate health plans provide the same level of benefits for mental illness as they do for physical ailments.

Critics say the mandate would cause a sharp and unsustainable increase in health care spending. The Assn. of Private Pension and Welfare Plans, for example, has calculated that typical health policy co-payments of $10 for a visit to the doctor or for a prescription would need to jump to $30 to cover the additional costs to insurers if mental health and medical coverage are equalized.

Current health insurance programs provide much more restricted coverage for mental problems. A typical insurance plan, for example, might limit inpatient treatment for mental health to 30 days a year, without any limit on the number of days of hospitalization for a physical ailment. The number of visits to a counselor, psychologist, therapist or psychiatrist might be sharply limited, compared to unrestricted access to other health professionals. And there are often low limits on total spending for the year for mental health services.

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Proponents of parity for mental health coverage--including Tipper Gore, the wife of Vice President Al Gore and the administration’s foremost advocate on the issue--say such coverage is not only a question of fairness but also can reduce costs associated with worker productivity.

In an interview Monday, Mrs. Gore said that she “will continue working hard, make no mistake about it, to promote parity for mental health.”

“Treatment not only saves lives; it saves dollars,” added Sen. Paul Wellstone (D-Minn.), one of the provision’s sponsors.

The vast majority of companies with more than 500 workers have unlimited freedom to set the terms and conditions of their health insurance coverage. The amendment adopted by the Senate last Thursday on a 68-30 vote would impose a new federal mandate, insisting on parity in mental health coverage for any firm offering health care to its workers.

But critics warned Monday that the provision could doom the legislation.

Mental health coverage “is a very expensive benefit,” said Laura Thevenot, vice president for federal affairs at the Health Insurance Assn. of America, a highly influential industry trade group. “We obviously have a concern with anything that will increase the cost of coverage,” she said.

“It is extremely difficult for the chamber to imagine a compromise that would make this acceptable,” Neil Trautwein, manager of health care policy for the U.S. Chamber of Commerce, said Monday. The burden of covering mental health ailments can be “a bottomless pit, cost-wise,” he said.

The mental health coverage changes would significantly increase costs, leading to a further decline in coverage, said Richard Smith, vice president for health care policy at the APPWP, which represents major U.S. corporations. He said costs could climb 8% to 11%.

The mandate was added to the insurance-reform measure during an unusually personal and poignant Senate debate in which members recalled the devastation of loved ones by mental illness.

Sen. Alan K. Simpson (R-Wyo.) detailed the mental illness that gradually overtook a niece so that one day she bought a gun, went to an isolated field and “blew her chest away.”

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The lead Republican sponsor, Sen. Pete V. Domenici of New Mexico, spoke movingly of his daughter, who receives mental health treatments. Insufficient insurance coverage for mental health “represents one of the real continuing injustices in America today,” Domenici said during the debate. Costs would increase less than 2% if his amendment becomes law, according to Domenici.

Wellstone, his co-sponsor on the Democratic side, talked about his brother who suffers from mental illness.

Among the Senate’s 100 members--a much more cohesive group than the 435-member House--personal relationships and private appeals carry a lot of weight.

During last week’s debate, Wellstone recalled on Monday, many members approached him or Domenici and said words to the effect: “This is very personal to you, isn’t it? I’m going to vote with you.”

The vote “transcended typical politics and parties,” he said.

A Republican Senate, with a majority elected on promises to scale back government, found itself voting for an expansion of government mandates that had never been suggested by the Democratic president, or even taken to a vote when the Democrats controlled both houses of Congress in the first two years of the Clinton administration.

The White House also was taken by surprise by the Senate adoption of the Domenici-Wellstone amendment.

The mental health controversy ensures a contentious Senate-House conference to resolve differences in the health insurance bills passed by each chamber. The House version, which passed last month, does not address mental health coverage--although it has controversial provisions of its own, including medical savings accounts and malpractice reform.

The health insurance bill itself is largely noncontroversial. Co-authored by Sens. Nancy Landon Kassebaum (R-Kan.) and Edward M. Kennedy (D-Mass.), the legislation would enhance portability, generally barring insurers from denying coverage to those who have switched jobs.