Mental Health Benefits Bill Impeded

At first glance, the legislation appears unstoppable: More than half the House members and two-thirds of those in the Senate back a proposal to broaden mental health insurance coverage.

But the juggernaut has been slowed--and soon may be halted altogether--by a powerful alliance of big business, the insurance industry and House Republican leaders.

The measure, which the Senate approved in October as part of a routine appropriation bill, aims to end the common practice of group health insurance plans imposing much tighter restrictions on mental health benefits than on what they provide for physical ailments.

Spearheading the bid to help families defray the direct costs of treating schizophrenia, depression and other mental illnesses are Sens. Paul Wellstone (D-Minn.), one of Congress’ most liberal members, and Pete V. Domenici of New Mexico, a respected GOP leader best known for his expertise on budget issues.

But big employers and insurance companies have been fighting the proposal, saying it would drive up the cost of providing health insurance just as corporate profits are suffering. The measure, they say, could result in less, not more, health benefits for employees.

The House version of the appropriation bill did not contain the mental health provisions. A House-Senate conference committee began looking for a compromise last week that would allow a significant expansion of mental health coverage but limit the cost to employers. House GOP leaders, however, have urged negotiators to drop the proposal from the spending bill entirely. In a discouraging development for the measure’s sponsors, White House officials said late in the week that the administration would rather postpone action on the issue until next year.

“The White House has not been helpful,” Wellstone said. “It’s really an uphill battle.”

The measure’s fate is likely to be decided later this week, as Congress nears adjournment for the year.

If the drive to block the mental health proposal succeeds, it will mark the latest in a string of victories for the insurance lobby. In late November, insurance companies won House passage of legislation to aid the industry in the event of another terrorist attack. (Senate approval may follow soon.) And before that, health insurance companies bitterly fought legislation to impose new regulations on managed health care plans; the bill stalled and now has been largely eclipsed by post-Sept. 11 concerns.

The fact that the mental health measure has gotten as far as it has in Congress is attributable in part, however, to the transformation of the legislative agenda following the terrorist attacks. The sense of national crisis buried some once-prominent issues, like campaign finance reform, and gave new prominence to others, such as concern about tending to the nation’s mental health.

“At a time when mental health care is of unprecedented importance, many will discover that their health plans hinder rather than help them receive treatment,” said Rep. Marge Roukema (R-N.J.), a leading House supporter of the legislation.

According to a report by the U.S. surgeon general, about 20% of all Americans are affected by mental disorders. But many who seek treatment face steeper co-payments and deductibles than they pay for treatment of physical illness--as well as strict limits on the number of office visits or days in the hospital that will be covered.

Congress passed a law in 1996 that tried to address the disparity in coverage. That law prohibited private insurance companies from setting annual and lifetime limits on mental health benefits--unless the same limits applied to other illnesses. But insurance companies found other ways to curb benefits for the mentally ill, such as limiting the number of visits a year that could be covered.

That is why Domenici and Wellstone are pushing their new proposal. It would require parity not just in overall benefit limits but in terms of what costs are covered and the access provided to services.

Like the ’96 law, the new measure would not require any plan to cover mental health; it would apply only to those plans that already provide coverage for mental treatment. The legislation also exempts businesses with 50 or fewer employees.

Proponents say the measure is essential to ensure fair and effective treatment for mental illnesses, some of which have biological roots. They argue that the discrepancy in coverage reflects the continuing stigma attached to mental illness.

“We made progress with the 1996 law, but we need to pass this new . . . legislation to have policies befitting the 21st century and not the dark past,” Domenici said.

But employers and insurance companies have peppered key lawmakers with phone calls and letters imploring them to block the measure. They are worried that the cost of expanded mental health benefits would be prohibitive, especially if coverage is provided for what critics say are vaguely defined or bogus psychological conditions. The measure’s foes also argue that increased insurance costs are particularly unwelcome now, at a time when the economy is in a recession and health insurance costs are skyrocketing.

“There’s no dispute that this is an important benefit,” said Neil Trautwein, director of employment policy for the National Assn. of Manufacturers. “But in an era where health care costs are climbing through the roof, we don’t need an open-ended benefit that’s impossible to contain.”

To address that concern, House and Senate negotiators are considering a compromise by Rep. Nancy L. Johnson (R-Conn.) that would allow an exemption from the parity requirement for employers who demonstrate that their insurance costs would increase by 1% or more as a result. Proponents of the legislation are open to allowing such an exemption but want to set the bar higher, at 2.5%.

Johnson also is urging that the measure’s scope be narrowed so that it covers only the most serious mental illnesses, not every condition.

Paul Dennett, vice president of American Benefits Council, a coalition of Fortune 500 companies opposed to the legislation, said allowing a cost-based exemption was an improvement. But he said businesses still oppose the measure because it would impose new limits on employers’ ability to design their own benefit programs.

Domenici and Wellstone, both of whom have close relatives with mental disorders, are backed by a broad coalition of advocates for the needs of the mentally ill. They held a news conference recently at which former First Lady Rosalynn Carter and television newsman Mike Wallace were among those who endorsed the measure.

The National Alliance for the Mentally Ill noted in a recent ad that as governor of Texas, President Bush signed a state law prohibiting discrimination against mental illness in health insurance. The Texas bill, however, was more narrowly focused than the congressional measure.