Senate OKs Insurance Measure for Mentally Ill

In a victory for advocates for the mentally ill, the Senate voted Tuesday to require group health insurance plans that cover mental illness to provide benefits on par with what they provide for physical illness.

The measure was approved by voice vote despite opposition from conservatives who said the federal government should not be imposing costly mandates on employers who provide health insurance.

The measure is designed to close a loophole in a 1996 law to prohibit discriminatory treatment of the mentally ill in health insurance.

Proponents of the measure said they got a boost from the broad national concern about shoring up the nation’s mental health in the wake of the Sept. 11 terrorist attacks on the United States.

“Certainly in the aftermath of Sept. 11, the need for mental health parity is even more evident,” said Sen. Paul Wellstone (D-Minn.), a leading proponent of the bill.

The insurance measure was approved as an amendment to a $407-billion appropriation bill for education, health and other social programs. The House has already approved its version of the spending bill, without the mental health rider. Proponents are hopeful that the rider will be retained by the House-Senate conference committee that will be appointed to iron out differences between the two versions of the bill.

The mental health issue has been championed by Wellstone and Sen. Pete V. Domenici (R-N.M.). The two lawmakers co-sponsored the 1996 law that for the first time prohibited private insurance companies from setting annual and lifetime limits on mental health benefits, unless those same limits applied to other medical illnesses. But that law expired Sept. 30. And even when it was in effect, insurance plans found other ways to curb benefits for the mentally ill--for example, by limiting the number of outpatient visits covered each year.

The amendment passed Tuesday would go further, requiring plans that cover mental and physical illnesses to provide full parity between the two. That would apply both in terms of the costs covered and the access provided to services. For example, if a plan pays 80% of the cost of medical services, it would have to pay 80% of the cost of mental health care. The bill would not, however, require any plan to cover mental illness; it would apply only if a plan already provided coverage for mental health benefits. The bill exempts small businesses with 50 or fewer employees and would not take effect until 2003.

Sen. Phil Gramm (R-Texas) said he opposed the bill because it would raise costs to employers by an estimated $23 billion over five years in increased premium costs. And he argued that the federal government should not dictate to employers what kind of health plans they should offer.

“Who are we to be telling American workers and American business what kind of health insurance benefits they should have?” Gramm asked.

The bill also is predicted to cost the federal government about $5 billion over 10 years in lost revenue, because analysts assume that employers would cut taxable wages, a result of increased spending on health premiums.

But proponents argued that costs to the government and employers are outweighed by the importance of providing adequate and fair treatment of mental illnesses that can take a heavy toll on families and society as a whole.

“Mental illnesses are diseases of the brain, like any other body part,” Domenici said. “They should be given fairer treatment in terms of health care coverage.”