House mental health parity bill raises issues

April 1, 2008

National reports-Recently approved legislation to boost insurance coverage of care for mental health disorders could have just the opposite effect, according to insurers.

NATIONAL REPORTS-Recently approved legislation to boost insurance coverage of care for mental health disorders could have just the opposite effect, according to insurers.

The bill adopted last month by the House requires employer-sponsored insurance that covers mental-health services to provide the same level of coverage as for medical benefits. More specifically, most group plans could not have higher copays or stricter coverage limits for mental conditions. The measure also requires coverage of a broad range of conditions that fall under the mental health umbrella, including substance abuse.

The House bill was sponsored by Reps. Patrick Kennedy (D-R.I.), who has battled depression, alcoholism and drug abuse, and Jim Ramstad (R-Minn.), a recovering alcoholic who is Rep. Kennedy's Alcoholics Anonymous sponsor.

The bill is projected to raise public and private outlays by $4.3 billion over 10 years. To offset that amount, the legislation proposes to gain $2.4 billion by restricting activities of physician-owned specialty hospitals. Another $2 billion would come from a significant increase in rebates on prescription drugs paid by manufacturers to state Medicaid programs.

Health insurers are looking to the Senate to modify the House policy. The Senate approved a much narrower version of mental health parity legislation last fall that provides insurers and payers more flexibility and carries no cost offsets.

QUESTIONABLE COVERAGE?

According to the Associated Press, the House measure specifies that if a plan provides mental health benefits, it must cover mental illnesses and addiction disorders that are listed in the American Psychiatric Assn.'s Diagnostic and Statistical Manual of Mental Disorders, which is used by mental health professionals.

Rep. Phil Gingrey, MD (R-Ga.), complained that the House bill would mandate coverage for conditions such as jet lag and sexual dysfunction, which are listed in the psychiatric association's manual. "Can you imagine any employer being willing to cover things like that?" Dr. Gingrey asks.

Patient advocates have been pressing for years for legislation to boost mental health benefits, but the wide differences between the two measures may make compromise difficult.