Government Relations and Communications Staff

March 15, 2007 — "Please help close loopholes in the current mental health parity law by cosponsoring S. 558, the Mental Health Parity Act of 2007." Psychologist leaders took this message to their elected officials on Capitol Hill at the culmination of the APA Practice Organization 2007 State Leadership Conference (SLC), March 3-6. As a result of their meetings, psychology gained five additional Senate cosponsors for the parity bill — bringing the total number to 40 Senators.

The bill by Senators Pete Domenici (R-NM), Edward Kennedy (D-MA) and Michael Enzi (R-WY), S. 558, was approved by the Senate Health Committee on February 14 by a vote of 18 to 3. Psychology advocates expect that the full Senate will debate S. 558 after the spring recess ends in April.

The Senate bill would extend full parity protection to some 113 million Americans in group health plans covering more than 50 employees. The bill would close loopholes in the 1996 federal parity law that allow health plans to use discriminatory restrictions on mental health day and visit limits, co-payments and deductibles. Further, the legislation would cover substance abuse and chemical dependency along with mental health services.

S. 558 resulted from months of compromise with representatives of the employer and insurance industries -- traditional opponents of full parity legislation. The APA Practice Organization played a key role in these negotiations, including gaining a provision in the Senate bill that would extend parity coverage to out-of-network services when a health plan provides these services.

While the employers and insurance communities favored Senate legislation that would preempt state laws, parity advocates succeeded in restricting the bill to narrow preemption of state laws.

The Senate bill does not preempt any state laws unrelated to parity or mandated mental health benefits. It does preempt provisions of state parity laws related to financial and treatment limitations such as day and visit limits, co-payment and deductibles.

The bill also would apply cost exemptions. Specifically, it would provide for an exemption if employers can substantiate that their costs increased 2 percent or more in the first year, and at least 1 percent in later years, as a result of the parity law. A qualified actuary must make the determination based on actual cost data, and the exemption applies for only one year. This provision of federal law would preempt any cost exemption in state parity laws.

Significantly, the Senate bill specifically preserves the provisions of state laws that require the coverage of diagnoses. The bill language ensures that state DSM parity laws will remain in place, while state severe mental illness laws will be enhanced, since the federal law would require parity for all diagnoses covered by health plans.

SLC participants also urged Representatives to support efforts to advance parity legislation in the House of Representatives. The day after the psychology conference ended, Representatives Patrick Kennedy (D-RI) and Jim Ramstad (R-MN) introduced H.R.1424, the Paul Wellstone Mental Health and Addiction Equity Act, with a bipartisan majority of 256 cosponsors.

According to psychology advocates, the House bill differs from S. 558 in a couple of ways that employers and insurers oppose. H.R.1424 does not propose any preemption of state laws. By contrast, limited preemption is the crux of the compromise with employer and insurance representatives reflected in S. 558. Further, the House bill would mandate an out-of-network option, instead of requiring parity for out-of-network services when a health plan offers those services as well as well as in-network services.

House Speaker Nancy Pelosi (D-CA) has told Rep. Kennedy of her desire to move the bill through the three committees to which the bill has been referred. All three committees are headed by strong parity supporters. Differences in the House and Senate versions of parity legislation likely would be resolved in conference later this year.

Look for updates on the progress of parity legislation in future issues of this PracticeUpdate e-newsletter.