Senate passes Mental Health Parity Act

The Senate bill requires full parity between mental health and medical benefits for all aspects of health insurance plan coverage, including day/visit limits, dollar limits, coinsurance, copayments, deductibles and out-of-pocket maximums

by Government Relations Staff

September 26, 2007 — The U. S. Senate passed the Mental Health Parity Act of 2007 by unanimous consent on September 18. The bill requires group health insurance plans that offer mental health coverage to apply financial requirements to mental health benefits that are no more restrictive than the requirements pertaining to medical/surgical benefits. S. 558 requires full parity between mental health and medical benefits for all aspects of plan coverage, including day/visit limits, dollar limits, coinsurance, copayments, deductibles and out-of-pocket maximums.

As such, the legislation closes loopholes in the Mental Health Parity Act of 1996. The 2007 act would extend protections to over 113 million Americans, including 82 million individuals in self-insured employer plans who do not currently benefit from mental health parity protection through state laws. The Senate bill applies to both in-network and out-of-network services in all private employer health plans covering more than 50 employees.

“Senate passage of the Mental Health Parity Act of 2007 brings us a step closer to equal treatment for millions of Americans with mental health and substance use disorders,” said APA Executive Director for Professional Practice Russ Newman, PhD, JD. “For more than a decade, APA has been working to put an end to insurance practices that discriminate against those with mental health disorders.”

Forty three (43) states have passed legislation that provides varying levels of mental health parity. S. 558 establishes a “floor” of minimum standards for states, while maintaining the power of states to exceed the protections afforded by the federal legislation.

Introduced by Senators Pete Domenici (R-NM), Edward M. Kennedy (D-MA) and Michael B. Enzi (R-WY), the Mental Health Parity Act of 2007 has broad bipartisan support. For the first time, businesses and insurance companies such as Aetna and BlueCross BlueShield have joined a broad coalition of mental health advocacy organizations, including the American Psychological Association, to support mental health parity legislation.

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 (APAPO) played a critical role in negotiating and drafting the legislation and was instrumental in gaining a provision that would extend parity coverage to out-of-network services when a health plan provides these services. Importantly, representatives of APAPO also participated in negotiations that resulted in the Senate bill deferring to the Health Insurance Portability and Accountability Act (HIPAA) preemption model. Under this model, state laws that are more protective of consumer rights are allowed to prevail over federal law.

"The progress [psychology] made last week was a testament to the determination of the Senate sponsors, the effective mobilization of APAPO’s sophisticated network of grassroots psychologists, direct lobbying by the Practice Directorate’s government relations office and engagement of elected officials through the Association for the Advancement of Psychology/Psychologists for Legislative Action Now’s (AAP/PLAN) political giving" said Marilyn Richmond, J.D. assistant executive director for government relations.

The Congressional Budget Office projects that achieving mental health parity will increase average total plan costs by only 0.4 percent.

Organized psychology’s attention now turns to the House of Representatives, where a mental health parity bill is moving through the committee process.