Professional Point

Following months of exciting and hopeful congressional action on mental health parity, at the 11th hour last December, a conference committee dropped the legislative language needed to enact parity. The parity provision, which was included in a spending bill for the U.S. departments of Labor and Health and Human Services by an overwhelming vote of the Senate but opposed by a number of powerful House committee chairmen, was voted down by a 10 to 7 margin. In its place, the conferees decided to extend the 1996 parity law.

The provision that went to conference committee--known as The Mental Health Equitable Treatment Act, championed by Senators Paul Wellstone (D-Minn.) and Pete Domenici (R-N.M.)--was intended to expand the limited protection offered by the Mental Health Parity Act of 1996 that sunset in September of last year. The 1996 law provided for parity between mental health and physical health insurance coverage only with respect to annual and lifetime dollar limits. The more recent proposal, if enacted, would have established parity for annual and lifetime dollar limits, hospital days, outpatient visits, co-pays, deductibles and out-of-pocket maximums. The expansion to full parity is critical since experience with the 1996 law showed that many employers eliminated discriminatory dollar limits on mental health coverage but created new discriminatory restrictions on other aspects of the mental health benefit plan, such as office visits and hospital days. In effect, the recently defeated bill would have closed the "loopholes" created by the 1996 law and prohibited employers from continuing to discriminate against mental health coverage and against people in need of mental health services.

Roadblocks to parity

The opposition--the insurance and employer communities--argued as they have in the past that passage of the bill would be a "budget buster," causing many employers to drop mental health coverage altogether. Although this argument has remained the same since the battle for parity began before 1996, experience and related data have changed. States increasingly have enacted parity laws without the problems envisioned by the opposition. Of the 37 states with parity laws, 16 have put full parity in place--some with parity for both substance abuse and mental health coverage. Employer budgets have not imploded for companies in these states, and mental health coverage has not been dropped in any significant way.

Interestingly, the projected costs for putting full federal mental health parity in place have decreased considerably since 1996. When the 1996 law was introduced (prior to its being narrowed to decrease the cost), the Congressional Budget Office (CBO) estimated a 4 percent increase in the cost of private health insurance premiums to achieve full parity. By contrast, the CBO "scored" the Mental Health Equitable Treatment Act as increasing costs less than 1 percent. This small amount of projected increase for creating full parity is the result of states enacting parity laws and parity being implemented by Executive Order for the Federal Employees Health Benefits Program. In other words, the increasing requirements for parity that have already occurred throughout the nation's health system significantly reduce the cost of taking the next logical step to full parity at the federal level.

As parity proponents countered the cost argument throughout the legislative debate, the opposition frequently took cover behind the principle that government mandates are simply bad for business. Rather, the opposition argued, businesses should be left the flexibility to design their own coverage plan to suit their needs. Perhaps if the parity debate were really only about dollars, costs and business decisions, this argument might have some merit. But parity is about ending discrimination against people in need of mental health services. To state the obvious, there has been no attempt to stop any type of discrimination--whether related to age, race, gender or disability--on the basis of allowing "flexibility" for those who engage in discriminatory practices.

We're closer now

In truth, much progress has been made in decreasing discrimination against people with mental health disorders. Some employers have in fact implemented mental health parity coverage for their employees without being directed to do so by statute. That Congress even kept the issue on its agenda in the post-Sept. 11 legislative session is a testament to the awareness and importance of the issue. In fact, the opponents on the conference committee did not argue publicly against the merits of parity but, rather, only raised the procedural pitfalls of adopting authorizing language as part of an appropriations law.

We appear closer than ever to achieving the goal of full parity. Both the administration and Congress have committed to coming back to the issue in 2002. And House Republicans have pledged to hold hearings in the committees of jurisdiction for the first time. The last step to parity may not be far away.