National Association of Social Workers
GOVERNMENT RELATIONS UPDATEDecember 20, 2001
Update on Mental Health Parity(S. 543, H.R. 162)
Issue: The Mental Health Parity Act of 1996 expired on September 30, 2001 as it was authorized for only five years. Current law will revert to that which existed before the enactment of the Mental Health Parity Act of 1996.
In an effort to address this issue, Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN) introduced the Mental Health Equitable Treatment Act of 2001, S. 543. Representative Marge Roukema (R-NJ introduced similar legislation, the Mental Health and Substance Abuse Parity Amendments of 2001, H.R. 162.
Current Status: On December 18, 2001 conferees on the Labor-HHS-Education Appropriations bill voted to remove the Domenici/Wellstone mental health parity amendment. None of the 10 House Republican conferees voted for Rep. Patrick Kennedy’s motion to accept the amendment while all 7 House Democrats voted for it. Rep. Ralph Regula (R-OH), conference chairman, cited opposition from authorizing committee chairs as the reason for their "no" votes. Senate conferees, who strongly supported the provision, did not need to vote.
Simple Extension: The Labor-HHS conferees did approve a motion by Rep. Randy "Duke" Cunningham to include in the bill a simple one year extension of the Mental Health Parity Act of 1996. Referring to removing the Domenici/Wellstone amendment, he declared, "For many of us it was a difficult vote…Senator Domenici asked me to help." When the appropriations bill becomes law, the 1996 Act will be effective until December 31, 2002.
Background: An earlier compromise offer from Rep. Nancy Johnson (R-CT), Chair of the Ways & Means Health Subcommittee, proved non-negotiable, and parity champions were unwilling to so weaken their legislation as the price of accepting the offer. Rep. Johnson, a historical parity supporter, was acting with the blessing of full Committee Chairman Bill Thomas (R-CA). Their proposal was to put the Senate parity amendment into the economic stimulus bill, H.R. 3090, but with an unacceptably low 1% cost exemption threshold and use the definition of mental health benefits from the 1996 Act, which could enable health plans and employers to pick which diagnoses to cover, rather than cover the entire DSM-IV.
Future: Senator Domenici told parity advocates after the votes that he would get the Senate to pass his free-standing bill, S. 543, early in 2002, and then work with us to push House authorizing committees to report the bill. House Commerce Chairman Billy Tauzin (R-LA) has promised hearings. President Bush has written that he wants Congress to produce a parity bill that balances protecting those with mental illnesses with the need to hold down costs to employers. Please check the NASW website, www.socialworkers.com, for the most recent details.
History of Mental Health ParityThe Mental Health Parity Act of 1996 (the 1996 Act) took effect on January 1, 1998 and sunset on September 30, 2001. The primary sponsors of the legislation were Senators Pete Domenici (R-NM) and Paul Wellstone (D-MN).
The basic premise of the 1996 Act was parity should exist between mental health benefits and those for medical and surgical care with regards to the level of benefits provided. It is important to note that the 1996 Act did not require employers to offer mental health care benefits if they choose not to, but if such benefits were provided, they had to have been equal to those for medical and surgical care.
For organizations having more than 50 employees with group health plans that offer mental health benefits, the plans could not have had different annual and/or lifetime limits for mental health care than those for medical and surgical care. Although mental illnesses were covered by the scope of the 1996 Act, neither substance abuse nor chemical dependency treatments were covered.
Specifically, both aggregate lifetime limits and annual limits had to have been identical for mental health benefits as those for medical and surgical benefits, if and only if a covered employer offered mental health benefits. The 1996 Act applied to not only fully insured state-regulated health plans, but also self-insured plans that are exempt from state law under the federal Employee Retirement Income Security Act and thereby regulated by the U.S. Department of Labor. In addition, state mental health parity laws were not preempted by the 1996 Act, ensuring that stronger state statutes were not weakened.
Some loopholes did exist, however. Employers who could demonstrate at least a one percent or more increase in costs as a result of the implementation of mental health parity were permitted to exempt themselves from the tenants of the 1996 Act. Co-payments, deductibles, out of pocket payments, managed care, and caps on the number of inpatient days and/or outpatient visits were beyond the scope of the legislation as are organizations with fewer than fifty employees.
S. 543 and H.R. 162 aim to finish the work that Congress began with the Mental Health Parity Act of 1996. In fact, 32 states have followed suit and enacted their own mental health parity statutes. However, it is important to note that this vanguard legislation did not induce fundamental changes in employer behavior concerning mental health parity.
The General Accounting Office (GAO) reported last May that 86% of employers surveyed reported that they had complied with the requirements of the Mental Health Parity Act of 1996. Nevertheless, the vast majority of those employers substituted new restrictions on mental health benefits, thereby evading the spirit of the law. Given the loopholes and limited scope of the 1996 law, employers still are continuing to limit mental health benefits more severely than those for medical and surgical coverage, most often by restricting the number of covered outpatient visits and hospital days and also by imposing higher co-payments and/or deductibles for mental health care.
While the 1996 Act did not eliminate all barriers and disparate treatment facing mental health consumers, it represented an important first step. Yet, permanent regression on this issue is at risk as the 1996 Act expired on September 30, 2001, as Congress did not take action to either extend the 1996 Act or pass other comprehensive mental health parity legislation such as S. 543 or H.R. 162.
Remedy:NASW strongly advocates for the expansion of mental health parity as embodied by either S. 543, or H.R. 162.
S. 543 would expand upon the 1996 Act by providing full parity for all categories of mental health conditions listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM-IV), except substance abuse disorders. Health insurance plans would be forbidden from applying different deductibles, co-payments, out-of-network charges, inpatient day and outpatient visit limits for mental health care than those for medical and surgical health care, if mental health benefits are offered. Like the 1996 Act, S. 543 would not mandate that plans offer mental health benefits if they currently do not.
Small businesses with fewer than 50 employees would be exempted and the one percent compliance cost increase opt out would be eliminated. S. 543 also does not contain a sunset provision, so that the law would exist indefinitely unless deliberately amended or repealed by Congress.
H.R. 162 differs slightly from S. 543, as it would also apply to substance abuse disorders.
Take action now. Let your Representatives know how you feel about the recent decisions made regarding Mental Health Parity. Your advocacy around this issue is especially critical now, given recent events.
TAKE ACTION NOW
Should you need further information, please contact Francesca Fierro O'Reilly, NASW Senior Government Relations Associate, at either 202-336-8336 or fforeilly@naswdc.org.