Senate, House Reach Agreement on Policy Framework for Mental Health Parity Legislation

The House and Senate have reached an agreement on the policy framework for legislation that would require employers and health insurers to cover mental illnesses at the same level as physical illnesses, the Wall Street Journal reports. Under the agreement, the terms of which will be set this week, mental health benefits would be required to be on par with medical and surgical benefits, including treatments such as hospital stays, physician visits and cost sharing such as copayments, deductibles and out-of-pocket expenses. If a plan offers medical coverage for treatment outside its provider network, it must offer the same for mental health treatment.

Negotiators said the agreement would cost about $1.3 billion over five years and $3.4 billion over 10 years, mostly because of lost tax revenue. The plan would affect mental health coverage for 113 million people, including 82 million enrolled in federally regulated plans that are funded by employers and 31 million people who are enrolled in state-regulated health plans. The agreement contains elements of a Senate mental health parity bill that the Bush administration supports, as well as a broader House measure that the administration opposes.

The compromise won the support of business groups -- who were concerned such requirements would raise their health care costs -- because it wouldn't mandate coverage of specific mental health conditions or add liability risks under state laws, the Journal reports. Katie Strong, director of congressional and public affairs at the U.S. Chamber of Commerce, said, "Costs would be the biggest concern to employers, but we are hopeful the way it's drafted will not dramatically increase costs." Insurers could control costs using managed care tools, such as requiring members to see a doctor or therapist in their network or having doctors routinely show that continuing therapy sessions or other treatments are necessary, the Journal reports.

Neil Trautwein, vice president and employee-benefits policy counsel at the National Retail Foundation, said, "Time will tell what the ultimate cost will be," adding, "We definitely think it's in the greater interest of both employers and employees alike, and we think this is a responsible approach to extend mental health parity and mental health coverage." Karen Ignagni, president and CEO of American's Health Insurance Plans, said that the group supports the compromise legislation and that she does not believe the agreement would lead to insurers dropping coverage for behavioral health disorders or conditions (Zhang/Fuhrmans, Wall Street Journal, 7/11).