Despite widespread support and last ditch efforts to allocate funding for legislation that would require employers and insurance companies to consider mental health coverage on par with other physical ailments and injuries, a compromise parity bill — included in a much larger piece of legislation — failed to capture the votes needed to move forward.

To recap, in March, the U.S. House of Representatives passed the Paul Wellstone Mental Health and Addiction Equity Act (H.R. 1424). In September 2007, the U.S. Senate had passed the Mental Health Parity Act (S. 558), a bill that was written with the support of business groups and health insurance companies. While parity advocates celebrated the passage of both bills, H.R. 1424 included more protections for people in need of treatment, and thus, was largely supported by the addiction community.

Since two of parity’s strongest advocates Sen. Pete Domenici (R-N.M.) and Rep. Jim Ramstad (R-Minn.) are
retiring this year, both sides were determined to reconcile the differences between the House and Senate versions of the bill, in order to get a bill to the President this year.

Compromise agreement

In late July, along with their cosponsors — Sen. Edward Kennedy (D-Mass.) and Rep. Patrick Kennedy (D-R.I.) — they reached a compromise parity agreement incorporating elements from both S. 558 and H.R. 1424, including:

• Health plans that provide mental health or substance use disorder benefits must provide the same financial requirements (deductibles, co-pays, coinsurance, etc.) and treatment limitations (frequency of treatment, days of coverage, lifetime limits, etc.) for those disorders, that they provide for most other medical and surgical conditions.
• Out-of-network benefits for mental health and substance use disorders must match those provided for medical and surgical benefits.
• State parity laws will be protected by the current Health Insurance Portability and Accountability Act (HIPAA) standard. The U.S. Department of Labor will annually audit compliance with the parity bill and inform state regulators about the effects on state laws (with the goal of protecting state parity laws).
• Plans will be able to medically manage the benefits and determine the scope of coverage, but they will be required to provide patients with the terms of the medical necessity criteria and reasons for denials. (Use of the DSM-IV as the scope of coverage will not be included in the bill, as it had been in the House’s draft.)
• To protect against unfair medical management, the Government Accountability Office (GAO) will study the specific coverage rates for mental health and addiction, the diagnoses most commonly excluded, the costs of coverage, etc.
• The bill would exempt employers with under 50 employees and plans whose costs increase more than two percent in the first year or one percent in any subsequent year (the exemption would only apply for one year, after which point the plan would need to reinstate parity again).

There is still the issue of funding, since the parity bill was expected to cost approximately $3.9 billion over 10 years. To offset these costs, Congress would either have to cut spending on other programs, or raise taxes, which is primarily why the bill has been stalled for several months. The Democratic leadership in the Senate decided on July 30, to include the parity legislation into the much larger Jobs, Energies, Family and Disaster Relief Act of 2008 (S. 3335), in hopes of garnering more Republican votes for the tax bill. Also, since the bill already included extensions for various tax previsions related to energy production, conservation and individual and business activities, it seemed like as good a fit as any.

It’s not over yet

Unfortunately, S. 3335 did not receive enough votes to invoke cloture on the motion to proceed. Cloture essentially means to end debate, and requires two-thirds of the Senate be present and voting. The motion was defeated 51 to 43, with six senators not voting.

Rep. Patrick Kennedy and others are still hopeful that parity legislation can pass this year. Kennedy issued a statement shortly after the failed vote, emphasizing that the partisan bickering over S. 3335 “was strictly about the main substance of the tax extenders bill, not about mental health parity.”

“There remains a strong bipartisan coalition in support of mental health parity, and I look forward to working with my colleagues to pass this legislation when Congress reconvenes in September,” Kennedy said.

The parity bill may remain in the larger S. 3335; or lawmakers may choose to pull it out and address the legislation individually when they return from their summer recess in September. Once the bill has been passed by both chambers of Congress, the president must sign it before it becomes law. President Bush has indicated that he will sign the parity bill if it is passed by the House and Senate.

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