March 3, 2008
The effort to enact a comprehensive mental illness insurance parity bill has made tremendous progress over the past year. The Senate unanimously passed S 558 on September 18, 2007. A separate House bill (HR 1424) has 273 cosponsors and cleared 3 separate
NAMI continues to press for insurance parity as a top legislative priority. It is especially important for the more than 82 million Americans in self-insured employer health plans that are beyond the reach of the 42 state parity laws now on the books. Comprehensive parity legislation will ensure that health plans cover treatment for mental illness on the same terms and conditions as all other diseases – free of discriminatory limits on coverage and with equal cost sharing and deductibles.
NAMI greatly appreciates the efforts of the chief sponsors of the House bill, Representatives Patrick Kennedy (D., RI) and Jim Ramstad (R., MN) to elevate parity as a priority issue in Congress. NAMI continues to believe that the Senate bill (S. 558) offers the best hope for achieving comprehensive federal parity this year.
NAMI continues to press leaders in the House to pass the Senate bill (S 558) and send it on to President Bush so it can be signed into law. This has been complicated by an effort to pass the separate House bill (HR 1424). NAMI remains concerned that a long drawn out effort to resolve differences between the two bills would likely doom parity in an election year with a short legislative calendar. In addition, there are strong indications that there are major provisions in HR 1424 that are unacceptable to both the Senate and Bush Administration.
NAMI therefore believes that the best chance for passage of parity in 2008 is for movement of a final bill similar to S 558 so that any final bill can get through the Senate and be sent to the President and be signed into law this year.
In addition to procedural concerns about the potential impact of separate passage of the House parity bill, NAMI has also expressed substantive concerns with the required minimum benefit provision in HR 1424. Both S 558 and HR 1424 contain requirements for group health plans to cover mental illness treatment at parity when it is offered (i.e., equal treatment limits and financial limitations). However, the House bill goes further in mandating coverage of the broadest list of conditions if mental health benefits are offered.
NAMI is concerned that this “triggered” coverage mandate (separate from the underlying equitable coverage requirement) has the potential to place mental health benefits at risk as the bill forces employers and health plans to make an “all or nothing” choice between covering all mental health disorders in the APA Diagnostic Statistical Manual (DSM) and completely eliminating all mental health benefits. In other words, if a health plan or employer elects to cover major disorders such as schizophrenia, bipolar disorder, major depression, severe anxiety disorders (including PTSD), then they would be legally compelled to cover every disorder and condition in the DSM, including substance abuse and the V-codes (conditions that not deemed mental disorders). The only option for a health plan or employer not wanting to offer coverage for the entire DSM would be to entirely drop all mental health coverage.
It is important to note that this “triggered” coverage mandate for the entire DSM is NOT included in the Senate bill. As a result, S 558 does not preempt any state law that requires offering or coverage of serious mental illness, or any state law that limits a parity requirement to serious mental illness. Further, it should be noted that NAMI views the Senate bill as strong legislation that would end all forms of insurance discrimination including limits on inpatient days and outpatient visits, as well as financial limitations such as higher cost sharing, deductibles and out-of-pocket limits.
By avoiding any new coverage mandates, the Senate bill keeps coverage affordable. Attempts to characterize S 558 as “weaker” or “watered down” are simply false. The Senate bill provides comprehensive protections against unfair or arbitrary limits in coverage for mental illness, while avoiding new requirements that could result in loss of mental health coverage.
In all likelihood, yes. HR 1424 contains specific language (page 14, lines 10-17, and page 28 lines 1-8) requiring federal law to supersede any state law that does not provide “greater consumer protections” than the federal standard for BOTH equitable coverage and the DSM mandate. As a result, HR 1424 would supersede any state law that requires minimum coverage for severe mental illness that is LESS than the entire DSM. NAMI’s review of state minimum benefit laws (based on information from the National Association of Insurance Commissioners) indicates that the following states would likely see their required minimum benefit laws displaced:
In the case of preemption of these mandated minimum benefit laws, what federal standard would displace state law? The “triggered” coverage mandate in HR 1424. In other words, a state imposed requirement to cover (or offer coverage of) serious mental illness would give way to optional mental illness coverage, with an inherent disincentive for an employer to mental health coverage entirely. As a result, existing requirements for offering of coverage for severe mental illness would likely be displaced by a new federal standard that while broader in scope (the entire DSM rather than serious mental illness), would nevertheless allow health plans to eliminate mental health benefits entirely.
Further, such preemption would likely occur in states that have enacted parity laws restricted to serious mental illness. As a result, there could be individuals and families enrolled in health plans that currently must meet a standard for parity under state law, that would lose that parity level coverage. How? The scope of their state parity requirement would be displaced by a federal standard that makes offering of mental health benefits entirely optional.
There are an additional set of concerns raised by provisions in the House bill that are required to “offset” revenue lost to the Treasury as a result of enactment of parity. Under recently revived budget rules Congress must “pay for” any change in federal law that results in higher entitlement spending or lost revenue with an “offsetting” cut in another program. In the case of parity tax revenue will be lost to the government as health spending that is now made by families with after tax dollars shifts to before tax dollars.
This occurs as spending now excluded from health plan coverage (e.g. because of arbitrary limits on inpatient psychiatric care that would not be allowed under parity) is covered by health plans with pre-tax dollars. The House bill is projected to result in nearly $3.8 billion in lost revenue and additional spending over the next decade. Under the congressional “pay-go” rules, all of this $3.8 billion must be offset. The bill the House will take up this week proposes to take nearly half of this total offset from the Medicaid program.
Specifically, the House bill proposes to increase rebates paid by pharmaceutical manufacturers as part of the Medicaid program. NAMI remains concerned about the potential impact of these increased rebates on broad access to medications prescribed to treat serious mental illness in Medicaid programs across the nation. Payment of these rebates is directly linked to decisions by states to impose access restrictions such as prior authorization and step therapy on specific medications that are needed by the most vulnerable Medicaid beneficiaries. NAMI is very concerned about any attempt to use a cut in Medicaid to finance parity. NAMI will continue to press for alternative budget offsets to “pay for” parity.