Mental health coverage advances

A House committee yesterday advanced legislation requiring employers to provide the same insurance coverage for mental illness as they do for other medical services, a move insurers warn would lead to higher medical expenses for businesses.

The House Energy and Commerce Committee passed the bill 32-13, sending it to the floor. A competing bill was approved last month by the Senate, which the health insurance lobby and the Bush administration strongly support.

President Bush has indicated he is in favor of parity for mental health care coverage, but hasn’t pledged to sign either version of the legislation.

“We are concerned the House bill could have a negative effect on the accessibility and affordability of employer-provided health benefits,” Labor Secretary Elaine L. Chao and Health and Human Services Secretary Michael O. Leavitt said in a recent letter to senators.

Under both bills, health insurers would have to provide the same coverage for mental health disorders as they do for medical conditions.

This would change many longstanding practices of insurers — such as setting limits on how many times per year a patient can see a psychiatrist while allowing unlimited visits to a family doctor, or reimbursing a smaller percentage of the costs for mental health treatments.

Both versions of the bill would result in slightly higher premiums for employer-sponsored health care, according to Congressional Budget Office estimates. The CBO projects that some employers might increase deductibles and co-payments, further limit benefits under their health plans or stop offering insurance altogether to compensate for higher costs.

The CBO also estimates that the legislation would reduce federal tax revenue by $1.1 billion over the next four years and increase Medicare spending by $310 million at the same time.

Cost concerns in the House bill have sparked strong opposition among employers and insurers. Their concerns are driven by the potential for more lawsuits against employers and by allowing patients to get mental health services from doctors not included in a health plan network.

“While many employers have generous mental health benefit programs because it improves employees’ health and productivity, the House bill would tie employers’ hands and make it difficult for them to provide effective, high-quality, well-managed mental health benefits affordably,” said Steven Wojcik, vice president of public policy at the National Business Group on Health, a Washington trade organization that represents large businesses.

Alissa Fox, vice president of legislative affairs for Blue Cross Blue Shield Association, a trade group for the major health care provider, said a concern for health insurers is a provision in the House bill that would allow workers to sue an employer for monetary damages when mental health services are not covered.

Mental health advocacy organizations support both versions but prefer the House bill.

“We recognize the House bill provides greater protections from patient perspective,” said Ralph Ibson, vice president of government affairs at Mental Health America, a nonprofit organization for the mentally ill. “Yet we have witnessed, year after year, strong legislative proposals die before passing. The Senate bill is not all that we would have hoped for, but it makes great strides; we would welcome its passage if it’s as far as Congress can go.”