Mental Health Parity and Addiction Equity Act
On September 23, 2008, the House passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, H.R. 6983—legislation that will end discrimination against patients seeking treatment for mental illness. On October 3, the President signed the bill into law.
This legislation was introduced by Rep. Patrick Kennedy (D-MA) and Jim Ramstad (R-MN), and reflects a House-Senate agreement on the Mental Health Parity bill. The Senate had passed its version of the bill in September 2007 and the House passed its version in March 2008.
Background
This bipartisan bill is designed to end discrimination against patients seeking treatment for mental illnesses. Specifically, the bill prohibits insurers and group health plans from imposing treatment or financial limitations when they offer mental health benefits that are more restrictive from those applied to medical and surgical services.
The bill applies only to insurers and group health plans that provide mental health benefits. It also exempts businesses of 50 or fewer employees; and businesses that experience an overall premium increase of 2 percent or more in the first year and 1 percent in subsequent years.
Over the last eight years, the Federal Employee Health Benefits Program (FEHBP) has made “parity” coverage for mental health care available to Members of Congress and 8.5 million other federal employees. Research has shown that there has been no significant cost increase attributable to this parity requirement in FEHBP.
Furthermore, the nonpartisan Congressional Budget Office has estimated a miniscule impact on premiums for the mental health parity bill – just two-tenths of one percent.
The offset in the bill delays the effective date of a questionable tax break enacted in 2004 that would let U.S. multinational companies that have shipped jobs overseas reduce their U.S. taxes by deducting more of their worldwide interest income against their U.S. income. This tax break has not gone into effect, and hence not one company currently utilizes this provision.
This bipartisan bill is supported by a long list of groups, including the American Medical Association, American Hospital Association, American Nurses Association, American Academy of Pediatrics, National Hispanic Medical Association, American Counseling Association, National Association of Social Workers, Families USA, American Psychiatric Association, American Psychological Association, Mental Health America, National Alliance on Mental Illness, National Association of State Mental Health Program Directors, and National Mental Health Awareness Campaign.
An Overview of the Bill's Key Provisions
Requires equity in financial requirements. Under the bill, an insurer or group health plan must ensure that any financial requirements – such as deductibles, copayments, coinsurance, and out-of-pocket expenses – applied to mental health and addiction benefits are no more restrictive or costly than the financial requirements applied to comparable medical and surgical benefits that the plan covers.
Requires equity in treatment limits. Under the bill, a group health plan must ensure that the treatment limitations – such as frequency of treatment, number of visits, and days of coverage – applied to mental health and addiction benefits are no more restrictive than the treatment limitations applied to comparable medical and surgical benefits that the plan covers.
Does not mandate mental health benefits. The bill does not mandate insurers or group health plans to provide any mental health coverage. The bill’s provisions only apply to plans that choose to offer mental health coverage.
Exempts certain businesses. The bill exempts small businesses with 50 or fewer employees. It also exempts those businesses that experience an overall premium increase of 2 percent or more in the first year and 1 percent in subsequent years.
Does not mandate out-of-network benefits. The bill simply states that if a plan already offers out-of-network benefits, it must offer out-of-network benefits on the same terms for mental health services as it does for medical and surgical services.
Does not pre-empt stronger state parity laws. The bill establishes a federal floor but permits states to go further to protect their citizens. This bill would not supersede any state law that provides consumer protections, benefits, rights, or remedies stronger than those in the bill.
Explicitly permits medical management of health benefits. The bill allows the use of medical management tools that are based on valid medical evidence and pertinent to the patient’s medical condition so that specific coverage is not arbitrary in its application and more transparent to the patient.
Provides for enforcement. The bill provides remedies to protect beneficiaries’ rights and permits enforcement of the bill’s equity requirements by the Internal Revenue Service, the Department of Health and Human Services, and the Department of Labor.