Congress Adds Mental Health Parity Act to Bailout

From Bloomberg…

Mental Health Coverage Expanded by Rescue Package (Update2)
By Aliza Marcus

Oct. 3 (Bloomberg) — Health insurers that provide mental- health benefits will be barred from providing less coverage than they do for other medical services under the $700 billion financial-markets rescue package approved by Congress.

The plan was backed by a 263-171 vote in the House of Representatives today and signed by President George W. Bush. The package incorporates a measure requiring so-called mental health parity for health plans enrolling more than 50 employees.

“Aren’t we all pleased across America that this legislation includes the mental health parity act?” House Speaker Nancy Pelosi, a California Democrat, said in a speech before the vote.

The mental-health measure was among provisions added to the financial rescue package to win support after the House initially rejected the bailout legislation. The Senate, which supported the expansion of mental health coverage benefits in tax legislation passed last month, approved the revised financial rescue plan on Oct. 1.

“It seemed like it was getting lost after the bailout issue arose, but now with this bill it’s just happened,” said Steve Vetzner, spokesman for the Mental Health America advocacy group in Alexandria, Virginia. “This has been a long struggle and long fight.”

The act is intended to eliminate what supporters call unequal access to care from insurers that set higher co-payments and other limitations on services such as mental health counseling compared with physical ailments.

$3.4 Billion

The House and Senate previously disagreed about how to cover the cost to the federal government of the expanded benefit, estimated at $3.4 billion over five years by the Congressional Budget Office in 2007.

The estimate is related to tax revenue that would be lost because employers would pay more for health insurance premiums, to cover the expanded benefits, instead of turning over some of this money as taxable wages to employees.

Health insurers and businesses worked with Congress on the measure, which built up wide support from stakeholders in the health-care field, said Aetna Inc. Chief Executive Officer Ronald Williams in a statement on Business Wire.

“They had a deal for a long time,” said Kim Monk, an analyst at Capital Alpha Partners, in Washington, in a telephone interview. “The challenge was how to off-set the cost,”

Employers will now be looking for well-managed mental health networks to help them reduce costs associated with implementing the legislation, Monk said. “Not all insurers have this, so they may have to beef it up.”

To contact the reporter on this story: Aliza Marcus in Washington at amarcus8@bloomberg.net

Last Updated: October 3, 2008 15:26 EDT