Insurance industry battles bill mandating mental health coverage

Introduction

James Hackett learned about the inequities in the coverage of mental health services after his teenage daughter was the victim of a sexual assault. Her despair left her with severe panic attacks that were so intense that she could no longer attend her high school and had to be treated at an inpatient center, he told a congressional subcommittee in July.

Inpatient care for his daughter was not available nearby though; no appropriate facility exists in Hackett’s state of Texas. Fortunately for Hackett’s daughter, her father was president of a huge oil and gas company and he was able to pay for the care she needed. His employees, however, had no such luck. Nonetheless, he admits that he became exposed to the often-overlooked and highly stigmatized mental health care system where ordinary people cannot hope to afford care for mental illness.

Hackett wanted the House Subcommittee on Health to pass legislation that has already been approved in 33 states, embraced by the federal civil service system and even a reluctant President George W. Bush a bill that would force insurers to offer the same level of coverage for mental illness as for other diseases.

Despite overwhelming support from the public, Congress has been unable or unwilling to pass a so-called mental health parity law. Its advocates place the blame squarely on insurance companies.

Insurance companies make money by covering the healthiest part of the population, Dr. Darrel Regier of American Psychiatric Association told the House subcommittee. By offering a poor mental health benefits program, you discourage those people from signing on.

Indeed, the insurance industry has continued a prolonged campaign of influence in attempts to block parity legislation. According to the Center for Responsive Politics, since 1990, insurance interests have contributed approximately $175 million dollars to the campaign committees of federal candidates. Insurance interests have also been aggressive in their lobbying activity, spending some $87 million dollars on influencing the Congress and the Executive Branch in 2000 alone.

In the current election cycle, the industry has contributed more than $19 million, including some $9 million in soft money donations to political party committees.

Some of the outspoken adversaries in Congress to mental health parity have gladly taken the industry’s contributions. House Speaker Dennis Hastert (R-Ill.) has received approximately $320,000 from insurance interests since 1994. Majority Whip Tom DeLay (R-Texas) and Representative Anne Northup (R-Ky.), both members of the House Appropriations Committee, have each taken in close to a quarter-million dollars in donations.

Members of the House Appropriations Committee, where the bill first died in December of 2001, have received almost $1.8 million in just the past two elections.

The House Energy and Commerce Committee is holding hearings on the bill, whose members have also benefited from the largesse of the insurance industry’s deep pockets. The industry has forked over $3.3 million in the past two campaigns to committee members, easily outdistancing the House Appropriations Committee’s total.

The Subcommittee on Health held a hearing on mental health parity this summer. Its chairman, Representative Michael Bilirakis (R-Fla.), has enjoyed the favor of insurance interests. CRP reports that Bilirakis has received insurance money up to approximately $120,000 since his 1994 Congressional campaign. During his opening statement, Bilirakis expressed that the concerns [of business and insurance industries] need to be balanced with the needs of patients.

Bush has also taken his piece of the pie. In the 2000 election alone, the insurance industry pumped $1.6 million into his campaign coffers.

From “Harry and Louise” to Mental Health

The primary opponents of parity legislation are the major insurance industry trade associations such as the American Association of Health Plans (AAHP) and Health Insurance Association of America (HIAA) and business groups such as the National Association of Manufacturers (NAM).

HIAA is responsible for placing the Harry and Louise issue ads against former President Bill Clinton’s healthcare proposals during the mid-1990s. According to Joe Luchok, Communications Manager at HIAA, lobbying against mental health parity at the moment is nothing at that level. Strangely enough, HIAA has filed a suit in the past year against CuresNow, who appropriated the middle-class, married characters to battle against cloning concerns.

HIAA has nearly 300 member firms that provide insurance coverage to over 100 million Americans; AAHP represents more than 1,000 plans that provide coverage to approximately 150 million people. The trade groups do battle for the national healthcare insurance providers like AFLAC, Liberty Mutual Group and State Farm Insurance.

About 70 percent of health care plans today provide some mental health benefits for their consumers. Nonetheless, treatment for mental health is restricted to a certain number of hours of therapy as well as an actual dollar amount. Because psychotherapy can be open-ended and long-term, mentally ill individuals frequently pay much more due to the limits insurers place on their coverage than they ever would for a broken leg or an appendix operation. Moreover, mental illnesses, such as manic depression or schizophrenia, can be just as debilitating and disruptive as major physical ailments, if not more so.

Advocates of mental health parity insist that insurance companies that do not provide equal coverage are discriminating against the mentally ill.

Due to extensive research, medicine has been developed to combat, treat and even cure several mental illnesses. In a 1999 report on mental health, Surgeon General David Satcher stated we know more today about how to treat mental illness effectively and appropriately. Further, some afflictions are caused by bacteria, viruses and other external factors. Though manifested in the mind, affecting behavior and thought process, a majority of mental illnesses can now be treated by traditional medical means.

Opponents to equal treatment and coverage for mental health claim such coverage would break the back of small business by forcing insurance companies to cover a wide range of insignificant diseases.

Supporters have claimed some temporary victories. The Mental Health Equitable Treatment Act of 1996, sponsored by Senators Pete Domenici (R-N.M.) and Paul Wellstone (D-Minn.) took effect in 1998. While the law limited treatment and hours of therapy allowed under coverage, it nevertheless established a precedent of mental health parity in federal law. The law expired a few weeks after the tragedies of September 11.

The Federal Case

While most Americans have limited or no coverage for mental health illnesses, federal workers enjoy a far more generous benefit. In 1999, President Clinton signed an order that granted mental health parity within the insurance plan for federal employees, known as the Federal Employees Health Benefits (FEHB) Program. The coverage became effective in 2001 and provided support those with mental health and substance abuse problems among the 9 million people employed by the government.

After their bill expired in 2001, Domenici and Wellstone revisited the issue. They proposed new legislation, the Mental Health Equitable Treatment bill of 2001, which, like the FEHB Program, lifts restrictions on therapy and treatment costs.

Each of the senators has a close family member afflicted with a mental illness: Domenici’s daughter and Wellstone’s brother. Struggling to care for their loved ones, Domenici and Wellstone realized the problem of treating mental health in America. Not only are victims stigmatized, but the costs can impose an unbearable financial strain on families.

Domenici and Wellstone’s bill passed in the Senate but ran into firm opposition in the House Appropriations Committee.

The bill effectively died in December 2001 in conference committee and a later amendment to tack on mental health coverage to the annual appropriation for the Department of Health and Human Services failed.

The Bush administration had no comment. Supporters of the bill pleaded for White House support of the act, citing concern over the nation’s mental health due to the shock and trauma of September 11. Reports of depression had grown exponentially, support groups had doubled and therapy was becoming more and more common for the average citizen to handle the new threat of terrorism.

In an April 29th speech at the University of New Mexico, Bush signaled his support for mental health parity. Our country must make a commitment: Americans with mental illness deserve our understanding, and they deserve excellent care. They deserve a health care system that treats their illness with the same urgency as a physical illness.

Bush issued an executive order establishing the New Freedom Commission on Mental Health. The 15-member commission’s mission is to produce a comprehensive year-long study of the American mental health industry. Bush also appointed Michael Hogan, the Director of the Ohio Department of Mental Health since 1991, to head the commission. Wellstone press secretary Allison Dobson said she is anxious for [President Bush] to take action. After Bush’s apparent change of heart, Congress has followed the executive office’s lead.

Representatives Patrick Kennedy (D-RI) and Marge Roukema (R-NJ) sponsored legislation that parallels Domenici’s and Wellstone’s. The House bill now has 240 co-sponsors; its Senate counterpart has 66.

Counterclaims on costs, coverage

The insurance industry says that the current legislation will raise the premiums employers pay for health insurance, which will severely damage business and the economy. Yet in the summer of 2001, the Congressional Budget Office estimated the cost of the bill, finding that there would be an increase of just nine-tenths of a percent in group health insurance premiums. The estimate is a weighted average calculated for a 10 year period, covering every potentially affected and unaffected plan.

A number of firms would face little or no additional costs from complying with the proposed federal law, a July 12th CBO memorandum concluded. That same memo also stated that affected plans would experience an increase of between 30 and 70 percent in mental health costs. Another result, according to the CBO, would be a loss of federal tax revenue over the 10-year period of $5.4 billion. Any increase in the cost of insurance premiums could be written off as a business expense by firms that offer their employees health insurance.

Yet, as Wellstone aide Allison Dobson noted, the insurance industry has disputed the non-partisan CBO, which is widely respected.

Luchok, the lobbyist for HIAA, believes mental health parity is not going to destroy the health insurance industry, [but] it’s going to hurt some people.

In its 1999 report about mental health, the Surgeon General estimated that American businesses lose about $70 billion every year to mental illness, causing poor performance, absentia and harmful disruption in the workplace.

The insurance industry has also attempted to limit the kinds of mental illnesses that would be covered. One proposal they’ve offered would cover only those mental illnesses that result from biological factors. Conditions that are biologically based, or where there is a bio-chemical imbalance with identifiable symptoms and significant functional impairment, clearly require treatment, testified Kay Nystul, a psychiatric registered nurse and Management Coordinator for Wausau Benefits.

Victims of sexual abuse or individuals suffering from post-traumatic stress syndrome would effectively be ignored by the bill then.

The House version of the bill has been referred to Energy and Commerce’s Subcommittee on Health. One hearing has already been held and more hearings have yet to be scheduled.

James Hackett’s daughter will not have to wait to see what happens next on Capitol Hill. Hackett said she was able to recover and is now looking forward to attending college, a dream we had forsaken three years ago.

Millions of Americans lack the resources to aid them with recoveries of their own.

Top Recipients of Insurance Money in the 2002 Election Cycle

Members of the House of Representatives:

1. Johnson, Nancy (R-CT): $182,353

2. Pomeroy, Earl (D-ND): $110,650

3. Rangel, Charles B (D-NY): $87,500

4. Baker, Richard H (R-LA): $83,631

5. Graham, Lindsey (R-SC): $73,150

6. Rogers, Mike (R-MI): $70,800

7. Boehner, John A (R-OH): $64,850

8. Foley, Mark (R-FL): $62,350

9. Oxley, Michael G (R-OH): $55,500

10. Gephardt, Richard A (D-MO): $55,000

Senators

1. Baucus, Max (D-MT): $204,599

2. Torricelli, Robert G (D-NJ): $134,729

3. Sessions, Jeff (R-AL): $99,344

4. Schumer, Charles E (D-NY): $91,184

5. Allard, Wayne (R-CO): $90,581

6. Collins, Susan M (R-ME): $83,400

7. Hagel, Chuck (R-NE): $81,970

8. Gramm, Phil (R-TX): $77,943

9. McConnell, Mitch (R-KY): $75,668

10. Smith, Robert C (R-NH): $73,161

Source: These statistics from the Federal Election Commission were compiled by the Center for Responsive Politics.