Mental Health Parity, Legislation and Advocacy

1. Mental Health Parity, Legislation and Advocacy Andrew Sperling Director of Federal Legislative Advocacy andrew@nami.org January 26, 2010

3. First, A Little History … • May 1992 – first federal bill introduced – S 2696 • 1993 & 1994 – Clinton Health Care Reform, standard minimum federal benefit with discriminatory limits • April 18, 1996 – Amendment to HIPAA legislation passes Senate 68-30 • September 22, 1996 – Domenici-Wellstone Amendment signed in to law as part of FY 1997 VA-HUD Appropriations bill, parity for annual and lifetime dollar limits only • 1996 – parity enacted in only 6 states (MD, MN, NH, RI, NC & TX state employees; by 2000, more than 25 states have enacted parity, including AL, CA, IN, NJ, SC & TX • June 1997 – Parity requirement added to Senate SCHIP bill, then dropped in House-Senate conference

4. Efforts in Congress Continue … • June 9, 1999 – President Clinton signs Executive Order requiring parity for all FEHBP plans – 9.5 million covered lives – becomes model for all future federal parity proposals • October 30, 2001 – Senate adopts parity amendment to the FY 2002 Labor-HHS Appropriations bill • April 30, 2002 – President Bush endorses parity at the University of New Mexico • October 25, 2002 – Senator Wellstone dies in plane crash • 2006 – Negotiations commence with employers and health plans, Senator Enzi plays a key role

5. Efforts in Congress Accelerate … • February 14, 2007 – S 558 reported by the Senate HELP Committee • September 18, 2007 – Senate passes parity bill (S 558) by unanimous consent after disputed language on state preemption is removed • March 6, 2008 – House passes parity (HR 1424) by a vote of 268-148 – after clearing 3 separate House Committees • Late June 2008 – agreement reached by all parties, budget offsets needed • October 3, 2008 – Parity attached to financial market recovery legislation and signed in to law

6. Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 • P.L. 110-343, signed on October 3, 2008 • Attached to the financial market rescue and tax extenders legislation • Becomes effective in new group health plan years starting after October 3, 2009 • Expands the 1996 federal parity law and requires equity in coverage with respect to: • Durational treatment limits (caps on inpatient days and outpatient visits) • Financial limitations (higher cost sharing, deductibles, out-of-pocket limits)

7. What Does the New Law Apply To? • Group Health Plans and Health Insurers That Provide Coverage to Group Health Plans (employers with over 50 employees) • Medicaid Managed Care Plans • State Children’s Health Insurance Program • Non-Federal Governmental Plans • Federal Employees Health Benefits Plans

8. Parity in Group Health Plans • Includes both mental health and substance abuse “as defined by the plan” “in accordance with applicable federal and state law” • No preemption of state mandates or parity laws above the new federal standard • Small employer exemption for firms with 50 or fewer workers • Cost increase exemption available, unlikely to be used • Full parity will now reach 82.2 million covered lives in ERISA self-insured plans sponsored by firms >50 employees (v. only 31.4 million in fully insured state regulated group health plans >50 employees)

9. Parity in Group Health Plans • Out of network requirement for mental health and substance abuse – Where offered on the medical-surgical side • Disclosure of plan information including medical necessity criteria for mental health and substance abuse • Biennial reports from the Secretary on compliance beginning in 2012 • Notice and Assistance – Secretary required to publish guidance on parity compliance and widely disseminate to employers, plans, NAIC, consumers, etc. AND provide assistance on continued operation of state laws • GAO report on coverage and exclusion of mental health and substance abuse benefits (including exclusion of specific diagnoses) – due in 2 years

10. What Does Parity Mean? • Mental health and substance use disorder benefits must by “no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan…” and “there are no separate cost sharing requirements than are applicable only with respect to mental health or substance use disorders benefits.”

11. Areas That May Need Clarifications in Regulations • Define No More Restrictive than the Predominant Financial/Treatment Limitations Applied to Substantially All Medical and Surgical Benefits • Preemption of State Laws • Scope of Services • Management of the Benefit • Cost Exemption • Separate But Equal Deductibles? • Does the Law Apply to EAPs • Parity Means Equal to or Better than

12. Parity in Health Reform Legislation • Both the House and Senate bills require all health plans offered through the “Exchange” to BOTH include mental health benefits in the basic benefits package AND comply with the Wellstone-Domenci • Major impact on the exemptions in Wellstone-Domenici for the individual insurance market and small employers