[Congressional Record Volume 142, Number 117 (Friday, August 2, 1996)]
[Senate]
[Pages S9579-S9580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DOMENICI (for himself, Mr. Wellstone, Mr. Simpson, Mr. 
        Conrad, Mr. Warner, Mr. Specter, Mr. Reid, Mr. Dodd, Mr. 
        Grassley, Mrs. Kassebaum, Mr. Kennedy, Mr. Burns, Mr. Harkin, 
        Mr. Chafee, and Mr. Moynihan):
  S. 2031. A bill to provide health plan protections for individuals 
with a mental illness; to the Committee on Labor and Human Resources.


                  THE MENTAL HEALTH PARITY ACT OF 1996

  Mr. DOMENICI. Mr. President, I regret that it was not possible to 
retain this eminently fair and simple compromise in the conference 
agreement on health insurance reform.
  Though this attempt to create fundamental fairness for the mentally 
ill was not completed, this issue will not go away.
  The Americans who would have been helped by our compromise will not 
go away.
  Nor will I.
  As long as I am in this body, I will continue to fight to end 
discrimination against Americans with a mental illness.
  I am therefore introducing the compromise I offered the conference 
committee as a free-standing bill.
  The measure I am introducing today with the support and cosponsorship 
of Senators Wellstone, Warner, Specter, Reid, Simpson, and Conrad, is a 
vast departure from what the Senate originally passed during 
consideration of health insurance reform legislation.
  The Senate passed full parity for mental illness--full parity means 
that mental illnesses are treated as equals to physical illnesses in 
all respects of health coverage--copays, deductibles, inpatient 
hospital days, outpatient visits, out-of-pocket protections, and 
overall lifetime and annual expenditure limits.
  The measure I present today, however, covers parity only for lifetime 
and annual caps.
  I would very much like to introduce the Senate-passed measure 
providing full parity, or perhaps even something more than I am now.
  But in the interests of time, simplicity, and underlying, basic 
fairness, I believe this measure is a necessary step toward making 
health coverage equitable for all Americans, regardless of the nature 
of their illness.
  I believe this measure provides the fundamentals upon which better 
understanding and treatment can be built, and I believe the Senate 
should not miss this opportunity to do the right thing and end 
discrimination against Americans suffering from a mental illness.


                               What it is

  Let me again tell you what this bill will and will not do.
  This bill simply states that health plans wishing to offer a mental 
health benefit--this is their option, there is nothing in this 
provisions saying that they must offer any mental health benefits at 
all--if they choose to offer a mental health benefit, they must provide 
the same overall financial protection to people with a mental illness 
that they provide to people with a physical illness.
  If they have a $1 million lifetime limit for someone with cancer, or 
diabetes, or heart disease, they cannot have a lifetime limit of 
$50,000 for someone with schizophrenia or manic depression--they must 
provide $1 million for the person with a mental illness.
  They do not have to create another, separate $1 million for mental 
illness--they can include these treatments in their overall cap if they 
like.
  But they cannot impost a separate, lower overall limit for mental 
illness.
  This same arrangement applies to annual financial caps, as well.
  Since this compromise provides equal catastrophic protections, it 
protects Americans with the most severe and debilitating forms of 
mental illness.
  It does not apply to the constellation of disorders and problems that 
concern some of my colleagues such as marital problems, or behavioral 
problems, or maladjustments.


                             WHAT IT IS NOT

  It should be made clear what this bill does not do.
  This bill does not mandate mental health benefits;
  It does not include substance abuse or chemical dependency;
  It does not dictate what a plan can or must charge for services--
whether they be copays, deductibles, out-of-pocket limits, and so 
forth;
  It does not set or dictate how many inpatient hospital days or 
outpatient visits must be provided or covered.
  It does not, in any way, restrict a health plan's ability to manage 
care, such as preadmission screening, preauthorization of services, 
limiting coverage based on medical necessity, and so forth.
  It does not apply to employers of 25 or less.


                           WHAT IT WILL COST

  According to the CBO, this bill will not cost much. Frankly, I 
believe that even their cost estimates, even though practically 
inconsequential, are too high.
  CBO says this bill will cause a 0.4-percent increase in overall 
premiums, ultimately resulting in a 0.16-percent increase in employer 
contributions to employee health plans.
  Even though these costs are small--in a typical plan, a $0.60 to 
$0.67 increase per member per month--these projections are based on an 
assumption of increased utilization.
  This estimate does not even factor in the effects of managed care.
  We all know how managed care arrangements affect utilization and 
overall health care spending.
  Of the 99 percent of ERISA plans offering mental health benefits, 75 
percent already provide this care through a managed care arrangement--
this number is growing each day.
  If managed care were included in these assumptions, this provision 
would not likely cost anything at all.
  And the percentage of Americans ever reaching these new limits will 
be incredibly small--less than 5 percent of beneficiaries.
  So you can see why I do not believe this bill will cost even the 
small amount predicted by CBO.


       experiences of states that have already implemented parity

  Some of my colleagues might be skeptical of these claims
  Let me just outline the experiences of a few States that have already 
implemented parity.
  Texas--Full parity and chemical dependency benefits for State and 
local government employees, including all school districts and 
university employees (over 230,000 lives)--a 47.9-percent reduction in 
overall yearly mental health expenditures.
  Maryland--Full parity for all State-regulated plans--(over 400,000 
covered lives)--an increase in cost of 0.6 percent per member per month 
[PMPM].
  Rhode Island--Full parity for severe illnesses and chemical 
dependency--an increase in cost of 0.33 percent PMPM.
  Massachusetts--Full parity for severe illnesses--a 5-percent increase 
in utilization, but a 22-percent reduction in mental health 
expenditures.
  These numbers are for parity in the general sense, not the very 
limited balance included in the measure I am introducing today.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2031

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Mental Health Parity Act of 
     1996''.

[[Page S9580]]

     SEC. 2. PLAN PROTECTIONS FOR INDIVIDUALS WITH A MENTAL 
                   ILLNESS.

       (a) Permissible Coverage Limits Under a Group Health 
     Plan.--
       (1) Aggregate lifetime limits.--
       (A) In general.--With respect to a group health plan 
     offered by a health insurance issuer, that applies an 
     aggregate lifetime limit to plan payments for medical or 
     surgical services covered under the plan, if such plan also 
     provides a mental health benefit such plan shall--
       (i) include plan payments made for mental health services 
     under the plan in such aggregate lifetime limit; or
       (ii) establish a separate aggregate lifetime limit 
     applicable to plan payments for mental health services under 
     which the dollar amount of such limit (with respect to mental 
     health services) is equal to or greater than the dollar 
     amount of the aggregate lifetime limit on plan payments for 
     medical or surgical services.
       (B) No lifetime limit.--With respect to a group health plan 
     offered by a health insurance issuer, that does not apply an 
     aggregate lifetime limit to plan payments for medical or 
     surgical services covered under the plan, such plan may not 
     apply an aggregate lifetime limit to plan payments for mental 
     health services covered under the plan.
       (2) Annual limits.--
       (A) In general.--With respect to a group health plan 
     offered by a health insurance issuer, that applies an annual 
     limit to plan payments for medical or surgical services 
     covered under the plan, if such plan also provides a mental 
     health benefit such plan shall--
       (i) include plan payments made for mental health services 
     under the plan in such annual limit; or
       (ii) establish a separate annual limit applicable to plan 
     payments for mental health services under which the dollar 
     amount of such limit (with respect to mental health services) 
     is equal to or greater than the dollar amount of the annual 
     limit on plan payments for medical or surgical services.
       (B) No annual limit.--With respect to a group health plan 
     offered by a health insurance issuer, that does not apply an 
     annual limit to plan payments for medical or surgical 
     services covered under the plan, such plan may not apply an 
     annual limit to plan payments for mental health services 
     covered under the plan.
       (b) Rule of Construction.--
       (1) In general.--Nothing in this section shall be construed 
     as prohibiting a group health plan offered by a health 
     insurance issuer, from--
       (A) utilizing other forms of cost containment not 
     prohibited under subsection (a); or
       (B) applying requirements that make distinctions between 
     acute care and chronic care.
       (2) Nonapplicability.--This section shall not apply to--
       (A) substance abuse or chemical dependency benefits; or
       (B) health benefits or health plans paid for under title 
     XVIII or XIX of the Social Security Act.
       (c) Small Employer Exemption.--
       (1) In general.--This section shall not apply to plans 
     maintained by employers that employ less than 26 employees.
       (2) Application of certain rules in determination of 
     employer size.--For purposes of this subsection--
       (A) Application of aggregation rule for employers.--all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 of the Internal Revenue Code 
     of 1986 shall be treated as 1 employer.
       (B) Employers not in existence in preceding year.--In the 
     case of an employer which was not in existence throughout the 
     preceding calendar year, the determination of whether such 
     employer is a small employer shall be based on the average 
     number of employees that it is reasonably expected such 
     employer will employ on business days in the current calendar 
     year.
       (C) Predecessors.--Any reference in this subsection to an 
     employer shall include a reference to any predecessor of such 
     employer.

     SEC. 3. DEFINITIONS.

       For purposes of this Act:
       (1) Group health plan.--
       (A) In general.--The term ``group health plan'' means an 
     employee welfare benefit plan (as defined in section 3(1) of 
     the Employee Retirement Income Security Act of 1974) to the 
     extent that the plan provides medical care (as defined in 
     paragraph (2)) and including items and services paid for as 
     medical care) to employees or their dependents (as defined 
     under the terms of the plan) directly or through insurance, 
     reimbursement, or otherwise.
       (B) Medical care.--The term ``medical care'' means amounts 
     paid for--
       (i) the diagnosis, cure, mitigation, treatment, or 
     prevention of disease, or amounts paid for the purpose of 
     affecting any structure or function of the body,
       (ii) amounts paid for transportation primarily for and 
     essential to medical care referred to in clause (i), and
       (iii) amounts paid for insurance covering medical care 
     referred to in clauses (i) and (ii).
       (2) Health insurance coverage.--The term ``health insurance 
     coverage'' means benefits consisting of medical care 
     (provided directly, through insurance or reimbursement, or 
     otherwise and including items and services paid for as 
     medical care) under any hospital or medical service policy or 
     certificate, hospital or medical service plan contract, or 
     health maintenance organization contract offered by a health 
     insurance issuer.
       (3) Health insurance issuer.--The term ``health insurance 
     issuer'' means an insurance company, insurance service, or 
     insurance organization (including a health maintenance 
     organization, as defined in paragraph (4)) which is licensed 
     to engage in the business of insurance in a State and which 
     is subject to State law which regulates insurance (within the 
     meaning of section 514(b)(2) of the Employee Retirement 
     Income Security Act of 1974). Such term does not include a 
     group health plan.
       (4) Health maintenance organization.--The term ``health 
     maintenance organization'' means--
       (A) a Federally qualified health maintenance organization 
     (as defined in section 1301(a) of the Public Health Service 
     Act),
       (B) an organization recognized under State law as a health 
     maintenance organization, or
       (C) a similar organization regulated under State law for 
     solvency in the same manner and to the same extent as such a 
     health maintenance organization.
       (5) State.--The term ``State'' means each of the several 
     States, the District of Columbia, Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Northern Mariana 
     Islands.
                                 ______