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Details on the Senate Effort to Pass Mental Health Parity

August 7, 2007

Recent Efforts to Move S 558 Through the Senate

On August 3, Senators Domenici, Kennedy and Enzi attempted to move a revised version of their legislation through the Senate by a process known as “unanimous consent,” i.e., to have the Senate immediately pass the bill without further debate or amendments.  Senate rules allow any single member to block this motion, in limited cases without even publicly disclosing their objection.  That is what occurred in the Senate late on August 3.  Despite this temporary setback, the sponsors and supporters of S 558 intend to try again in September.

Changes to State Preemption Rule in S 558

The bill that the sponsors of S 558 attempted to move forward last week contains a substantial revision to the provision related to federal preemption of current and future state parity laws.  This is the set of complicated rules that dictate whether and how a new federal standard for equitable coverage of mental illness treatment might supersede the 42 state parity laws that are already in effect (or any that might go into effect in the future). 

This issue of preemption caused a great deal of concern in some states where the existing parity requirement or mandated mental health coverage requirement is considered stronger than the standard in S 558.  Over the past few weeks, the sponsors of the Senate bill worked with a broad range of stakeholders, including governors, state attorneys general, state insurance departments, business and insurance groups, and parity advocates, including NAMI, to come to a consensus on this complicated issue. 

Eventually, the Senate sponsors decided that the most prudent course of action was simply to remove the preemption rule from S 558 and defer to the current rule that Congress adopted in the 1996 Health Insurance Portability and Accountability Act (HIPAA).  This rule allows states to adopt requirements or standards “above” the federal standard, so long as the state is not attempting to enforce a rule that interferes with the new federal standard for equitable coverage of mental illness treatment.

In the context of mental illness insurance parity, it means that states would not be able to enforce a state law that limits mental health benefits to a numerical limit on inpatient days or outpatient visits that does not apply to “substantially all” other medical-surgical benefits.  Likewise, a state law that specifically allows higher cost sharing, deductibles out-of-pocket limits for mental health coverage would also be superseded.  However, because the Senate bill does not contain a mandate to cover or offer mental health benefits, those state laws requiring coverage or offering of mental health benefits – whether requiring coverage of severe mental illness or a broad listing of conditions – would NOT be preempted.