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Senate Set to Consider Health Insurance Legislation

State Insurance Parity Laws At Risk

May 5, 2006

Next week, the Senate is scheduled to take up legislation that would place at risk the 39 existing state laws that require health plans to cover treatment for mental illness on the same terms and conditions as all other illnesses.  The legislation, known as the Health Insurance Marketplace Modernization and Affordability Act (S 1955), is intended to make health insurance more affordable to small employers.  While NAMI supports this laudable goal, the bill includes provisions that would allow most employers to offer health plans that do not have to comply with existing state parity requirements, or numerous state consumer protection laws. 

It is expected that a key procedural vote on the bill could occur as early as next week. The vote would be on a motion to cut off debate and limit the number of amendments that could be offered by Senators (known as cloture).  In order to succeed, a motion for “cloture” must get 60 votes.  It is unclear at this point whether or not there are enough Senators willing to support the motion for cloture.

Action Required

Advocates are strongly encouraged to contact their Senators to urge them to oppose both the motion to cut off debate (invoke cloture) and the underlying bill (S 1955).  Please remind Senators that S 1955:

  • Would severely undermine the 39 state laws that currently require health plans to cover treatment for mental illness on the same terms and conditions as all other illnesses (insurance parity) and the 32 states that require either covering or offering of mental health benefits;
  • Would allow an insurer to bypass a state’s insurance code (including all consumer protection laws such as mental illness insurance parity and coverage requirements) simply by offering a health plan similar to that offered in one of the five largest states (three of the five largest states do not have parity laws);
  • Would strongly discourage states from enacting health care reform laws since any reform would be undermined as states lose their authority to regulate health insurance; and
  • Would preempt state laws that limit the ability of insurers to vary premiums on the basis of health status, disability, age, gender, and geography, thereby making insurance unaffordable for many older and sicker consumers.

All Senate offices can be reached by calling the Capitol switchboard at 202/224-3121 (this is a long distance call).  In the alternative, advocates can find the local numbers for the Senators through the Blue Pages in their local phone book.

Advocates can also send an e-mail message to their Senators through the website.  Click on “write your elected officials,” enter your zip code and then click on “compose your own letter.”  This will allow you to then insert the talking points listed above with the message “Please Oppose S 1955.”  Please include your local mailing address in any e-mail message.

Would S 1955 Make Insurance More Affordable for Small Employers?

The express purpose of S 1955 is to make health coverage more affordable for small business and thereby address the growing number of uninsured Americans – expected to climb to 46 million in 2007.  While the legislation would clearly allow insurers to offer stripped down health plans, there is nothing in the legislation that would require premiums to be lowered.  More importantly, there is strong evidence that the bill would result in these stripped down health plans (that would exclude equitable coverage for mental illness treatment) being purchased by employers that already offer coverage to the workers and their families.  In other words, an effort to make insurance more affordable for small employers, could result in limiting of insurance coverage for medium and large businesses as well.

Durbin-Lincoln Alternative Would Help Businesses Offer Affordable Coverage

When S 1955 comes before the Senate next week, Senators Richard Durbin (D-IL) and Blanche Lincoln (D-AR) plan to offer an alternative proposal to address the growing cost of health insurance for small firms.  Their proposal, the Small Employers Health Benefits Program (SEHBP) Act, S 2510 would make health insurance more affordable by providing for shared insurance risk through a large nationwide pool.  More importantly, the Durbin-Lincoln plan would preserve the important protections enacted in states to ensure access to comprehensive health benefits, including equitable coverage of mental illness treatment.   It would also charge higher premiums based on health status, gender, or industry, while allowing states to require greater protections.

More importantly, S 2510 avoids allowing health plans to offer the stripped policies authorized under S 1955.  Instead, small business owners, employees, and their family members would be covered by all of the consumer protections in their home states — including mental illness insurance parity and mental health coverage laws.  In addition to preserving access to comprehensive health services for consumers, S 2510 preserves the crucial role of states as health insurance regulators and laboratories of innovation.    

NAMI urges support for the Durbin-Lincoln Substitute proposal (S 2510) as an alternative to S 1955.

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