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June 15, 2007 at 05:52 PM
Witnesses from the American Benefits Council and the ERIC Industry Committee testified here today against a bill that could create new standards for employer-sponsored behavioral health benefits.
The bill, H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act, would add a section to the Employee Retirement Income Security Act requiring employers with more than 50 employees that offer any mental health benefits to cover the same mental health and “substance-related disorder” conditions covered by the Federal Employees Health Benefits Plan.
Rep. Patrick Kennedy, who introduced the bill, H.R. 1424, with Rep. Jim Ramstad, R-N.M., said during a hearing of the House Energy and Commerce Committee health subcommittee that studies have shown that FEHBP mental health parity standards adopted in 2001 have not increased overall FEHBP mental health and addiction treatment costs.
“This finding is consistent with virtually every study of state parity laws as well,” Kennedy said, according to a written version of his testimony. “But frankly, the very fact that we need to debate how much it costs to end insurance discrimination is offensive. Nobody is asked to justify the cost-effectiveness of care for diabetes or heart disease or cancer.”
Edwina Rogers, a vice president at the ERISA Industry Committee, Washington, a group that represents large employers, said at least one study has found that FEHBP mental health parity efforts have increased plan costs.
In addition, basing H.R. 1424 parity standards on FEHBP benefits could give some carriers an unfair advantage, Rogers said.
“More than 56% of FEHB beneficiaries are enrolled in Blue Cross Blue Shield plans,” Rogers said. “This, in essence, means that Blue Cross plans will always be in compliance [with H.R. 1424 requirements], while other plans will be forced to conform to the models adopted by Blue Cross. This has serious implications for plan competition and flexibility, and may lead to increased costs.”
James Klein, president of the American Benefits Council, Washington, testified that his group has significant concerns about H.R. 1424 provisions that would authorize states to set stricter standards than the bill itself sets.
The provision “opens the door for the states to develop separate enforcement and remedy schemes,” Klein said.
