While supporters of the more expansive House version of legislation establishing parity for coverage of mental as well as physical illnesses when insurance policies cover both are lauding the bill as superior to a narrower one passed by the Senate, the House version faces strong opposition.

The 268-148 vote on the Paul Wellstone Mental Health and Addiction Equity Act of 2007, H.R. 1424, sets up talks with the Senate, which passed a much narrower bill, S. 558, last Sept. 18 by unanimous consent.

The Bush administration’s support for the compromise Senate bill was made clear March 7 by Bradford Campbell, assistant secretary in charge of the Labor Department’s Employee Benefits Security Administration.

In remarks to a self-insurance conference here, Campbell argued that the House bill would not level the playing field between mental health benefits and other types of benefits, and it is “very clearly a broad mandate.”

Campbell said the bill also includes “very confused” language regarding states’ ability to bypass the Employee Retirement Income Security Act, which normally prohibits states from regulating employee benefit plans.

Two provisions in the bill seem to allow states to impose mandates, while another seems to try to maintain the status quo, Campbell said.

“You could only imagine” the results if states, and even municipalities, are given the ability to impose their own benefits mandates, he said.

Employers would be required, among other things, to keep extensive records on where employees worked to ensure compliance with local requirements. Campbell warned. “These are the kinds of things that ERISA was intentionally designed to prevent.”

The Senate bill was a compromise reached after negotiations with businesses, the insurance industry and mental health advocates. Business and insurance groups had fought previous versions, arguing the proposals would drive up insurance costs.

The House bill specifies that if a plan provides mental health benefits, it must cover mental illnesses and addiction disorders listed in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, which is used by mental health professionals.

The House bill does not apply to health plans sponsored by an employer with 50 or fewer employees. Nor does it apply to coverage in the individual insurance market.

According to officials of America’s Health Insurance Plans, which represents health insurers, and the American Benefits Council, which represents employers, the Senate bill gives insurers more leeway on the types of mental disorders they would have to cover.

The House bill was sponsored by Rep. Patrick Kennedy, D-R.I., who has battled depression, alcoholism and drug abuse, and Rep. Jim Ramstad, R-Minn., a recovering alcoholic who is Kennedy’s Alcoholics Anonymous sponsor.

The Senate bill was sponsored by Kennedy’s father, Sen. Edward Kennedy, D-Mass., Sen. Pete Domenici, R-N.M., and Sen. Mike Enzi, R-Wyo.

That means that the younger Kennedy will negotiate with his father on a compromise measure.

The White House issued a statement before the House passed its bill March 5, indicating that the administration would not support the House bill because “it would effectively mandate coverage of a broad range of diseases.”

One of the key issues is that the Senate bill provides for what the American Benefits Council calls “a very targeted and narrow preemption of state insurance, as well as to self-insured plans, that assures a uniform federal rule of the specific parity requirements” of the Senate bill, which include treatment limits, financial requirements, cost exemptions and the like.

According to ABC officials, the Senate bill is a measure that will avoid an all-or-nothing approach by employers.

As voiced by Neil Trautwein, health care lobbyist for the National Retail Federation, “The House bill will put us in the awkward position of either covering everything in the professional manual–or covering nothing at all.”

In a letter to members of the House released before the vote, James Klein, ABC president, said the Senate bill is better because it mandates the benefits covered in or out of network, ensures the ability to appropriately manage mental health care through medical management practices and the formation of networks of health care providers, and by helping ensure and protect national uniformity of plan administration and remedies.

Karen Ignagni, president and CEO of AHIP, said after the House vote that the bill “would turn back the clock on advances in the quality of care and impose excessive costs on patients and employers.”

She called the bill “well-intentioned,” but said it “would undermine the progress that has been achieved in improving behavioral health benefits through coordinated-care strategies.”

She said the health insurance industry supports the Senate bill “because it is a balanced approach that would preserve access to health plans’ medical management and quality improvement programs.”