Wellstone's landmark mental-health parity: What's ahead for the law

In a strange twist of fate, Paul Wellstone's mental health legislation — which languished in Congress for 12 years — finally was signed into law last week after it was attached as a sweetener to the Bush Administration's hastily crafted $700 billion Wall Street bailout bill. 

In the end, supporters of the bill care less about the parliamentary tactics that made it happen and more about celebrating Wellstone's dream becoming the law of the land.

"I'm extremely happy," says David Wellstone, son of the late Minnesota U.S. senator, who first introduced the mental health and addiction parity bill back in 1996.

Son David, who had taken up the cause, said his father took on parity as a civil rights issue.

"It's discrimination to treat people with a disease of the brain differently than someone who broke their arm, or who has cancer or diabetes." says Wellstone. He calls the legislation a "step into the new century" and a "first step to taking away the stigma of the people who are affected."

Bipartisan supporters championed the bill
The new law, named after Paul Wellstone, was championed by Minnesota's 3rd District Rep. Jim Ramstad, a Republican, and Rep. Patrick Kennedy, a Democrat from Rhode Island. It requires insurance companies to provide parity for existing benefits. So, insurers who are already providing mental health benefits must now cover those benefits at the same rate as physical ailments. The new law does not mandate mental health coverage.

(So, say, for example, your insurance may have a co-pay of $25 to see a doctor for a broken arm but a co-pay of $40 to $60 for a therapist or substance abuse counselor. That's not parity. The new law will change that, leveling the cost of care so consumers pay the same no matter what they see a doctor for.)

"This is huge," says Sue Abderholden, executive director of the Minnesota affiliate of the National Alliance on Mental Illness. "With this law, insurers can't have arbitrary treatment limits or financial limitations with co-pays and deductibles."

The law goes into effect next Oct. 3, one year from the date it was signed into law. But, because coverage under many insurance policies is tied to the calendar year, many consumers won't see a change in their plans until Jan. 1, 2010.

The cost? Advocates say monthly tab is 'cheap cup of coffee'
Advocates say the financial impact of the new parity law on insurers is estimated to be about $1.20 per member per month ("the cost of a cheap cup of coffee," says David Wellstone). The Congressional Budget Office tagged the parity bill's cost to the federal government at $3 billion to $4 billion over 10 years in lost tax revenue. (The idea is that as a result of paying more in benefits, employers would drop people's salaries, and therefore the feds would see a drop in payroll taxes. It's a claim some say is an industry-generated scare tactic that kept the bill from passing for the past 12 years.)

In any case, so far, Minnesota's business and insurance industry leaders are mum on whether or not they oppose the new mental health parity law. Many of them are still figuring out how, or if, it will affect them.

For starters, Minnesota already has a parity law, in place since 1995. (So, too, do 41 other states.) That statute, however, covers only state-administered health plans and traditional insurance companies, HMOs, etc. — about half of the state's insured population.

Another 40 percent of Minnesotans, more than 2 million people, are not covered by the state's parity law because they receive health benefits from their employer's self-insurance plans, which are regulated by the federal government. (See accompanying chart.)

The new federal parity law closes that loophole, making self-insurers line up with the rest of the state's health plans.

Companies that self-insure tend to be large. Think 3M, Target, Medtronic, etc.

Companies with 50-plus employees eligible
But companies with as few as 50 employees are eligible. Self-insuring allows companies to be their own insurance company, structuring their own benefits set and choosing what they want to cover and how much to charge employees.

While these companies contract with such traditional health groups as Medica, Blue Cross and Health Partners to administer the health programs, it's the company who pays the claims, and takes the associated risks.

According to Carolyn Pare of the Buyers Health Care Action Group, an association of self-insured businesses, parity is already common among her membership.

"Mental health parity has not been a big issue for (members)," says Pare. "Most of the big self-insurers have been offering a certain amount of parity for a long time."

Pare says her members structure their health benefits to attract and retain the best and brightest employees. And, she says, employees want and need mental health care.

Health company lawyers and others will be sorting out the implications of the new law in the coming days, assessing the true impact of the legislation, and where state law intersects or conflicts with the new federal requirements.

But for the true believers who stayed with the Wellstone bill to see it become law, the journey isn't over yet. The next step is mandating coverage for mental illness by all health insurance companies.

David Wellstone thinks it's entirely possible.

"There's going to be a lot of health care reform in the next administration, and covering mental health and addiction have to be talked about," says Wellstone.

Marisa Helms can be reached at mhelms (at) minnpost.com.