WASHINGTON -- New rules being drafted by the Clinton
administration could allow many employers to exempt themselves from
landmark law intended to expand health insurance benefits for
millions of Americans with mental illnesses, federal officials and
mental health advocates said.
When President Clinton signed the bill, the Mental Health Parity
Act, on Sept. 26, 1996, he said it was "morally right" to "require
insurance companies to set the same annual and lifetime coverage
limits for mental illness" and physical illness.
"No more double standards," he said then.
But 10 weeks before the law takes effect, the administration has
become embroiled in a bitter dispute over how to enforce it.
The White House is trying to satisfy both mental health advocates
and employer groups, and that may be impossible. At the moment, the
mental health groups are unhappy and are trying to persuade the
administration to limit use of the exemption.
The law, passed last year with Clinton's support, seeks to curb
discrimination in insurance. It says that group health plans may not
impose lower limits on mental health benefits than on medical and
surgical benefits for treating cancer, heart disease and other
Such disparities are extremely common. A typical employer-
sponsored health plan may have a lifetime limit of $1 million on
regular medical benefits, but $50,000 on mental health benefits.
The law allows an exemption if the new mental health benefits
increase the cost of a group health plan or coverage by 1 percent or
more. But the law does not define cost, nor does it specify how the
exemption process will work. Administration officials said they
hoped that most employers would find it easier to comply with the
than to seek exemptions.
While administration officials had not made final decisions, they
said the new rules would probably allow employers to obtain
exemptions by estimating their future costs using 1997 data.
Chris Jennings, a White House aide who coordinates health policy
for Clinton, said, "We will not set up a new government bureaucracy
to review and approve every plan that wants an exemption." Rather,
he said, employers can hire actuaries to assess whether their costs
will increase at least 1 percent.
The administration's approach has infuriated advocates for the
mentally ill, psychiatrists, psychologists and some state health
officials, who say it will eviscerate the 1996 law.
Shelley S. Stewart, deputy director of federal relations at the
American Psychiatric Association, said that employers should be
required to comply with the law throughout 1998 before being allowed
to seek exemptions.
"If employers abide by the law," she said, "they will find that it
is not as costly as they expect."
Sen. Paul Wellstone, a co-author of the 1996 law, said the idea of
allowing companies to get exemptions by estimating the costs of
compliance was "in direct contradiction to the spirit and letter of
the legislation passed last year."
In an interview Monday night, Wellstone, a Minnesota Democrat,
said: "I know exactly what we intended. This is the law of the land,
and companies should live under it. If companies want to come back
after a year, and if they can show us empirical evidence that their
costs have gone up by X percent, then and only then should they be
able to get any kind of exemption. These exemptions should not
become a big loophole."
But employers, insurers and managed-care companies insist that
they should be able to get exemptions based on projections of their
1998 costs. …