Loophole Insurance

A federal bill threatens our mental-health parity law.

A bill passed by the U.S. House of Representatives and pending in the Senate would exempt some insurers from complying with a state law enacted this year that will require coverage for mental-health care. The Small Business Health Fairness Act, HR 525, would enable creation of "association health plans" (AHPs) that would not be subject to state health insurance regulations.

"This would clearly undermine Washington state's recent success at passing legislation for a mental-health insurance parity law," says Randy Revelle, a lobbyist for the Washington State Hospital Association. The mental-health insurance parity bill, passed by the Legislature after years of effort by backers like Revelle, requires that insurance coverage for mental-health services be comparable to that for medical and surgical services. The legislation provided for a phase-in of the law by 2010, starting next year. While many insurance plans cover some psychiatric treatment, the coverage usually is limited.

AHPs would be less-costly, federally regulated plans that organizations could offer to small businesses to provide benefits for employees. AHPs would be much cheaper than normal insurance plans, and employers would have less bureaucracy to deal with. Large companies, such as Microsoft and Boeing, would continue to offer health-insurance plans subject to the parity law.

The Senate version of HR 525 has been referred to the Health, Education, Labor, and Pensions Committee, of which U.S. Sen. Patty Murray, D-Wash., is a member.


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