Politics & Policy

Mental-Health Parody

Should government be making health care less affordable?

One must admire the Kennedy audacity. It is not enough that Patrick Kennedy, the Democratic congressman from Rhode Island, remained in office after driving under the influence and crashing his car into a vehicle barrier on Capitol Hill one year ago this month.

It is not enough that he gave an unlikely explanation for the incident — his second “traffic problem” in three weeks — and then ducked away into a rehab clinic to escape the spotlight. Nor is it enough even that he ran for Congress again — and won — despite evidence of a botched cover-up and witnesses putting him at the popular Hawk n’ Dove bar earlier that evening.

No, Patrick Kennedy had to crown himself with irony by testifying last Tuesday morning before the Senate Health committee on the topic of substance abuse and mental-health care. No one at the hearing wanted to touch the tense irony of Kennedy’s presence. Republicans asked him no questions after his brief, wonkish statement, and afterward reporters did not dare broach the topic.

It was pure Kennedy chutzpah, and it worked. Although the committee chairman (Senator Dad, D., Mass.) could not be present to chair the hearing, he would have been proud.

In his defense, Patrick Kennedy has worked on mental-health issues for years. He can hardly be faulted for pushing legislation in which he believes. But surely there could have been a better witness for last week’s hearing than the man who last year turned drug rehab into a joke.

Neither mental illness nor substance abuse are funny topics — many of us have experience with these conditions, either personally or through friends or family. No reasonable person doubts that they are serious conditions that require treatment. But Kennedy’s pioneering use of rehab to generate sympathy and escape media attention after his incident last May was a farce. It diminished public respect for substance-abuse care as a legitimate medical treatment, giving rise to the joke that rehab is “the last refuge of scoundrels.” It created an unfortunate example for Reps. Bob Ney (R., Ohio) and Mark Foley (R., Fla.), who would later duck into rehab when their respective personal scandals exploded — to say nothing of celebrities who have very recently done the same.

Kennedy added more fuel to this fire four months after his incident, as he was speaking out for “mental-health parity” legislation, requiring equivalent insurance coverage for mental illness as for other ailments. “I have a mental illness,” he declared in a September 2006 press conference. “I refuse to be told that my mental illness is worth any less than my asthma.”

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In Kennedy’s case, the disturbing implication is that he was no more responsible for endangering people’s lives and wrecking his car (telling the police, “I’m headed to the Capitol to take a vote…”) than for his breathing condition. But the topic of mental-health parity merits a more serious hearing than its wayward congressional sponsor would indicate. It enjoys broad bipartisan support — including that of President Bush and many conservatives in Congress. But it also represents one more step away from a free-market system of health care. It will make health insurance more expensive for everyone.

“I’m fortunate that I had health insurance,” Kennedy told me last week of his rehab experience. “There are too many Americans who don’t have the same health insurance as I do.”

The problem is that his mental-health parity bill would force most Americans to pay for the same insurance he has, or else go without. Current law, passed in 1996, forbids insurers from setting lower annual and lifetime dollar caps for mental illness than they do for other treatments. But most insurance companies still place stricter limits and require higher co-pays for mental-health treatments. The new proposal would forbid such practices, which mental-health advocates consider discriminatory.

The reality is much more complex, however. Mental illness is not strictly equivalent to physical illness — its manifestations are different, and its treatments tend to be more costly and longer in duration. There is debate over the question of cost, but no one can dispute the bottom line: Insurance companies do not price mental-health coverage differently for arbitrary reasons, because they somehow despise the mentally ill. They do so because they exist in order to make money, and their actuaries calculate a higher risk and higher costs to provide mental-health coverage.

If required by law to fix the same price for two products that bear different costs, insurance companies will react by raising the price of the cheaper product — ordinary physical health coverage. And in the 39 states where all plans are required to cover mental health, consumers will have absolutely no escape from the inevitable price increase. Whether they need mental-health coverage or not, every insured person will pay higher premiums for this improved version of mental-health parity. This is why the Senate bill under consideration exempts businesses with fewer than 50 employees — they expect premiums to rise, and rise they will.

The new mental-health parity bill will not usher in socialized medicine, but it will take health care in precisely the opposite direction it needs to go. State-coverage mandates for a wide variety of both physical and mental conditions have already created an atmosphere of higher premiums in which more Americans go without insurance. At a time when Congress should be looking to help people circumvent these mandates, they are instead about to pass a bill that will exacerbate the problem.

The Council for Affordable Health Insurance (CAHI) estimates that there are 1,031 state mandates requiring insurance plans to cover 61 conditions and treatments, including such non-health-related items as marriage counseling and in vitro fertilization. Another 545 mandates require health care coverage for 33 types of special providers, including chiropractors, acupuncturists, and even social workers. The effect of these mandates is to force millions of Americans to pay extra for coverage they will never need or use. And the insurance industry never loses — it passes costs along to the consumer. This is why they have little problem endorsing the Senate version of the bill.

State mental-health parity laws are by far the most expensive of all mandates, increasing premiums on average by 5 to 10 percent, by CAHI’s estimates. But even though most other mandates increase prices by 1 percent or less, the cumulative effect of the 20 or more mandates required by most states (Massachusetts has 43, Maine has 46, and Maryland has 60) is to crush the average consumer looking for health insurance.

It will also crush the average worker. “[I]f there is a government mandate to provide coverage,” reads a 2005 study by the National Bureau of Economic Research, “employers will either require employees to pay for at least a portion of the increase or shift more staffing to part-time positions that are often exempt from such mandates.”

Employers will also cut or slow the growth of workers’ wages. The nonpartisan Congressional Budget Office reported 15 years ago that rising health-care premiums were absorbing most of employees’ increase in real compensation. This condition has persisted, causing real cash wages in the United States to stagnate, even as real compensation has boomed.

President Bush will likely soon sign a bill that takes the health-insurance field further in the wrong direction — toward higher prices and thus more demand for total government control.

Patrick Kennedy’s public parody aside, lawmakers should be aware that their well-intentioned legislative efforts toward mental-health parity are making health insurance less accessible and affordable for everyone.

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