Willamette Week | News| Health Care

For 16 long years, state Sen. Lenn Hannon, a folksy moderate downstate Republican, struggled with his alcoholism. At times he even clambered into his vehicle when he'd had a few too many, despite having voted to stiffen penalties for drunk drivers. His behavior was, he concedes, "the height of hypocrisy."

Last year, Hannon checked into a residential alcohol rehabilitation program in Medford, where he spent several weeks coming to grips with his problem. But while he learned how to stay away from the bottle, Hannon, an Ashland insurance agent, was startled to discover that many Oregonians can't afford similar treatment. "I was very fortunate to have an insurance policy that covered 100 percent of the cost," he told WW. "Most people don't."

As a result, Hannon is sponsoring a bill designed to put treatment for mental illness and chemical dependency on a par with treatment for physical ailments--a proposal that pits a broad coalition of health professionals and advocates against the state's powerful insurance and business interests. Although Hannon faces potent opposition inside the capitol, in the realm of public opinion he clearly is backing a winner.

A poll commissioned by the Oregon Medical Association, which was released March 3, shows that 85 percent of Oregon voters favor parity for mental illness, while 66 percent favor parity for chemical dependency. In a particularly striking result, 75 percent say they would be willing to pay higher premiums for such coverage. The poll was conducted last month.

Senate Bill 529, the Mental Health Parity Act, would force insurance companies to deal with disorders such as depression, schizophrenia and alcoholism the same way they deal with chronic physical illnesses such as asthma and diabetes--without imposing arbitrary limits on the amount of money spent, the length of a patient's stay or the number of visits allowed. "This bill is an effort to broaden that access," Hannon says.

In recent years, parity has become a rallying cry for the growing number of people diagnosed with mental disorders or recovering from substance abuse, and legislation mandating equal coverage for mental and physical disorders has passed in 19 other states.

A similar bill was introduced during the 1997 Oregon Legislature, but it died without a hearing. This time, however, the proposal has some new allies. Besides Hannon, backers now include psychiatrists, psychologists, social workers and advocacy groups representing the mentally ill, the elderly and the disabled. In addition, the influential Oregon Medical Association, which gave the bill lukewarm support last session, has agreed to put the proposal at the top of its agenda. "This is a very high priority for us," says Jim Kronenberg, associate executive director of the OMA. "It's an issue that keeps coming back."

Oregon law already requires insurance companies to provide mental-health and substance-abuse coverage to the tune of at least $10,500 for adults and $12,500 for children over a two-year period.

These minimums, set in 1983, were intended to provide a "floor," below which insurance companies could not sink. In practice, advocates say, the floor has become a ceiling, and individual insurance companies have become leery of offering expanded coverage, lest they attract subscribers with a history of mental illness and chemical dependency.

As a result of galloping medical inflation, patients are increasingly bumping up against their insurance limits, precipitating a difficult dilemma: pay the bills out of their own pockets for as long as they can or cut short their treatment and risk relapse. "It's a huge societal expense, not to mention the personal costs," says Portland psychiatrist Connie Powell, an enthusiastic supporter of the bill. She has seen several patients get sucked into a downward spiral of terminating treatment, losing their equilibrium and losing their jobs. "It's very disturbing to watch," she says.

Proponents argue that improving coverage for treatments of mental illness and substance abuse will save on other health-care costs, because these conditions tend to aggravate physical illnesses. In a 1997 OMA survey, Oregon doctors reported that 20 percent of their patients had a physical problem that was made worse by psychological factors. For example, a patient with an untreated anxiety disorder is at higher risk for high blood pressure, a heart attack or a stroke. "If you treat the underlying mental condition, the physical health will improve," says the OMA's Kronenberg.

The bill's supporters think they can muster enough votes in the House and Senate to pass SB 529. But they're up against some tough competition: Insurance companies, Associated Oregon Industries and Oregon's conservative Republican leadership are all opposed to the bill.

The argument against the bill is partly philosophical. "In general, we have historically been opposed to mandates," says Jan Van Dyke, assistant vice-president for corporate communications at Regence BlueCross BlueShield of Oregon.

But the argument clearly is also about money. While estimates vary, everyone agrees the proposal would increase insurance premiums. According to an actuarial report commissioned by the bill's backers, SB 529 would cause premiums to jump 1.2 percent, or $1.27 per member per month. Industry estimates are a bit higher. Regence actuaries, for example, reckon SB 529 would increase costs by 2 percent to 5.5 percent. At Kaiser Permanente, preliminary estimates suggest an increase of 1.5 percent to 2 percent, according to lawyer and lobbyist Bruce Bishop, who says very few subscribers exceed the current limits.

A 1997 study conducted by the National Institutes of Health reported that states that introduced parity legislation have seen total health-care costs rise by less than 1 percent as a result.

While insurance companies agree these are not catastrophic increases, they worry about piling any new costs on top of medical inflation already running at 15 percent annually. "Where does it end?" asks Van Dyke.

The bill's opponents also say the parity bill could be the last straw for small businesses. "Kaiser is concerned that some employers will reduce benefits or drop coverage altogether," says Bishop. Other industry observers say that concern is misplaced. "[This threat] is always bandied about," says a local health-care insider.

As WW goes to press, SB 529 remains bottled up in the Senate Health and Human Services Committee. Chairman Bill Fisher, a Roseburg Republican, told WW he would not schedule a hearing. "As committee chairman, I have to make some of the tough decisions," he said. "I believe I have the backing of the leadership."

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Willamette Week | originally published March 3, 1999