Legislative Bulletin: H.R. 4848, Mental Health Parity Extension

Order of Business:  The bill is scheduled to be considered on Wednesday, February 6, 2008, under a motion to suspend the rules and pass the bill.

Summary:   H.R. 4848 would extend through December 31, 2008 certain provisions relating to mental health parity coverage that previously expired on December 31, 2007.

Specifically, the bill would reinstitute federal mandates first included in the Mental Health Parity Act of 1996, and extended in subsequent legislation, requiring that annual and lifetime limits on coverage for mental health treatments equal similar limits for physical illnesses.  Group health plans failing to meet the requirements of the Mental Health Parity Act would be subject to an excise tax; however, employers with fewer than 50 employees would be exempt from the federal requirements.

H.R. 4848 would also include Medicare provider payments in the Federal Payment Levy System, which imposes a 15% levy on contractors to recover outstanding federal tax debt.  A 2004 Government Accountability Office study determined that 21,000 Medicare providers owed more than $1.3 billion in back taxes, in part because payments under Medicare Parts A and B are currently exempt from participation in the Federal Payment Levy System.  H.R. 4848 would extend the Federal Payment Levy system to Medicare Part A and B claims over a three-year period ending on September 30, 2011.

Finally, H.R. 4848 would deposit additional savings in the Physician Assistance and Quality Initiative Fund, which is used by the Centers for Medicare and Medicaid Services (CMS) to finance physician payment and quality improvement initiatives.

Possible Conservative Concerns:  Some conservatives may be concerned that the bill would raise the cost of health insurance by re-imposing a lapsed federal mandate on individual and group health plans.  Some conservatives may also be concerned that the bill could lead to further action on full mental health parity legislation (H.R. 1424; S. 558) being considered in the 110th Congress, further inflating health insurance premiums nationwide.

Committee Action:  H.R. 4848 was introduced on December 19, 2007 and was referred to the House Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and Education and Labor, where no further action was taken.

Cost to Taxpayers:  However, H.R. 4848 would reduce federal revenues by $25 million over ten years by increasing the cost of health insurance, thus leading employees with group coverage to exclude more of their income from federal income and payroll taxes.  The bill would offset that foregone revenue through the extension of Part A and B Medicare payments to the Federal Payment Levy System as described above, saving a total of $374 million over ten years.  The bill diverts the additional revenue generated in excess of the foregone income and payroll taxes ($349 million over ten years) to the Physician Assistance and Quality Improvement Fund.

Does the Bill Expand the Size and Scope of the Federal Government?  No.

Does the Bill Contain Any New State-Government, Local-Government, or Private-Sector Mandates?  Yes, the bill reinstitutes federal mandates on individual and group health insurance plans regarding the design of their benefit plans.

Does the Bill Comply with House Rules Regarding Earmarks/Limited Tax Benefits/Limited Tariff Benefits?:  A Committee report designating compliance with clause 9 of rule XXI is unavailable.

Constitutional Authority:  A Committee report citing Constitutional authority is unavailable.