Insurance, Business Lobbies Loco . . . over attempts to reform health maintenance organizations

Every year for the past five years, Tucson Democrat Herschella Horton has introduced legislation that would require insurance companies to cover mental-health care at the level they cover treatment of physical maladies.

Every year that the legislation has gotten a hearing, Sue Davis has appeared at the Legislature to testify for the bill. Davis, a career mental-health advocate, doesn't have campaign contributions or fancy lunches or the luxury of camping out full-time at the Capitol. All she has is the story of her son, Todd.

In 1983, at age 20, Todd began showing signs of mental illness. He was a student at the Massachusetts Institute of Technology, and, luckily, his health insurance covered treatment. But when the semester changed and Todd was too sick to go to school, he lost his insurance. He came home to the Valley and his parents, who enrolled him on their HMO.

For three months, the HMO covered medication and monthly visits to a psychiatrist. Then the HMO stopped the coverage.

"We were shocked," Davis recalls. "We had been paying premiums all these years. We thought we were covered."

If Todd had diabetes, he would have been covered, Davis says. But because his illness was mental--his eventual diagnosis was schizo-affected disorder, which includes symptoms of schizophrenia as well as severe depression--he was not.

But the folks from the HMO had an idea, Davis remembers. "They sent us to the public system. They told us to go to the Maricopa Medical Center, to their mental-health annex, because they had an outpatient clinic there."

Todd's been on the public dole ever since, one of the mentally ill people in the state whose care costs taxpayers more than $250 million a year.

Because of advances in medical treatment of mental illness, Todd may soon be well enough to get a job. But if he does, it's possible his health insurance won't cover his medication, which he needs to function. So it may not be cost-effective for Todd to work.

Every year, Todd's story--and the stories of others like him--isn't enough. Super Lobbyists from the insurance companies and the chambers of commerce line up in opposition, and Horton's mental-health parity bill goes down in flames.

Herschella Horton knows why. It's the "M" word. No, not mental. Mandate.
Recently, Horton met with the representatives of the insurance industry and business community who have so vociferously opposed the bill for so long. Their power, she says, is "awesome."

"We all feel for the people who are mentally ill," she recalls one business advocate as saying. "But this is a mandate. And the position of the Arizona Chamber of Commerce is, we don't like mandates."

As if the rest of the hundreds of laws the Legislature passes each year are mere suggestions.

Really, just about every law is a mandate of one kind or another, Horton says, and, she pointed out to the chamber rep, many are laws that the lobbyists representing business and industry support.

Yes, she was told, but those were laws that cut taxes. Not laws that increased insurance-company costs.

It is difficult to estimate the number of Arizonans who do not have adequate mental-health coverage. Federal law requires companies with 51 or more employees to provide equal coverage. And some smaller companies do voluntarily cover mental-health costs, recognizing that doing so can actually save them money. For example, Horton says, depression is the number one reason people miss work.

The chairs of the health committees in both the Senate and House--Sue Grace of Scottsdale and Sue Gerard of Phoenix, respectively--refuse to hear any HMO reform bills or health-care mandates. Last year, the Legislature did pass a bill mandating chiropractic care, but Governor Jane Dee Hull vetoed it.

As of press time, rumors were swirling about who will introduce what this year. Democratic Senator George Cunningham may have an HMO reform package. Republican Representative Debra Brimhall may have a bill that would put HMO issues on the ballot, before the people. And, of course, Herschella Horton will introduce her bill again.

What is the impact of Super Lobbyists in this case? Hard to say. Many elected officials in these parts simply don't like mandates. It's a political philosophy that no amount of lobbying from either side is going to change. But it is true that the insurance and chamber of commerce lobbyists are among the most moneyed, the most ubiquitous, the most powerful of all the lobbyists at the Capitol. And it is true that when she talks about her bill, Horton never mentions her colleagues in the House and Senate. She's up against the Super Lobbyists. If she can convince them, the legislators will follow.

Of Governor Hull, Horton says only, "She's got a lot of [campaign] cash that came in from the HMOs. I'm not sure where that puts her, other than they've got her ear."

Paul Johnson is more direct.
Johnson, the Democrat who challenged Hull in last year's gubernatorial election, spent his entire campaign pointing out how bad health care in Arizona is and how much money the health-care industry contributed to Hull's campaign.

The HMOs "give a lot of money, and what they want out of elected officials is silence and inaction," Johnson says. "They don't need people to come out for them. They just need people not to come out against them. Leave the system the way that it's going. And if you do, their profits will skyrocket, and they'll skyrocket because they're going to take it out of the services they're giving to patients."

Johnson says his campaign received thousands of calls from Arizonans who are unhappy with their HMOs.

Herschella Horton knows that the only hope for passing her mental-health parity bill lies in her ability to convince people that the costs associated with her bill will not be prohibitive.

Many people believe mental-health treatment always involves long, expensive periods of institutionalization. Not so anymore. "We have new medications now that we didn't have before. And people get better. They don't have to be in the hospital as long," Horton says.

Anecdotal evidence wasn't getting them anywhere, so last year the mental-health advocates commissioned an analysis by Coopers and Lybrand to demonstrate the likely costs to businesses under Horton's bill.

As Horton expected, the figures were low. According to Coopers and Lybrand, there would be a 4 percent increase in employers' costs for inclusion of both mental-health and drug-abuse coverage. For businesses with five employees or less, the cost would be $11.70 per month for all five. And some of these costs could easily be passed on to the employee.

That's hardly a staggering mandate. Yet Horton says that the lobbyists and legislative leaders believe that to agree to any mandate--no matter how reasonable, no matter how humane--opens the door for more to slip through.

Not surprisingly, the insurers disagree with the Coopers and Lybrand estimate. Gay Ann Williams, executive director of the Arizona Association of HMOs, whose members include the state's seven largest managed-care providers, says a provider's costs could increase by 15 percent or more.

But Horton's not giving up. Her bill actually passed out of the House Banking and Insurance Committee last year, although it died after that.

The committee victory came against long odds. Here's the complete list of people at the committee hearing, for and against the bill:

Pro-mental-health parity:
Charlie Stevens, Arizona Psychological Association; Jan Tatman, representing Arizona Psychological Association; Sue Davis, representing herself; Analisa Stewart, Mental Health Association of Arizona; Jack Harvey, Mental Health Advocates Coalition of Arizona; Elly Anderson, Arizona Alliance for the Mentally Ill; Dan Steffy, representing himself; Max Dine, M.D., Mental Health Association of Arizona; Joe Abate, Arizona Association of Behavioral Health Programs, Arizona Psychiatric Society, and Samaritan Behavioral Health Services; Steve Isham, Mentally Ill Kids in Distress.

And against mental-health parity:
Samantha Fearn, National Federation of Independent Business; Michael Green, Arizona Restaurant Association; David Childers, Health Insurance Association of America; Don Isaacson, State Farm Insurance Company; Gay Ann Williams, Arizona Association of HMOs; Ed Wren, Pacificare; Carol Cure, Golden Rule Insurance Company; Steve Barclay, CIGNA Health Care of Arizona and Mayo Health Plan, Arizona; Laurie Lange, Arizona Hospital and Healthcare Association; Greg Hing, American Council of Life Insurance; Barbara Benson, Arizona Association of Industries; Ron Stuht, Tucson Metro Chamber of Commerce; Brian McAnallen, Arizona Chamber of Commerce; Kevin DeMenna, Aetna Health Plans of Arizona and US Healthcare.

Although they oppose her pet bill, Horton says she does respect some of the insurance lobbyists, like Don Isaacson and Gay Ann Williams. Their abilities exceed the value of their campaign contributions, she maintains.

"They're people that I know and that I have a great deal of respect for," Horton says. "And I think that perhaps that's part of their power. They're extremely powerful. They do an outstanding job of representing their clients. Well, my clients are the people."

After meeting with the legislation's opponents, Horton drafted her sixth attempt at a mental-health parity bill. She's not compromising.

"The parts that we agree on are in the bill. The parts that we do not agree on are in the bill. It's a full parity bill," she says. Horton hopes that this year, the facts and figures--and stories like Todd's--will change the minds of the Super Lobbyists.

"Maybe, maybe this year they will not oppose it."

The Players
And their contributions to statewide and legislative candidates

Against Representative Horton's mental-health parity bill . . .

Samantha Fearn, National Federation of Independent Business. $0. PAC: $3,545.

Super Lobbyist Michael Preston Green, Fennemore Craig. His client on this issue: Arizona Restaurant Association PAC: $13,100.

David Childers, Childers and Low. He gave $7,735. His client on this issue: Health Insurance Association of America: $0.

Super Lobbyist Don Isaacson, Ridge and Isaacson. He gave $9,801. His client on this issue: State Farm Insurance: $0.

Gay Ann Williams, Arizona Association of HMOs. She gave $1,186.74. Her association gave nothing but spent $6,296 in 1997 and $5,748 in 1998 for "Wellness Day at the Legislature" for legislators and staff.

Ed Wren, PacifiCare. Wren gave $1,850. PacificCare's PAC gave $750.
Carol Cure, Golden Rule Insurance Company. Cure gave $650. PAC gave $1,045.
Steve Barclay, CIGNA Health Care of Arizona and Mayo Health Plan, Arizona. Barclay gave $6,410. CIGNA's PAC gave $4,940; its employees another $5,150. Mayo employees gave $2,350.

Laurie Lange, Arizona Hospital and Healthcare Association. Lange gave $3,220. The association's PAC gave $16,245.

Greg Hing, American Council of Life Insurance: $0.
Barbara Benson, Arizona Association of Industries. Benson gave $355. Other AAI employees gave $1,590. The association's PAC gave $2,310.

Ron Stuht, Tucson Metro Chamber of Commerce. Stuht gave $50. Other chamber employees gave $745. The Tucson chamber's PAC gave $950.

Brian McAnallen, Arizona Chamber of Commerce. He gave $0. Chamber employees gave $3,837.

Kevin DeMenna, DeMenna and Associates. DeMenna gave $6,735. His clients on this issue: Aetna and US Healthcare: $775 through its employees.

For Horton's bill . . .

Super Lobbyist Charlie Stevens, Stevens and Leibow. He gave $7,870. His client on this issue: Arizona Psychological Association: $2,050.

Jan Tatman, Arizona Psychological Association. She gave $50.
Sue Davis representing herself: $0.
Analisa Stewart, Mental Health Association of Arizona: $0.
Jack Harvey, Mental Health Advocates Coalition of Arizona: $0.
Elly Anderson, Arizona Alliance for the Mentally Ill. She gave $430.
Dan Steffy, representing himself: $0.
Max Dine, Mental Health Association of Arizona. He gave $100

Joe Abate, Arizona Association of Behavioral Health Programs, Arizona Psychiatric Society, and Samaritan Behavioral Health Services. He gave $4,445. Groups: nothing.

Steve Isham, Mentally Ill Kids in Distress. He gave $10.


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