illness can be fatal, but with continued care and careful vigilance on the part of myself and my doctors, both can be treated successfully.

Unfortunately, my insurance company chooses to view these illnesses with an unequal eye. Receiving coverage for my mental illness has not been easy, fair, or complete. I learned this lesson early on when I was hospitalized for the third time for bipolar disorder. My stay exceeded the 30 days allotted to me by my insurance company by 1 day.

While I was in the midst of a severe episode, the insurance company was essentially kicking me out of the hospital. It was a horrific experience. I can only liken it to being three-quarters of the way through surgery and the insurance company coming in and saying they won't pay for your to be stitched up again.

Here again I was lucky. My family stepped in. They made an arrangement with the hospital to pay them directly for any extra days needed. That was the only way I got the care I needed. Fearful of further hospitalizations, upon discharge I applied for Medicaid so that I would not be refused future mental health treatment. Meanwhile, my insurance company has no trouble paying for any and all treatment for my blood disorder, including more tests than I care to count; no questions asked, no limits on doctor visits or hospital stays.

Over the last 5 years, my life has been more stable, with newer medications that have yielded better and more consistent results. This has allowed me to maintain full-time employment, despite the fact that I still contend with occasional bouts of depression and hypo-manic episodes; continued medication changes, 22 and counting; and all kinds of side effects to go along with both illnesses.

However, through careful monitoring and continued doctors' care, I have managed to remain out of the hospital, complete college, pursue a master's degree in social work, maintain a job in Philadelphia's public behavioral health system, manage a relationship, live independently and overall happily. For this, I can say I am very lucky.

Currently, I am under an insurance plan through my employer which affords me complete coverage for my hematologic condition, but limits the amount of outpatient doctors' visits I may have, the amount of days I can be hospitalized for and the maximum amount of money they will put out for my psychiatric care. By the way, I pay extra, about $70 a month, for the privilege of enrolling in this health plan.

While my insurance company affords me complete care for my hematologist-all I must do is pay a $10 copay at each visit-my psychiatric outpatient care costs me a minimum of $80 a visit. If I need to go into the hospital for psychiatric reasons, I can go in for 30 days a year. That is it. If I become severely depressed and need hospitalization for more than 30 days per year, I am essentially sunk. I will have to quit my very decent job that I have had for nearly 7 years and go on Medicaid to cover the hospital bill.

On the other hand, if I have to go into the hospital for hematologic reasons, I can go in for as many days as needed, no lengthy arguments with the company over the phone trying to justify my

stay or the reality of my illness. After all, a blood disorder is a real medical condition in the eyes of my insurance company.

I see no difference between my physical illness and my mental illness. My physical disorder can be fatal and requires long-term monitoring and continued care for the rest of my life. My mental disorder can be fatal and requires long-term monitoring and continued care for the rest of my life. Right now, the only difference is in the blatantly unequal and inadequate insurance coverage.

I present this testimony because I want you to understand how outrageous it is that there is no mental health insurance parity; that because of stigma, greed and lack of proper Federal legislation, I am denied equal and adequate coverage solely based on the fact that I have a mental illness.

As members of the U.S. Senate, you have a great opportunity before you to put an end to this unjust system and enable millions of people to receive the mental health coverage they desperately need by enacting the Mental Health Equitable Treatment Act of 2001. I implore you to do so for people like myself and those who have not been so lucky, for those who do not have the means on their own or the family to help them pay for the mental health care that they need in order to live healthy and productive lives.

Thank you.

[The prepared statement of Ms. Cohen may be found in additional material.]

The CHAIRMAN. Dr. Henry Harbin.

Dr. HARBIN. Good morning, Mr. Chairman and members of the committee. I am Dr. Henry Harbin, Chairman and CEO of Magellan Health Services, and I very much appreciate having the opportunity to testify today in support of Senate bill 543. I have submitted written testimony and I will just highlight some of the key points that we made in that testimony.

Today, I am representing my own company, Magellan, but also the American Managed Behavioral Health Care Association, also known as AMBHA. AMBHA is an association of the Nation's leading managed behavioral health care companies, the specialty companies. AMBHA member companies, of which Magellan is one, are collectively responsible for managing mental health and substance abuse services, and those benefits, for over 110 million individuals around the country.

Magellan is the large of these companies. We provide behavioral health, employee assistance, and human service programs to approximately 70 million Americans around the U.S. through contracts with health plans, local and State Governments, the Federal Government, unions, large employers and small employers.

For example, we contract with 33 Blue Cross/Blue Shield plans around the country, Aetna, Humana, and 60 other health plans. In addition, we have direct contracts to manage some portion of the health benefit with 20 percent of the Fortune 500 companies in America today.

As I said, I am here to express strong support for this bill, and I would like to highlight three points.

First, this bill does address a significant public health issue that has far-reaching social and economic consequences for this country.

Obviously, passage of this bill will help rectify and address these issues.

Second, I believe, as we have heard from many of the members of this committee already, that now is the time to address this issue in a comprehensive manner. Third, this legislation is a costeffective way to do it.

A couple of comments on the first issue. According to the Surgeon General's Report on Mental Health, about 20 percent of the U.S. population is affected by a mental disorder in any given year. Clearly, it has been well documented that mental illness has cost society billions of dollars in medical costs, not just in mental health, lost wages, absenteeism and lower productivity, to say nothing of the intangible costs of suffering for both the individuals themselves as well as their family members.

As a psychiatrist, I have treated hundreds of patients over my career. I have seen firsthand the detrimental impact that financial and other barriers can have on an individual's ability to access care. By offering comprehensive mental health benefits, we send the message that mental illnesses are a disease just like heart disease, cancer and others, and that treatments do work.

The NIMH testimony that has been given here in the past, as Senator Kennedy showed in the chart, has shown clearly that success rates for treatment of a lot of the major or common mental health problems surpass or are equivalent to more common medical problems. So more comprehensive mental health benefits will facilitate early access to effective mental health treatment, which in turn can result in lower medical costs, lower disability costs, and reduced absenteeism.

A recent article in the Wall Street Journal-this was referenced, I believe, by you, Senator Wellstone-was very interesting from one of the companies, Bank One. They totaled up the lost workdays for persons with depressive disorders. Over 10,000 workdays were lost to this illness alone over a 2-year period, more than 10 times the workdays lost to either high blood pressure or diabetes.

My second point is that, given the progress that has been made over the past decade in the science, diagnosis and effective treatment of mental illness, the timing is right to broaden

The CHAIRMAN. Is your point there, Doctor, that you have 10 times as much loss in workdays, and yet depression is treatable and there is no need to have that kind of result?

Dr. HARBIN. Correct. The treatment rates are very effective. There are some people who don't respond as they do in medical problems.

The CHAIRMAN. No. We understand that, but the overall treatment rates are powerful, and if we don't do it, we get this kind of disparity that you have just mentioned in your testimony.

Dr. HARBIN. That is correct.

The CHAIRMAN. Thank you.

Dr. HARBIN. Legislatures, as we know, in 34 States now have passed some form of mental health parity legislation, but a significant percentage of individuals with health insurance are covered under plans governed not by the States, but by Federal regulations such as ERISA, so that these State parity bills do not affect in some States as much as 50 percent of the insured population.

The Mental Health Parity Act of 1996, while historic and a critical first step in addressing this problem, sunsets this year, and even under its current provisions access to services remain quite limited. As the largest of the managed behavioral companies, we see this everyday in the benefits that we manage.

The CHAIRMAN. Is it your sense that there was a lot of gaming after the implementation of the legislation?

Dr. HARBIN. Well, actually, I think, Senator Kennedy, we saw a small amount of that. I think what happened was that some companies apparently sort of dropped their mental health coverage. They weren't required to offer it, if I remember correctly, under the bill, similar to this bill.

But we did see people, in order to deal with the issue, add more restrictions on day limits and copays because those were not addressed by the 1996 bill. I don't know whether you would call it gaming so much as people dealt with their costs by continued benefit constriction rather than just basically trying to manage these illnesses and treated them the same as physical disorders.

As you know, this bill will eliminate that, and that is partly why we are supportive of it. I think in some States it will make it a lot easier for health plans to administer this, having a more consistent application.

Finally, I would like to address the cost issue. I would like to share with the committee some real data from our company that demonstrates that Senate bill 543 is quite affordable.

Having extensive experience for several years managing mental health benefits both pre- and post-State parity, my organization, Magellan Health Services, is in a unique position to offer insight into what we might expect in terms of increased health premiums. As I said in my written testimony, we are operating now in 29 different States for the last several years that have passed some form of State parity. So we are a natural experiment in pre- and post-impact of what was the impact of expanding the benefits.

In our experience, the implementation of parity legislation at the State level results in only a very modest increase in the total health care premium for a commercial insurer when one starts with a typical but limited mental health benefit.

At Magellan, we have yet to see an increase of greater than 1 percent of the total health care premium as a result of State parity legislation. In fact, our experience is that cost increases typically range from as low as .02 to the highest that we have had, .08, of the health care premium.

Furthermore and I think we have heard some comments about this from some of the Senators-we have found that these modest increases are similar for both large and small employers and in rural, urban and suburban areas. I think it is a point to make that the AMBHA companies, as well as some of the specialty managed behavioral health care companies, even the ones that are not a member of AMBHA, collectively manage about 170 million Americans. These managed care services are available all around the country, in all 50 States and in rural areas.

Now, obviously, on the issue about access to networks, making sure you have got access to networks in very rural areas is difficult

both for physical medicine and mental health. It is something we are all working on, but these services are available.

The CHAIRMAN. This is enormously important, the fact that there weren't additional costs in terms of the smaller businesses. Could you elaborate on that? It interesting because we are going to hear, as we have already heard in comments earlier during the hearing, that the existing legislation obviously applies to businesses with less than 50 employees and this brings the exemption to 25. It is always an issue about how far down to go, and how much it will burden small business.

I am interested in your response on that, and I think we would like to get any additional information from you on this subject matter. I think it would be very helpful to the committee.

Dr. HARBIN. We would be happy to further query some of the managed behavioral companies about additional data here.

Our experience with parity is we as a specialty company are subcontracting with a health plan, again like a Blue Cross, Aetna, Humana, the large health plans. They are the ones who are doing the primary insurance for small and large employers. What they typically do with a specialty company like ours is whether it is a small employer or a large employer, they are contracting with us to provide a range of managed care services for all of those employers. So we are usually managing them in the similar techniques that we would for a mid-size to larger employer.

So the things that we are able to bring to bear to assist and do case management, 24-hour referrals, and build out a preferred provider network is no different, whether it is an employer with 10 people or 1,000. That is why when we looked at the impact of the increase in cost, while quite modest, we didn't see any differential there.

But we would be happy to try to provide some additional investigation, and perhaps my colleague, Dr. Regier, who is very knowledgeable about some of the broad actuarial studies, can also address this.

I would like to add, though, in terms of the final issue on the costs that none of our cost estimates take into account the potential cost savings achieved by employers in terms of having reduced medical-surgical costs, absenteeism, and disability. We are just talking specifically about the increase we have seen in the mental health spending itself. Obviously, you would expect some there just because you are lowering the copay, even if there is no change in utilization.

In conclusion, I would like to reiterate that the Mental Health Equitable Treatment Act of 2001 will eliminate benefits discrimination for those with mental illness, and will accomplish this without mandating that employers offer this coverage and without causing dramatic cost increases.

I thank you for the opportunity to provide this testimony. This is a landmark day for those of us who have been in the this profession for all of our careers and we are hopeful that all of the Senators will vote for this.

The CHAIRMAN. Thank you very much, you have been very helpful.