Although Sen. Domenici’s role in the ongoing flap over the fired U.S. Attorneys has garnered New Mexico’s senior senator a good deal of unwanted attention recently, another more substantive policy matter should be of greater concern to conservatives. Polls indicate that health care is one of the most important issues on voters’ minds. To this end, the concept of making health care more affordable is a mantra that has been adopted by politicians of both parties.

Domenici — working in conjunction with the usually conservative Mike Enzi (R.-Wyo.) and the reliably left-wing Ted Kennedy (D.-Mass.) — is now leading an effort that would ultimately drive up the costs of health insurance and may even inflict harm on the very people the senators are trying to help.

The legislation, which has already passed out of one Senate committee, is known as the “Mental Health Parity Act.”

While the desire to help those with mental illness is noble, the senators’ proposal will inevitably, if inadvertently, harm both the mentally ill and the uninsured.

This bill would require health insurance policies that provide coverage for mental illness provide it in the same way that they provide benefits for other conditions. Thus, if the co-pay to see a family doctor is $20, then the co-pay to see a psychiatrist must also be $20.

In a free market, the decision of how to cover mental health benefits is left to the insurer and the insured. A mandate to require that mental health coverage be given parity eliminates that freedom. Proponents of the mandate claim that it adds little to no extra cost to health insurance. They point to a study showing that there was no costs increase in mental health benefits when mental health parity was enacted in the Federal Employee Health Benefits (FEHB) program.

The reason costs didn’t increase is that the use of mental health benefits didn’t increase either. Most of the plans in the FEHB used managed care organizations to manage the mental health benefits, suggesting that use didn’t increase because the insurance programs restricted access to benefits.

Other research, which examines programs that didn’t restrict access, suggests that mental health parity is one of the most costly of benefit mandates. Using actuarial data, the Council for Affordable Health Insurance, an insurance industry group, estimates that it can add between five and ten percent to the cost of a health insurance policy.

More expensive health insurance means that means more businesses will increase their insurance premiums or drop their insurance altogether, resulting in an increase in the number of uninsured. Another route that businesses might pursue is simply dropping their mental illness coverage from their insurance policies, meaning that employees will have less access to mental health benefits.

A reading of the Mental Health Parity Act suggests that its supporters recognize that it will lead to higher costs. The bill tries to shield small businesses from rising health insurance costs by exempting any business with fewer than fifty employees. It also exempts any business whose health insurance costs rise more than 2% due to the mental health parity mandate.

Attempts to ask any of the three Senators what they thought about the cost of the bill proved fruitless. All three Senate offices responded to our calls, made over a two-week period, by saying the staff members who could address our questions were out of the office.

Thus far, only four benefit mandates exist at federal level.

Unfortunately, benefit mandates are extremely common among the states, as most states have dozens, mandating everything from hair prostheses to massage therapists.  New Mexico, for example, has 45 such mandates while Maryland has the most in the nation with 60 and Idaho has the least with only 14.

State level mandates have become such a problem that one of the most promising — albeit unsuccessful — efforts to reform health care in recent years was led by then-House Speaker Dennis Hastert (R-IL) and Rep. John Shadegg (R-AZ), both of whom wanted to change federal law to allow individuals to purchase insurance across state lines. This effort essentially would have forced insurance companies to compete across state lines.  That, in turn, would have pressured states to tailor their health care regulations in order to compete against each other.

Costs aside, what makes federal mental health parity legislation so troubling is that it could start a trend that shifts mandates from the state to the federal level, thus closing off a potential route to reform and future cost reductions. Instead of creating new mandates, Congress should be working to cut health care costs by allowing consumers to purchase health insurance — including mental health insurance — across state lines.

Mr. Gessing is the president of the Rio Grande Foundation, a non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.

Mr. Hogberg, formerly with Capital Research Center, is a senior policy analyst at the National Center for Public Policy Research.