North Carolina took an initial step Wednesday toward joining a majority of other states that require insurance companies to cover treatment for mental illnesses the way they do physical ailments.

But before passing the measure, members of the state House decided in a close vote to limit the number of people who may receive the expanded benefits.

Supporters see the measure as an important step in reducing the stigma surrounding mental illness and helping people stay employed. The overall measure passed 116-1, and must now go to the Senate for consideration. Rep. George Holmes, a Republican from Yadkin County, provided the lone "no" vote.

"If we can get people the help they need, many times they're able to go back to work and become taxpaying citizens," Rep. Martha Alexander said in an interview before the vote. Alexander, a Charlotte Democrat, has tried since 1992 to get the House to approve the insurance law.

Until this year, Alexander's colleagues have shown limited interest in requiring insurance companies to cover depression or bipolar disorder as they do diabetes and heart disease. Currently, few private insurance policies cover mental illness or substance abuse treatment for more than short periods, and they often impose a lifetime cap that can be reached with just one hospitalization. For years, insurance companies and business groups protested that expanded coverage would drive up costs and force some employers to drop health insurance.

Other states have found that few companies drop coverage and that cost increases are minimal. For example, a 2003 study of the mental heath coverage law in Vermont found that less than one percent of companies dropped coverage, and spending by Blue Cross Blue Shield of Vermont increased 19 cents per month for each person enrolled.

But concerns about costs to small businesses were raised Wednesday by Rep. Charles Thomas, an Asheville Republican, who proposed excluding businesses with 25 employees or fewer from the requirement.

Surrounding states impose such limits, he said, and if legislators find later that it isn't needed, they can remove it.

Rep. Bill Daughtridge, a Nash County Republican, said setting the limit would spare the state's small businesses from rising costs and protect employees from the possibility that they could lose all coverage.

"Premiums go up," Daughtridge said. "Businesses have to drop insurance" or exclude some workers so they can afford to cover the rest.

The change, which was approved 60-56, significantly limits the companies that would have to comply with the law. Large companies -- most of those with 100 employees or more -- are self-insured and exempt from state mandates. With the amendment, the proposal would apply to only about one-sixth of the state's insurance market.

Those who want more people insured said mental health coverage shouldn't be denied based on the size of a worker's office.

Rep. Jennifer Weiss, a Cary Democrat, said she knew a mentally ill woman who worked for a small business that offered limited mental health coverage. She was discharged from a hospital when her coverage ran out, Weiss said, and was dead 24 hours later.

"She committed suicide," Weiss said. "We have the opportunity today to prevent that kind of thing. I don't think we should be picking and choosing which people get it and which people don't."

According to the National Conference of State Legislatures, 34 states have what is known as "mental health parity," though definitions vary. Some states limit mental health coverage to major illnesses such as bipolar disorder and schizophrenia. North Carolina's state employee health plan requires equal coverage for mental and physical illness.

The proposal to require more private insurance coverage picked up momentum this year when legislators decided to exclude treatment for drug and alcohol addiction from the mandate.

Discussions in the past few years about the public mental health system, and the massacre at Virginia Tech in April, helped focus legislators on ways to get treatment for more people, Alexander said.

"People are beginning to understand we needed to do something for our citizens," she said.

The Senate is interested in expanding private mental health coverage, said Senate leader Marc Basnight, a Manteo Democrat.

"Anything that would be an improvement in that world would certainly be beneficial," he said.