Behavioral Health Insurance Parity

Does Oregon's Experience Presage the National Experience with the Mental Health Parity and Addiction Equity Act?

Published in: American Journal of Psychiatry, v. 169, no. 1, Jan. 2012, p. 31-38

Posted on RAND.org on December 31, 2010

by K. John McConnell, Samuel H N Gast, M. Susan Ridgely, Neil Wallace, Natalie Jacuzzi, Traci Rieckmann, Bentson H McFarland, Dennis McCarty

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OBJECTIVE: The Mental Health Parity and Addiction Equity Act of 2008 prohibits commercial group health plans from imposing spending and visit limitations for mental health and substance abuse services that are not imposed on medical-surgical services. The act also restricts the use of managed care tools that apply to behavioral health benefits in ways that differ from how they apply to medical-surgical benefits. The only precedent for this approach is Oregon's state parity law, which was implemented in 2007. The goal of this study was to estimate the effect of Oregon's parity law on expenditures for mental health and substance abuse treatment services. METHOD: The authors compared expenditures for commercially insured individuals in four Oregon health plans from 2005 through 2008 and a matched group of commercially insured individuals in Oregon who were exempt from parity. Using a difference-in-differences analysis, the authors analyzed the effect of comprehensive parity on spending for mental health and substance abuse services. RESULTS: Increases in spending on mental health and substance abuse services after implementation of Oregon's parity law were almost entirely the result of a general trend observed among individuals with and without parity. Expenditures per enrollee for mental health and substance abuse services attributable to parity were positive, but they did not differ significantly from zero in any of the four plans. CONCLUSIONS: Behavioral health insurance parity rules that place restrictions on how plans manage mental health and substance abuse services can improve insurance protections without substantial increases in total costs.

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