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Uses data from the enormous UCLA/RAND managed care database to estimate costs, access, and intensity of mental health care under managed care carve-out plans with generous coverage; and simulate the consequences of removing coverage limits for mental health care as required by the 1996 Mental Health Parity Act. It shows that the assumptions used in 1996's policy debates overstated actual managed care costs by more than 300%. In the plans studied, despite increases in access (percentage of enrollees getting some care in a year), costs are much lower than were assumed, because of lower hospitalization rates and lower payments per service. Removing an annual limit of $25,000 would increase payments by only $1 per year, with children being the main beneficiaries of expanded benefits.

Originally published in: Journal of the American Medical Association, v. 278, no. 18, November 12, 1997, pp. 1533-1537.

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