Health Plans Respond to Parity
Jan 1, 2006
Consequences for Federal Employee Health Plans
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In recent years, the push for behavioral health parity—health coverage for mental health and substance abuse care that equals coverage for general health care—has gained momentum. Concerns persist, however, that parity could invite overuse of services and drive up costs. To date, there has been no national assessment of how parity affects utilization and costs, and little is known about how insurers implement parity rules.
In 2001, the U.S. government required the Federal Employees Health Benefits (FEHB) Program to provide behavioral health benefits equal to its general health benefits. The FEHB Program insures 8.5 million federal workers, retirees, spouses, and dependents. Because it affects such a large group nationwide, the FEHB experience provides an important test case for understanding the effects of parity. A team led by researchers from RAND and Harvard Medical School assessed the effects of FEHB's parity requirement on insurers and evaluated consumers' use of services and spending.
The study analyzed the experience of 156 health plans, as well as the governmentwide BlueCross and BlueShield Service Benefit Plan:
The research team examined utilization and spending patterns in seven of the largest FEHB plans and compared them with patterns under a matched set of health plans serving large, privately insured populations but without parity benefits. Results showed that
These studies suggest that parity and managed care in combination can work to improve behavioral health care protection without increasing total costs.
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