The Effects of Federal Parity on Substance Use Disorder Treatment | Page 1
Published Online: January 23, 2014
Susan H. Busch, PhD; Andrew J. Epstein, PhD; Michael O. Harhay, MPH; David A. Fiellin, MD; Hyong Un, MD; Deane Leader Jr, DBA, MBA; and Colleen L. Barry, PhD, MPP
In 2008, the US Congress enacted a landmark federal parity law, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), requiring health insurers to equalize private insurance coverage for mental health and substance use disorder (SUD) services with coverage for general medical services. Historically, health plans have imposed stringent limits on coverage for mental health and SUD services in the form of high cost sharing, annual inpatient day and outpatient visit limits, and lifetime dollar limits.1 In 2006, prior to implementation of MHPAEA, the majority of workers in private industry faced limits on SUD coverage. For example, 74% of workers had either annual or lifetime limits on the number of hospital days and 71% of workers had either annual or lifetime limits on the number of office visits for SUD.2 In contrast, almost all workers were offered unlimited hospital days and office visits for general medical services. In 2006, the median coinsurance level for SUD outpatient visits was 20% compared with 10% for outpatient medical services, and the median copayment for SUD outpatient visits was $25 compared with $17 for medical services.2
Although a majority of states had previously enacted laws requiring parity for coverage of mental health disorders, many fewer states included SUDs in the conditions covered under their parity laws.3 MHPAEA took effect in 2010 and requires that when a private employer with 50 or more employees offers mental health and SUD coverage, all financial requirements (deductibles, copayments, coinsurance) and treatment limits (number of annual inpatient days and outpatient visits covered by insurance) for mental health and SUD must be equal to those for general medical services. The law also extends the Mental Health Parity Act of 1996, which prohibited the use of special annual and lifetime dollar limits for mental health benefits, to include SUD benefits. Health plans that provide out-of-network coverage for general medical services must also provide equal out-of-network coverage for mental health and SUD services.
To date, no published studies have examined the effects of MHPAEA. Most prior studies on the effects of state parity laws and of a comprehensive parity directive implemented in the Federal Employee Health Benefits Program focused on mental health and SUD treatment combined or on mental health treatment only. These studies consistently found that parity did not significantly increase use or spending,4-10 except among low-income individuals,11 and that parity did lead to small but significant declines in out-of-pocket spending.8-10 Only 2 prior studies examined the effects of parity on SUD treatment alone. Azzone and colleagues12 used health plan claims data to examine the effect of the Federal Employee Health Benefits Program parity policy on spending outcomes and performance measures based on Healthcare Effectiveness Data and Information Set (HEDIS); they found a significant decline in out-of-pocket SUD spending among treatment users and a small but significant increase in identification of SUD attributable to parity. A second study by Dave and Mukerjee13 examined the effects of state parity laws, including those limited to mental health, on inpatient admissions for SUD treatment and found that parity increased treatment admissions as well as the likelihood that an admission was privately insured.
The expected effects of the MPHAEA are unclear. Because MHPAEA does not require that specific conditions be covered, health plans have some discretion in determining which conditions and services to cover under parity. Relatively low public support for SUD benefits14 has led advocates to express concern that granting insurers discretion will lead to reduced coverage for SUD services. Conversely, SUD service users typically have higher spending compared with mental health service users. When limits are eliminated, a higher share of SUD patients are likely to be affected, which may lead to increases in spending.15
Using administrative claims data from Aetna, a large national health insurance company, we study how MHPAEA affected an array of SUD use and spending outcomes, including the proportion of enrollees using any SUD treatment, total annual spending on SUD treatment per enrollee and per user of SUD treatment, total per user out-of-pocket spending on SUD treatment, and proportion of total SUD spending paid out of pocket. We also examine the proportion of health plan enrollees meeting 3 HEDIS-based SUD performance measures—identification, treatment initiation, and treatment engagement—which were originally developed by the Washington Circle.16,17 In this study, we examine the effects of the law in the first year it took effect: 2010.
DATA AND METHODS
We used a difference-in-differences study design to compare changes in outcomes among health plan enrollees 1 year before and 1 year after implementation of MHPAEA (2009-2010) with changes among a comparison group of enrollees covered by state SUD parity laws in place prior to MHPAEA (N = 298,339). Difference-in-differences estimation allows us to distinguish the effects of the federal parity law from other changes affecting medical care utilization. Because MHPAEA extends to enrollees in all privately insured firms with 50 or more employees in the United States, identifying a comparison group presents a challenge. In this study, health plan enrollees already subject to preexisting state SUD parity laws served as the comparison group. As of 2008, 10 states—Colorado, Connecticut, Kentucky, Maine, Maryland, Minnesota, New Hampshire, Oregon, Rhode Island, and Vermont—had passed parity laws that included SUD services. We therefore limited our study population to Aetna health plan enrollees in these 10 states. Under the Employee Retirement Income Security Act, enrollees in fully insured employer-sponsored health plans were subject to state parity laws, but enrollees in self-insured employer-sponsored health plans operating in these states were exempt from state parity laws. Thus, in these states only enrollees of self-insured plans were newly covered under federal parity. Prior work suggests effects of state parity laws were concentrated on individuals in fully insured plans, and these laws did not affect individuals in self-insured plans.11 Self-insured plan enrollees in these 10 states who were subject to parity for the first time served as our treatment group, whereas fully insured plan enrollees who were already subject to SUD parity at the state level served as our comparison group.
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