The Effects of Mental Health Parity on Spending and Utilization for Bipolar, Major Depression, and Adjustment Disorders

Objective

The Mental Health Parity and Addiction Equity Act requires insurance parity for mental health/substance use disorder and general medical services. Previous research found that parity did not increase mental health/substance use disorder spending and lowered out-of-pocket spending. Whether parity’s effects differ by diagnosis is unknown. The authors examined this question in the context of parity implementation in the Federal Employees Health Benefits (FEHB) Program.

Method

The authors compared mental health/substance use disorder treatment use and spending before and after parity (2000 and 2002, respectively) for two groups: FEHB enrollees diagnosed in 1999 with bipolar disorder, major depression, or adjustment disorder (N=19,094) and privately insured enrollees unaffected by the policy in a comparison national sample (N=10,521). Separate models were fitted for each diagnostic group. A difference-in-difference design was used to control for secular time trends and to better reflect the specific impact of parity on spending and utilization.

Results

Total spending was unchanged among enrollees with bipolar disorder and major depression but decreased for those with adjustment disorder (–$62, 99.2% CI=–$133, –$11). Out-of-pocket spending decreased for all three groups (bipolar disorder: –$148, 99.2% CI=–$217, –$85; major depression: –$100, 99.2% CI=–$123, –$77; adjustment disorder: –$68, 99.2% CI=–$84, –$54). Total annual utilization (e.g., medication management visits, psychotropic prescriptions, and mental health/substance use disorder hospitalization bed days) remained unchanged across all diagnoses. Annual psychotherapy visits decreased significantly only for individuals with adjustment disorders (–12%, 99.2% CI=–19%, –4%).

Conclusions

Parity implemented under managed care improved financial protection and differentially affected spending and psychotherapy utilization across groups. There was some evidence that resources were preferentially preserved for diagnoses that are typically more severe or chronic and reduced for diagnoses expected to be less so.