Published online February 1, 2007
PEDIATRICS Vol. 119 No. 2 February 2007, pp. e452-e459 (doi:10.1542/peds.2006-0673)
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ARTICLE

Impact of Full Mental Health and Substance Abuse Parity for Children in the Federal Employees Health Benefits Program

Susan T. Azrin, PhDa, Haiden A. Huskamp, PhDb, Vanessa Azzone, PhDb, Howard H. Goldman, MD, PhDc, Richard G. Frank, PhDb, M. Audrey Burnam, PhDd, Sharon-Lise T. Normand, PhDb,e, M. Susan Ridgely, JDd, Alexander S. Young, MD, MSHSf,g, Colleen L. Barry, PhDh, Alisa B. Busch, MD, MSb,j and Garrett Moran, PhDa

a Westat, Rockville, Maryland
b Departments of Health Care Policy
i Psychiatry, Harvard Medical School, Boston, Massachusetts
c Department of Psychiatry, University of Maryland School of Medicine, Baltimore, Maryland
d RAND Corporation, Santa Monica, California
e Department of Biostatistics, Harvard School of Public Health, Boston, Massachusetts
f Department of Veterans Affairs, Los Angeles, California
g Department of Psychiatry, David Geffen University of California Los Angeles School of Medicine, Los Angeles, California
h Division of Health Policy and Administration, Yale University School of Medicine, New Haven, Connecticut
j Alcohol and Drug Abuse Treatment Program, McLean Hospital, Belmont, Massachusetts

OBJECTIVE. The Federal Employees Health Benefits Program implemented full mental health and substance abuse parity in January 2001. Evaluation of this policy revealed that parity increased adult beneficiaries’ financial protection by lowering mental health and substance abuse out-of-pocket costs for service users in most plans studied but did not increase rates of service use or spending among adult service users. This study examined the effects of full mental health and substance abuse parity for children.

METHODS. Employing a quasiexperimental design, we compared children in 7 Federal Employees Health Benefits plans from 1999 to 2002 with children in a matched set of plans that did not have a comparable change in mental health and substance abuse coverage. Using a difference-in-differences analysis, we examined the likelihood of child mental health and substance abuse service use, total spending among child service users, and out-of-pocket spending.

RESULTS. The apparent increase in the rate of children’s mental health and substance abuse service use after implementation of parity was almost entirely due to secular trends of increased service utilization. Estimates for children’s mental health and substance abuse spending conditional on this service use showed significant decreases in spending per user attributable to parity for 2 plans; spending estimates for the other plans were not statistically significant. Children using these services in 3 of 7 plans experienced statistically significant reductions in out-of-pocket spending attributable to the parity policy, and the average dollar savings was sizeable for users in those 3 plans. In the remaining 4 plans, out-of-pocket spending also decreased, but these decreases were not statistically significant.

CONCLUSIONS. Full mental health and substance abuse parity for children, within the context of managed care, can achieve equivalence of benefits in health insurance coverage and improve financial protection without adversely affecting health care costs but may not expand access for children who need these services.

Key Words: health care costs • health insurance • mental health • substance abuse/use • managed care

Abbreviations: MH—mental health • SA—substance abuse • OPM—Office of Personnel Management • FEHB—Federal Employees Health Benefits • PPO—preferred provider organization • HMO—health maintenance organization • CI—confidence interval

Accepted Sep 13, 2006.


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