Parity and Out-of-Pocket Spending for Children With High Mental Health or Substance Abuse Expenditures
OBJECTIVE: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act required health plans to provide mental health and substance use disorder (MH/SUD) benefits on par with medical benefits beginning in 2010. Previous research found that parity significantly lowered average out-of-pocket (OOP) spending on MH/SUD treatment of children. No evidence is available on how parity affects OOP spending by families of children with the highest MH/SUD treatment expenditures.
METHODS: We used a difference-in-differences study design to examine whether parity reduced families’ (1) share of total MH/SUD treatment expenditures paid OOP or (2) average OOP spending among children whose total MH/SUD expenditures met or exceeded the 90th percentile. By using claims data, we compared changes 2 years before (1999–2000) and 2 years after (2001–2002) the Federal Employees Health Benefits Program implemented parity to a contemporaneous group of health plans that did not implement parity over the same 4-year period. We examined those enrolled in the Federal Employees Health Benefits Program because their parity directive is similar to and served as a model for the new federal parity law.
RESULTS: Parity led to statistically significant annual declines in the share of total MH/SUD treatment expenditures paid OOP (−5%, 95% confidence interval: −6% to −4%) and average OOP spending on MH/SUD treatment (−$178, 95% confidence interval: −257 to −97).
CONCLUSIONS: This study provides the first empirical evidence that parity reduces the share and level of OOP spending by families of children with the highest MH/SUD treatment expenditures; however, these spending reductions were smaller than anticipated and unlikely to meaningfully improve families’ financial protection.
- CSHCN —
- children with special health care needs
- DD —
- FEHB —
- Federal Employees Health Benefits
- ICD-9-CM —
- International Classification of Diseases, Ninth Revision, Clinical Modification
- MHPAEA —
- Mental Health Parity and Addiction Equity Act
- MH/SUD —
- mental health and substance use disorder
- NQTL —
- nonquantitative treatment limitation
- OON —
- OOP —
- Accepted November 15, 2012.
- Copyright © 2013 by the American Academy of Pediatrics