Do State Parity Laws Reduce the Financial Burden on Families of Children with Mental Health Care Needs?

Department of Epidemiology and Public Health, Yale University School of Medicine, Division of Health Policy and Administration, 60 College Street, New Haven, CT 06520, USA.
Health Services Research (Impact Factor: 2.78). 07/2007; 42(3 Pt 1):1061-84. DOI: 10.1111/j.1475-6773.2006.00650.x
Source: PubMed


To study the financial impact of state parity laws on families of children in need of mental health services.
Privately insured families in the 2000 State and Local Area Integrated Telephone Survey National Survey of Children with Special Health Care Needs (CSHCN) (N=38,856).
We examine whether state parity laws reduce the financial burden on families of children with mental health conditions. We use instrumental variable estimation controlling for detailed information on a child's health and functional impairment. We compare those in parity and nonparity states and those needing mental health care with other CSHCN.
Multivariate regression results indicate that living in a parity state significantly reduced the financial burden on families of children with mental health care needs. Specifically, the likelihood of a child's annual out-of-pocket (OOP) health care spending exceeding $1,000 was significantly lower among families of children needing mental health care living in parity states compared with those in nonparity states. Families with children needing mental health care in parity states were also more likely to view OOP spending as reasonable compared with those in nonparity states. Likewise, living in a parity state significantly lowered the likelihood of a family reporting that a child's health needs caused financial problems. The likelihood of reports that additional income was needed to finance a child's care was also lower among families with mentally ill children living in parity states. However, we detect no significant difference among residents of parity and nonparity states in receipt of needed mental health care.
These results indicate that state parity laws are providing important economic benefits to families of mentally ill children undetected in prior research.

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    • "Data from the Child Health Insurance Research Initiative indicates that CHIP enrollees with special needs reported difficulty accessing mental health and substance abuse treatment services (VanLandeghem et al. 2006). Research shows that parity laws can reduce the financial burden of a family having a child with a mental health need (Azrin et al. 2007; Barry and Busch 2007). Thus, access to behavioral health treatment for children enrolled in these programs is important to minimizing the personal and societal costs of mental health and substance use disorders for a vulnerable population. "
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    ABSTRACT: The Children's Health Insurance Program (CHIP) plays a vital role in financing behavioral health services for low-income children. This study examines behavioral health benefit design and management in separate CHIP programs on the eve of federal requirements for behavioral health parity. Even before parity implementation, many state CHIP programs did not impose service limits or cost sharing for behavioral health benefits. However, a substantial share of states imposed limits or cost sharing that might hinder access to care. The majority of states use managed care to administer behavioral health benefits. It is important to monitor how states adapt their programs to comply with parity.
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    • "State laws also differ in the conditions covered, with some applying to only a subset of severe or " biologically based " disorders. 2 Finally, only a handful of states cover treatment for substance use disorders (Barry and Sindelar 2007). We should note that the Employee Retirement Income Security Act (ERISA) of 1974 limits the reach of all state parity laws by exempting from state insurance mandates those firms that self-insure. "
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    ABSTRACT: This article chronicles the political history of efforts by the U.S. Congress to enact a law requiring "parity" for mental health and addiction benefits and medical/surgical benefits in private health insurance. The goal of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity (MHPAE) Act of 2008 is to eliminate differences in insurance coverage for behavioral health. Mental health and addiction treatment advocates have long viewed parity as a means of increasing fairness in the insurance market, whereas employers and insurers have opposed it because of concerns about its cost. The passage of this law is viewed as a legislative success by both consumer and provider advocates and the employer and insurance groups that fought against it for decades. Twenty-nine structured interviews were conducted with key informants in the federal parity debate, including members of Congress and their staff; lobbyists for consumer, provider, employer, and insurance groups; and other key contacts. Historical documentation, academic research on the effects of parity regulations, and public comment letters submitted to the U.S. Departments of Labor, Health and Human Services, and Treasury before the release of federal guidance also were examined. Three factors were instrumental to the passage of this law: the emergence of new evidence regarding the costs of parity, personal experience with mental illness and addiction, and the political strategies adopted by congressional champions in the Senate and House of Representatives. Challenges to implementing the federal parity policy warrant further consideration. This law raises new questions about the future direction of federal policymaking on behavioral health.
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    • "Studies also have found no impact of mental health benefit expansions on total spending (Ma and McGuire 1998; Goldman, McCulloch, and Sturm 1998; Goldman et al. 2006). The prior literature consistently indicates that the only major effect of parity is it significantly reduces the financial burden (e.g., out-of-pocket expenditures) of seeking mental health care (Barry and Busch 2007; Goldman et al. 2006). A criticism of prior studies on the effects of state parity mandates is their failure to account for small business and ERISA "
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    ABSTRACT: State mental health parity laws improve equity in private insurance coverage for mental and physical health services, but prior research shows no effect on service use. We study whether state parity differentially affects individuals by employer size since large firms are often exempt from state health mandates due to the Employee Retirement Income Security Act. We also examine whether state parity laws differentially affect use among individuals with low incomes or in poor mental health. We find that individuals in smaller firms are more likely to use services post-parity implementation and that this effect is concentrated among low-income individuals.
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