Behavioral health insurance parity for federal employees

To improve insurance coverage of mental health and substance-abuse services, the Federal Employees Health Benefits (FEHB) Program offered mental health and substance-abuse benefits on a par with general medical benefits beginning in January 2001. The plans were encouraged to manage care.

We compared seven FEHB plans from 1999 through 2002 with a matched set of health plans that did not have benefits on a par with mental health and substance-abuse benefits (parity of mental health and substance-abuse benefits). Using a difference-in-differences analysis, we compared the claims patterns of matched pairs of FEHB and control plans by examining the rate of use, total spending, and out-of-pocket spending among users of mental health and substance-abuse services.

The difference-in-differences analysis indicated that the observed increase in the rate of use of mental health and substance-abuse services after the implementation of the parity policy was due almost entirely to a general trend in increased use that was observed in comparison health plans as well as FEHB plans. The implementation of parity was associated with a statistically significant increase in use in one plan (+0.78 percent, P<0.05) a significant decrease in use in one plan (-0.96 percent, P<0.05), and no significant difference in use in the other five plans (range, -0.38 percent to +0.23 percent; P>0.05 for each comparison). For beneficiaries who used mental health and substance-abuse services, spending attributable to the implementation of parity decreased significantly for three plans (range, -201.99 dollars to -68.97 dollars; P<0.05 for each comparison) and did not change significantly for four plans (range, -42.13 dollars to +27.11 dollars; P>0.05 for each comparison). The implementation of parity was associated with significant reductions in out-of-pocket spending in five of seven plans.

When coupled with management of care, implementation of parity in insurance benefits for behavioral health care can improve insurance protection without increasing total costs.