Coverage for mental health treatment: do the gaps still persist?

Consumers have long faced high out-of-pocket costs for mental health and substance abuse treatment in private health insurance plans, the predominant form of insurance coverage in the United States. Nominal mental health benefits may have improved from the mid-1990s onwards, as many states passed mental health parity mandates and other employers voluntarily improved coverage. However, the rapid rise of managed behavioral health care organizations (MBHOs) may have effectively offset these gains in nominal coverage.

We examine how effective mental health benefits, as measured by actual out-of-pocket expenses, compares to coverage for non-mental health treatment and how this has changed in recent years.

We used detailed data on health care use and expenses from the nationally representative, Medical Expenditure Panel Survey (MEPS) to describe the distribution of out-of-pocket expenses for mental health and non-mental health ambulatory visits and prescription drug fills and demonstrate how this changed between 1996 and 2003. In addition, we use two-limit tobit regression models to descriptively examine the factors associated with higher out-of-pocket costs for ambulatory mental health treatment.

While out-of-pockets shares generally decreased over the 1996-2003 period, from 39 to 35 percent of total expenses for ambulatory mental health visits and from 31 to 26 percent for non-mental health ambulatory visits, the ratio of out-of-pockets costs is still significantly higher for mental health care. Out-of-pocket expenses per visit fell as the number of non-mental health visits increased but out-of-pocket expenses for mental health visits rose with more visits. Out-of-pocket expenses for visits to specialty mental health providers were substantially higher than for non-psychiatrist physicians. Though prescription drug spending increased substantially, the percent paid out-of-pocket did not change for mental health and non-mental health related fills.

Our results suggest that expenses for ambulatory mental health visits, especially for specialty providers, effectively remain less well covered than other medical visits.

Continued high out-of-pocket expenses for mental health treatment may impede access to mental health treatment, especially for those who need greater treatment intensity.

Mental health parity may not ensure that coverage for mental health services is, in actuality, equal.

Additional research is needed in understanding relative changes in nominal vs. actual or effective coverage.