The impact of mental health parity laws on birth outcomes

Prior studies have found that poor mental health during pregnancy is associated with poor birth outcomes, but little is known about the ability of mental health care access and treatment to counteract these effects. I use a difference-in-differences strategy exploiting the staggered enactment of state mental health parity laws in 25 states from 1995 to 2002 to identify the impact of mental health care access on the probability of an adverse birth outcome. These state mental health parity laws are insurance mandates requiring coverage of mental health care be equivalent to physical health care. Using birth records, I find that, among the group of mothers most likely to have private insurance, introduction of a mental health parity law in a state decreased the probability of an adverse birth outcome. Furthermore, I find that the parity laws decreased the likelihood that a pregnant woman hospitalized for delivery would receive a mental illness diagnosis.