Treatment Referrals Post-prohibition of Alcohol Exclusion Laws: Evidence from Colorado and Illinois

Individuals with alcohol-related disorders often encounter barriers to accessing treatment. One potential barrier is the state alcohol exclusion laws (AELs) that allow insurers to deny coverage for injuries or illnesses caused by alcohol intoxication. Several states have repealed AELs by prohibiting them completely, including banning exclusions in health and accident insurance policies, limiting their scope, or creating exemptions.

To examine whether prohibiting alcohol exclusions in health and accident insurance policies is associated with alcohol-related treatment admissions.

We used the 2002 to 2017 Treatment Episode Data Set and obtained data from several sources to control for state-level factors. We employed a heterogeneous difference-in-differences method and an event study to compare the treatment admissions in Colorado and Illinois, two states that uniquely repealed AELs, with control states that allowed or had no AELs.

We used aggregated alcohol treatment admission for adults by healthcare referral: (i) with alcohol as the primary substance and (ii) with alcohol as the primary, secondary, or tertiary substance.

We found a significant relationship between AEL repeal and increased referrals. AEL repeal in Colorado and Illinois was associated with higher treatment admissions from 2008 to 2011 (average treatment effect on the treated: 2008 = 653, 2009 = 1161, 2010 = 1388, and 2011 = 2020). We also found that a longer duration of exposure to AEL repeal was associated with higher treatment admissions, but this effect faded after the fourth year post-treatment.

Our study reveals a potential positive association between the repeal and prohibition of AELs and increased alcohol-related treatment admissions. These findings suggest that states could enhance treatment opportunities for alcohol-related disorders by reconsidering their stance on AELs. While our study highlights the possible public health benefits of repealing AELs, it also paves the way for additional studies in this domain.