Parity and Out-of-Pocket Spending for Children With High Mental Health or Substance Abuse Expenditures

OBJECTIVE: The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act required health plans to provide mental health and substance use disorder (MH/SUD) benefits on par with medical benefits beginning in 2010. Previous research found that parity significantly lowered average out-of-pocket (OOP) spending on MH/SUD treatment of children. No evidence is available on how parity affects OOP spending by families of children with the highest MH/SUD treatment expenditures. METHODS: We used a difference-in-differences study design to examine whether parity reduced families’ (1) share of total MH/SUD treatment expenditures paid OOP or (2) average OOP spending among children whose total MH/SUD expenditures met or exceeded the 90th percentile. By using claims data, we compared changes 2 years before (1999–2000) and 2 years after (2001–2002) the Federal Employees Health Benefits Program implemented parity to a contemporaneous group of health plans that did not implement parity over the same 4-year period. We examined those enrolled in the Federal Employees Health Benefits Program because their parity directive is similar to and served as a model for the new federal parity law. RESULTS: Parity led to statistically significant annual declines in the share of total MH/SUD treatment expenditures paid OOP (25%, 95% confidence interval: 26% to 24%) and average OOP spending on MH/ SUD treatment (2$178, 95% confidence interval: 2257 to 297). CONCLUSIONS: This study provides the first empirical evidence that parity reduces the share and level of OOP spending by families of children with the highest MH/SUD treatment expenditures; however, these spending reductions were smaller than anticipated and unlikely to meaningfully improve families’ financial protection. Pediatrics 2013;131:e903–e911 AUTHORS: Colleen L. Barry, PhD, MPP,a Alyna T. Chien, MD, MS,bc Sharon-Lise T. Normand, PhD,de Alisa B. Busch, MD, MS,dfg Vanessa Azzone, PhD,d Howard H. Goldman, MD, PhD,h and Haiden A. Huskamp, PhDd aDepartment of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, Baltimore, Maryland; bDivision of General Pediatrics, Children’s Hospital Boston, Boston, Massachusetts; Departments of cGeneral Pediatrics, and dHealth Care Policy, Harvard Medical School, Boston, Massachusetts; eDepartment of Biostatistics, Harvard School of Public Health, Boston, Massachusetts; fMcLean Hospital, Bellmont, Massachusetts; gHealth Services Research Division, Partners Psychiatry and Mental Health; and hDepartment of Psychiatry, University of Maryland, Baltimore, Maryland