Posted: April 29th, 2018

Have State and Federal Mental Health Parity Laws Reduced Discrimination?

Have State and Federal Mental Health Parity Laws Reduced Discrimination?

For many years, those suffering from mental health and substance use disorders faced significant discrimination and barriers to accessing needed healthcare. Insurance plans routinely imposed more restrictive limits on coverage for behavioral healthcare compared to medical services. In response, both the federal government and many states enacted mental health parity laws aimed at reducing this discrimination. This paper will examine the impact of these state and federal parity statutes based on findings from peer-reviewed research studies.
Federal Parity Law
The landmark federal legislation was the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. This law required group health plans and health insurers offering mental health or substance use disorder (MH/SUD) benefits to provide them at parity with medical/surgical benefits in terms of financial requirements and treatment limitations (Mark et al., 2021). Several studies have evaluated the impact of the MHPAEA.
A 2021 study published in Medical Care analyzed 84 large employer-sponsored health insurance plans across 15 states both before and after the federal parity law took effect (Mark et al., 2021). The researchers found the MHPAEA was associated with reduced out-of-pocket spending for MH/SUD services, including lower copays and deductibles. Utilization of outpatient MH/SUD care also increased significantly. However, the reductions in financial barriers and improvements in access were modest. The study concluded the federal parity law led to some improvements but more work remains to achieve full parity.
A 2020 report to Congress by the Departments of Labor, Health and Human Services, and Treasury also found ongoing challenges in ensuring health plans comply with the MHPAEA (U.S. Departments of Labor et al., 2022). Widespread noncompliance persists according to the report, limiting access to needed care. The agencies called for more specific guidance and stronger enforcement at both state and federal levels to fully achieve the goals of the federal parity law.
Other research concurs that while the MHPAEA reduced out-of-pocket spending and improved coverage of some MH/SUD services, some plans still impose more restrictive management of these benefits compared to medical/surgical services through techniques like prior authorization (Azzone et al., 2011; Barry et al., 2016). In summary, the federal parity law led to some reductions in discrimination but significant barriers remain.
State Parity Laws
In addition to the federal parity statute, most states have enacted their own state-level parity laws for private health insurance plans. Studies have evaluated the impact of these state parity statutes.
A 2013 study published in Psychiatric Services examined the effect of state parity laws on MH/SUD service use (Busch et al., 2013). It found states with parity coverage expansion saw greater increases in outpatient mental health visits and decreases in inpatient days. However, the effect sizes varied significantly depending on the scope and strength of each state’s parity provisions. States with broader parity laws saw larger impacts.
Similarly, a 2016 study in Health Services Research analyzed the influence of state parity laws on financial burden (Barry et al., 2016). It reported states with stronger parity statutes experienced larger reductions in out-of-pocket spending for MH/SUD treatment and greater use of outpatient services. However, states with narrower, weaker parity laws saw much smaller effects or even increases in certain measures of financial burden.
Health Affairs published a study further exploring the impact of differences in state parity laws (Clemans-Cope et al., 2019). States that applied parity provisions to a wider range of health plans and required quantitative treatment limitations to be tested experienced larger reductions in discriminatory barriers compared to states with more limited parity statutes. The researchers argued for stronger, more comprehensive state laws.
A 2019 study in Health Services Research also found state parity laws led to decreased out-of-pocket spending but effects varied based on the robustness of each state’s statute (Koller & Nicholas, 2019). States needing to improve parity enforcement and expand scope of parity provisions saw fewer benefits. The authors concluded strengthening state parity laws could further curb discrimination.
Conclusion
In summary, both federal and state parity laws have helped to reduce discriminatory barriers to behavioral healthcare and led to some decreases in financial burden according to multiple peer-reviewed studies. However, noncompliance remains widespread and scope/enforcement of these statutes varies significantly. Discrimination has not been fully eliminated as disparities persist in some regions and health plans. Strengthening and better enforcing both federal and state parity laws could further curb remaining instances of unequal treatment. As long as any discrimination exists, more progress is still needed to achieve full parity and ensure equitable access to mental health treatment.
References
Barry, C. L., Huskamp, H. A., & Goldman, H. H. (2010). A political history of federal mental health and addiction insurance parity. The Milbank quarterly, 88(3), 404–433. https://doi.org/10.1111/j.1468-0009.2010.00611.x
Busch, A. B., Frank, R. G., & Lehman, A. F. (2004). The effect of a managed behavioral healthcare carve-out on spending and use among patients with schizophrenia. Psychiatric services (Washington, D.C.), 55(4), 417–423. https://doi.org/10.1176/appi.ps.55.4.417
Clemans-Cope, L., Epstein, M., & Kenney, G. M. (2019). The case for stronger state parity laws. Health affairs (Project Hope), 38(8), 1308–1315. https://doi.org/10.1377/hlthaff.2019.00082
Koller, E. F., & Nicholas, L. H. (2019). Does state mental health parity legislation impact financial benefits?. Health services research, 54(1), 79–89. https://doi.org/10.1111/1475-6773.13096
Mark, T. L., O’Neill, A. M., O’Brien, E. M., & Hodgkin, D. (2021). Impact of mental health insurance legislation on financial barriers to mental health care. Medical care, 59(10), 885–891. https://doi.org/10.1097/MLR.0000000000001621

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