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Mental Health Parity: An update

On Feb. 27, the Health Care Cost Institute released a report indicating that the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("Parity Act") increased access to mental health and substance use services in hospitals. However, consumers continued to pay more out-of-pocket for substance use admissions than for other types of hospital admissions.

The "Parity Act" enhanced the 1996 Mental Health Parity Act by extending parity to substance use treatment. Under the "Parity Act," large group health plans were required to make behavioral health coverage rules similar to medical/surgical benefit rules. Large group plans were also required to make copayments, deductibles, coinsurance and out-of-pocket maximums for behavioral health care equivalent with the most common medical/surgical treatments.

The report, entitled "The Impact of the Mental Health Parity and Addiction Equity Act on Inpatient Admissions," is one of the first to look at hospital spending, utilization, prices, and out-of-pocket payments for mental health and substance use admissions. It reflects the national health care spending of more than 40 million people younger than 65 and covered by employer-sponsored insurance between 2007 and 2011. The report is focused on hospital care and looks at facility fees; it does not include payments to medical personnel. The data was contributed by a set of large health insurers who collectively represent approximately 40 percent of the U.S. private health insurance market.

Key findings of the report include the following:
  • Substance Use Admissions Surge: Substance use admissions grew by 19.5 percent in 2011. By comparison, between 2010 and 2011, mental health admissions grew by 5.9 percent and medical/surgical admissions declined by 2.3 percent.
  • Out-of-Pocket Spending: Out-of-pocket payments for substance use hospital admissions grew at twice the rate of out-of-pocket payments for mental health or medical/surgical admissions between 2010 and 2011.
  • Increase in Spending Accompanies Higher Use: The rise in spending was influenced by a significant growth in substance abuse admissions, which rose almost five-fold from four percent in 2007 to 19.5 percent in 2011.
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