Mental Health Parity

Abstract

Are the mentally ill discriminated against by health insurers? In many states -- including Michigan - it is almost impossible for an employer to buy a benefit package through a Health Maintenance Organization that does not contain limits on the mental health service benefits. Since there are no similar limits on benefits for patients with long-term or chronic medical conditions, the discrimination claim is not unreasonable. The primary reason for this disparity in benefits is the belief of employers, as well as some HMOs, that lifting the annual cap on mental health benefits may cause the mentally ill to demand more services. The belief is that this would be expensive for the insurance companies and would ultimately result in increased employer premiums. <p>The purpose of this research is to study the effect of a mental health parity law would have on mental health utilization and therefore on costs to insurance companies and ultimately employed premiums. Using a cross-sectional study design consisting of 15,822 members continuously enrolled for five years with a Midwest HMO, this study compares mental health utilization claims data before and after enactment of the Mental Health Parity Act. <p>Using a t-test to analyze the difference of means, the data indicated there was a statistically significant increase in utilization of inpatient hospital benefits and outpatient mental health benefits within both groups after the Mental Health Parity Act of 1996 took effect. However, there was not a statistically significant difference between the groups. It would appear that in a managed care environment the enactment of a mental health parity law would not necessarily increase the utilization of behavioral health services and therefore, would not significantly increase costs to an HMO or to employer groups via increased premiums.