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Study says mental health parity law doesnt break the bank

Insurances costs see little increase after state decison four years ago

Six years ago, Oregon mental health advocates pushed for a parity law that required health insurers to provide the same benefits to patients with mental illness as they gave to patients with physical problems. At the time, health insurers argued that their costs could skyrocket if mental health parity was required.

In 2007, Oregon instituted one of the country's most ironclad mental health parity laws. And a new study shows that, despite the concerns of insurers, the increased mental health and addiction coverage has resulted in very little increased cost.

The study, published in the September issue of the American Journal of Psychiatry, compared more than 100,000 Oregonians between 2005 and 2008 whose insurance companies were subject to the new parity laws with almost 20,000 who were in self-insured plans, which are not subject to the laws.

Lead author John McConnell, a health economist at Oregon Health and Science University, says he expected to find that with limits removed, mental health patients would access more care. But that didn't happen, McConnell says. He found virtually no difference in the health care usage between those who were granted greater coverage versus those who were not covered by the parity law.

That may or may not be good news, McConnell says.

McConnell says there may be a number of explanations why people did not use more mental health services. Some were already getting their needs met before parity was instituted. Before parity, most health insurers allowed a limited number of annual visits to a mental health provider, sometimes a dozen, sometimes as many as 20. For many patients, that was enough, McConnell says.

Some people, McConnell says, might have run into another obstacle: a growing shortage of mental health providers, including an acute local shortage of child psychiatrists.

Others, McConnell says, still won't access mental health care because of personal or cultural reasons.

'The good news is for people who have wanted better parity and who have advocated for a national parity law, this doesn't look like it's going to break the bank,' McConnell says. 'The bad news is, maybe (parity) isn't really the panacea for removing some of the stigmatization around behavioral health care. We know there's a lot of unmet need out there.'

In the end, McConnell says, parity mostly affects a small group of patients who need long-term outpatient treatment. He estimates that to be about 5 percent of all mental health patients.

McConnell says his study should put at ease those concerned about a federal mental health parity act that resembles Oregon's and went into effect in October 2009.

Chris Bouneff, executive director of the Oregon chapter of the National Alliance on Mental Illness, says McConnell's study confirms what mental health advocates had been saying all along.

'The vast majority of people who have mental health needs, it's going to be very short term,' Bouneff says.