Assessing state parity legislation*

Heterogeneity and the effect of mental health parity mandates on the labor market

Health insurance benefit mandates are believed to have adverse effects on the labor market, but efforts to document such effects for mental health parity mandates have had limited success. I show that one reason for this failure is that the association between parity mandates and labor market outcomes vary with mental distress. Accounting for this heterogeneity, I find adverse labor market effects for non-distressed individuals, but favorable effects for moderately distressed individuals and individuals with a moderately distressed family member. On net, I conclude that the mandates are welfare increasing for moderately distressed workers and their families, but may be welfare decreasing for non-distressed individuals.

A comparative analysis of mandated benefit laws, 1949-2002

OBJECTIVE

To understand and compare the trends in mandated benefits laws in the United States.

DATA SOURCES/STUDY SETTING

Mandated benefit laws enacted in 50 states and the District of Columbia for the period 1949-2002 were compiled from multiple published compendia.

STUDY DESIGN

Laws that require private insurers and health plans to cover particular services, types of diseases, or care by specific providers in 50 states and the District of Columbia are compared for the period 1949-2002. Legislation is compared by year, by average and total frequency, by state, by type (provider, health care service, or preventive), and according to whether it requires coverage or an offer of coverage.

DATA COLLECTION/EXTRACTION METHOD

Data from published tables were entered into a spreadsheet and analyzed using statistical software.

PRINCIPAL FINDINGS

A total of 1,471 laws mandated coverage for 76 types of providers and services. The most common type of mandated coverage is for specific health care services (670 laws for 34 different services), followed by laws for services offered by specific professionals and other providers (507 mandated benefits laws for 25 types of providers), and coverage for specific preventive services (295 laws for 17 benefits). On average, a mandated benefit law has been adopted or significantly revised by 19 states, and each state has approximately 29 mandates. Only two benefits (minimum maternity stay and breast reconstruction) are mandated in all 51 jurisdictions and these were also federally mandated benefits. The mean number of total mandated benefit laws adopted or significantly revised per year was 17 per year in the 1970s, 36 per year in the 1980s, 59 per year in the 1990s, and 76 per year between 2000 and 2002. Since 1990, mandate adoption increased substantially, with around 55 percent of all mandated benefit laws enacted between 1990 and 2002.

CONCLUSIONS

There was a large increase in the number of mandated benefits laws during the managed care "backlash" of the 1990s. Many states now use mandated benefits to prescribe not only what services and benefits would be provided but how, where, and when services will be provided.

The effects of state mental health parity legislation on perceived quality of insurance coverage, perceived access to care, and use of mental health specialty care

OBJECTIVE

To assess the impacts of recent state mental health parity legislation on perceived quality of health insurance coverage, perceived access to needed health care, and use of mental health specialty services by individuals with likely need for mental health care.

DATA SOURCES

The study sample came from two waves of a national household survey first fielded in 1997-1998 and then in 2000-2001. The analysis used a subset of the sample.

STUDY DESIGN

The study took the Difference-in-Difference-in-Difference approach to investigate changes in self-perceived quality of health insurance coverage and access to needed health care, and use of mental health specialty care by the group with mental disorders (relative to those without) in states with parity legislation of different comprehensiveness (relative to the nonparity states) in the years after the law (relative to before the law).

PRINCIPAL FINDINGS

Overall, there were no significant or consistent effects of the parity legislation. Descriptive statistics showed significant changes in some (but not all) outcome variables, but these results disappeared in detailed statistical analyses by controlling for important covariates.

CONCLUSIONS

The null findings of the effects of state mental health parity mandates suggest that under ERISA (Employee Retirement Income Security Act), the scope of state parity legislation may have been restricted because of large proportion of self-insured employers. Furthermore, comprehensiveness of state legislation appears to be related to the traditional level of use of mental health specialty care, which becomes another confounder for the potential policy effects.