Historically, insurance coverage for mental health and substance abuse (MH/SA) services has been more restrictive than that for general medical conditions.1 These more restricted benefits, such as service or spending limits and higher cost-sharing, have been criticized for their inflexibility in covering care needed for the sickest patients.2,3 This also conflicts with the principal role of insurance to insure against large financial losses due to illness.
Parity typically mandates insurance coverage for psychiatric disorders to be equal that for general medical conditions. Despite considerable legislative activity towards parity, full parity has often been elusive. The 1998 federal Mental Health Parity Act (MHPA) prevented group health plans from placing lower annual or lifetime dollar limits on mental health benefits compared to medical or surgical benefits,4 and covered all psychiatric diagnoses described in the Diagnostic and Statistical Manual of Mental Disorders—IVth edition (DSM-IV)5 However, group health plans could impose some mental health benefit restrictions that differed from medical or surgical benefits—such as limits on the number of covered visits or different cost sharing arrangements.4,6 Additionally, many states have enacted parity legislation for private insurance plans. These state laws differ in whether substance abuse is included in the legislation or if other exemptions apply.7 Most states in fact have not legislated full parity. Even when states enact strong parity statutes, they do not apply to a large proportion of workers covered by self-ensured employers who are exempt under the federal Employee Retirement Income Security Act (ERISA).
Concerns about parity focus on increases in insurance costs. However, managed mental health care organizations, particularly behavioral health carve-outs, have changed the way mental health services and costs are controlled8 and have been widespread since the 1990's.9 Under managed behavioral health care, evidence has accrued that parity does not have to cause major cost increases.10-14 It therefore became increasingly evident that benefit limits may not be necessary for containing costs under managed behavioral health care arrangements.3,15,16 The use of managed behavioral health care organizations, however, creates concerns that patients may not receive needed care.14
Still unclear in this policy debate is the net effect on quality between the opposing forces of parity (which leads to an expansion of insurance benefits) and managed care (which uses various mechanisms to restrain benefits).17 Parity may improve quality by expanding access to needed treatments, but not if managed care organizations are too severe in their rationing of health care through the use of stringent prior authorization procedures, aggressive limiting of provider panels, or risk sharing for providers.
In June 1999 President Clinton directed the Office of Personnel Management (OPM) to implement parity in the Federal Employees' Health Benefits Program, (FEHBP) thereby expanding MH/SA coverage in the program. The FEHBP, with approximately 8.5 million enrollees, is the largest U.S. employer-based insurance program. FEHBP plans are not subject to ERISA exemptions, nor state parity laws. Additionally, the FEHBP parity is full parity and therefore more comprehensive than many state parity laws.
In this paper, part of the first national evaluation of comprehensive parity, we examine the association between parity implementation and changes in the major depressive disorder (MDD) treatment quality for enrollees in six geographically diverse FEHBP plans.
MDD was chosen as a tracer condition for several reasons. It is prevalent18 and associated with considerable functional impairment,18-20 including lost work productivity,21-23 and death.24 Also, while the value of MDD treatment has improved in the 1990's, 25 it continues to be an undertreated illness.18,26