HCCI Issue Brief: Impact of Mental Health Parity

The Mental Health Parity and Addiction Equity Act of 2008 (“Parity Act”) increased access to mental health and substance use services in hospitals, yet consumers continued to pay more out-of-pocket for substance use admissions than for other types of hospital admissions, finds a new Health Care Cost Institute (HCCI) report.

The issue brief is one of the first of its kind to look at hospital spending, utilization, prices, and out-of-pocket payments for mental health and substance use admissions for those younger than age 65 with employer-sponsored health insurance.

Key findings include:

• 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 for this population.
• 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.
• Jump in Spending Accompanies Higher Use: The rise in spending was influenced by a significant growth in substance abuse admissions, which rose nearly five-fold from 4 percent in 2007 to 19.5 percent in 2011.

Mental health parity is an issue employers need to be concerned about as they design things like value-based purchasing programs, wellness programs, and shared decision-making tools. At a basic level, the Partiy Act does not require that mental health services be offered as a covered benefit, but to the extent they are offered, they need to be covered at the same level as medical services.