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Oregon's Mental Health Parity Law Improves Coverage at Minimal Cost, Study Shows

09/12/11  Portland, Ore.

State experience may presage outcomes of new federal law

Oregon’s mental health parity law, which prohibits commercial health plans from imposing limits on mental health and substance abuse services that are not also imposed on medical-surgical services, has improved insurance coverage without substantial cost increases, according to a study led by K. John McConnell, Ph.D., a health economist at Oregon Health & Science University.

The Oregon law, one of the most comprehensive state parity laws, is of particular relevance to assessing potential impacts of the Mental Health Parity and Addiction Equity Act (MHPAEA), federal legislation that took effect in July 2010.

“Oregon's law is a very close analog to the new federal parity law, specifically in the way that it restricted plans from aggressively managing the behavioral health benefit,” said McConnell. “This had never been done before – parity laws have routinely been coupled with very strong managed care – and the concern was that spending would go up significantly. Instead, we found that the expected spending growth didn’t materialize.”

The study compared expenditures for commercially insured individuals in four Oregon health plans from 2005 to 2008 and a matched group of commercially insured individuals in Oregon who were exempt from parity. The pooled analysis included 100,328 individuals subject to parity and 19,364 individuals in self-insured plans for comparison. Results showed increases in spending on mental health and substance abuse services after implementation of Oregon’s parity law were almost entirely the result of generally observed trends in mental health utilization. Expenditures attributable to the parity law were positive, but close to zero.

The study appears in The American Journal of Psychiatry online.

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