Mental Health Benefits Do Not Add To Cost Of Health Insurance

Expanding mental health and substance abuse insurance benefits may be possible without increasing the overall cost of employer-provided health in-surance, according to a study published in the March 30, 2006 issue of The New England Journal of Medicine.

The study, led by Howard H. Goldman, a professor of psychiatry at the University of Maryland School of Medicine, evaluated the Federal Employees Health Benefit (FEHB) Program, which has provided behavioral health parity since 2001. Under parity, coverage for mental health and substance abuse services is comparable to coverage for other health problems. Researchers noted that many policymakers and legislators have long opposed parity on the grounds that offering equal levels of coverage for disorders such asdepression and schizophrenia would be too costly.

Prior to the introduction of mental health parity, federal employees often had to pay as much as 30% to 40% of the cost of mental disorder treatment. After parity came into effect, the study found, out-of-pocket costs for patients seeking treatment for mental disorders fell. Researchers said one of the main reasons benefit costs did not increase despite these more generous benefits was due to the cost controls imposed by managed care. The study found that use of mental health services rose after the introduction of the parity policy, but researchers attributed this increase to a general trend also seen in comparison plans.

"The main argument against parity has been a concern that more generous coverage of mental health services would result in large increases in spending," said Goldman. "We found, however, that when coupled with managed care, parity between insurance benefits for mental health care and general medical care can be accomplished with improved insurance protection and without increasing total costs."