Mental Health Parity Legislation, Cost-Sharing and Substance Abuse Treatment Admissions

39 Pages Posted: 11 Nov 2008 Last revised: 18 Jul 2010

See all articles by Dhaval Dave

Dhaval Dave

Bentley University - Department of Economics; National Bureau of Economic Research (NBER) - NY Office

Swati Mukerjee

Bentley University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2008

Abstract

Treatment is highly cost-effective in reducing an individual's substance abuse (SA) and associated harms. However, data from Treatment Episodes (TEDS) indicate that per capita treatment admissions substantially lagged behind increases in heavy drug use from 1992-2007. Only ten percent of individuals with clinical SA disorders receive any treatment, and almost half who forgo treatment point to accessibility and cost constraints as barriers to care. This study investigates the impact of state mental health and SA parity legislation on treatment admission flows and cost-sharing. Fixed effects specifications indicate that mandating comprehensive parity for mental health and SA disorders raises the probability that a treatment admission is privately insured, lowering costs for the individual. Despite some crowd-out of charity care for private insurance, mandates reduce the uninsured probability by a net 2.4 percentage points. States mandating comprehensive parity also see an increase in total treatment admissions. Thus, increasing cost-sharing and reducing financial barriers may aid the at-risk population in obtaining adequate SA treatment. Supply constraints mute effect sizes, suggesting that demand-focused interventions need to be complemented with policies supporting treatment providers. These results have implications for the effectiveness of the 2008 Federal Mental Health Parity and Addiction Equity Act in increasing SA treatment admissions and promoting cost-sharing.

Suggested Citation

Dave, Dhaval and Mukerjee, Swati, Mental Health Parity Legislation, Cost-Sharing and Substance Abuse Treatment Admissions (November 2008). NBER Working Paper No. w14471. Available at SSRN: https://ssrn.com/abstract=1297701

Dhaval Dave (Contact Author)

Bentley University - Department of Economics ( email )

175 Forest Street
Waltham, MA 02452-4705
United States

National Bureau of Economic Research (NBER) - NY Office

365 Fifth Avenue, 5th Floor
New York, NY 10016-4309
United States

Swati Mukerjee

Bentley University - Department of Economics ( email )

175 Forest Street
Waltham, MA 02452-4705
United States
781-891-2956 (Phone)
781-891-2896 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
23
Abstract Views
606
PlumX Metrics