Health Insurance Parity for Behavioral Health Treatment and Labor Market Outcomes

Policies to ensure health insurance coverage for those seeking behavioral health services, either for mental health (MH) or substance use disorder (SUD), have been enacted at both the state and federal level.  Mandating treatment coverage could lead to reduced probability of employment, or under partial parity or parity-if-offered laws could lead to employers dropping coverage for these services.  Alternatively, parity could reduce absenteeism and turnover to the extent that employers continue to provide coverage and parity increases the generosity of this coverage.

In this study we employ the National Survey of Drug Use and Health restricted geocoded data from 2004-2012 to examine whether increasing health insurance parity for behavioral health services impacted treatment and labor market outcomes among those with major depression or SUD.  We find little evidence that parity reduced the probability of group insurance coverage or employment; though the effects are imprecisely estimated for both state level changes and the 2010 interim rule enacted under the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008.  With regard to service use and other labor outcomes, we find that state parity laws increased the probability of MH treatment receipt among those with major depression who were covered by group insurance by 23.5% relative to the baseline period, and decreased the number of jobs a person had in the past year by 10.6% among those who were employed.  We also find that SUD treatment receipt doubles among those with SUD who are covered by group insurance and currently employed as a result of these state parity laws.  Among this group absenteeism decreases by ½ of a day per month, with hours worked in the past week increasing by about 1.8.  With regard to federal parity, among those living in states moving from no parity to parity-if-offered as specified in the act we find that the MHPAEA had smaller relative effects as state level parity laws on the probability of MH and SUD benefit coverage and treatment receipt.  We find some limited evidence of effects of federal parity on absenteeism for those with major depression, but no statistically discernible impacts among those with SUD.