Parity for Whom? Exemptions and the Extent of State Mental Health Parity Laws
- Presenter:
Chair: Ching-to Albert Ma; Discussant: Christopher Carpenter Tue June 6, 2006 13:45-15:15 Room 313
The fact that private insurance coverage is typically more restrictive for mental health than for other types of medical care was the impetus for the 1996 Mental Health Parity Act (MHPA). While this Federal law was hailed by some as landmark legislation, it is fairly weak in terms of its effect on employers and the health benefits they offer. In the years since the MHPA was enacted, there has been considerable state-level legislative activity aimed at enhancing mental health benefits in private insurance policies, with many states passing laws that go far beyond the MHPA. However, the number of workers who are subject to these parity laws is limited by the fact that self-insured employer-sponsored health plans are not subject to state regulations and several state laws provide further exemptions for small firms. Using repeated cross-section data from a set of nationally representative employer surveys conducted between 1997 and 2003, we examine trends in the number of insured workers affected by different types of parity laws. The data are from the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC). The MEPS-IC surveys provide detailed information on firm characteristics and health insurance offerings, which allow us to explicitly account for the effect of exemptions for different types of firms. The results show that the percentage of private sector workers potentially affected by strong state parity legislation increased steadily over this period. The growth in potential coverage varied regionally, and by firm size. However, the exemptions for small firms and those that self-insure substantially reduced the number of workers actually affected by these laws. Roughly half of workers potentially covered by state parity mandates are actually affected by the laws. The dilution of parity legislation by these exemptions is one possible reason why prior studies have found these laws to have little effect on access to care and utilization.
