Mandating that insurance policies treat addiction and mental health on par with other illnesses does not raise health costs -- the primary concern of many parity opponents -- according to a comprehensive new study that also found that parity did not result in greater utilization of services when coupled with managed care.

The results were a mixed bag for parity advocates, who have long claimed that parity would not increase costs, but also hoped that more people with addictions and mental illnesses would seek treatment if it were more available. But researchers led by Howard H. Goldman, M.D., Ph.D., of the University of Maryland School of Medicine put a positive spin on the findings, which they said "suggest that parity ... when coupled with management of care, is feasible and can accomplish its objectives of greater fairness and improved insurance protection without adverse consequences for health-care costs."

The National Mental Health Association said the study "decisively lays to rest the myth that providing mental-health parity increases overall health-care costs," and called on federal lawmakers to require parity for all people covered by health insurance.

"This is exciting confirmation that providing equal coverage for all diseases makes sense. People who need care get it, and people who do not need care don't abuse the system," said David Rosenbloom, Director of Join Together.

A team of researchers commissioned by the U.S. Department of Health and Human Services compared seven health plans under the Federal Employees Health Benefits program (FEHB) -- which has been required to provide parity coverage for addiction and mental-health problems since 2001 -- with similar health plans that do not require parity. 

When researchers looked at patients who used addiction and mental-health services, they found that spending by insurers fell in three of the FEHB plans and did not change significantly in the other four. To control costs, most of these plans contracted with behavioral-health carve-out companies.

The researchers also found that use of addiction and mental-health services increased in just one of the seven FEHB plans, while utilization of benefits decreased in another FEHB plan and stayed about the same in the five others. The authors noted that utilization only rose in a preferred provider organization (PPO) that was the only plan studied that did not use a managed-care carve-out vendor.

"Secular" Trends Considered
Significantly, the study accounted for so-called "secular" trends in spending and utilization -- in other words, general trends in health care that were not directly related to parity. "Our results demonstrate that the growth in the use of mental health and substance-abuse services and spending on these services was similar to or less than that in other large, privately insured populations," according to the study. 

"Although spending increases resulting from the implementation of parity did not occur, neither did access to mental-health and substance-abuse services increase," the authors added. "Advocates of parity might be pleased about the observed increases in the use of mental-health and substance-abuse services in all plans, but these changes were consistent with the presence of secular trends and not attributable to the implementation of parity."

The study led by Goldman was commissioned by then-President Bill Clinton in 1999 as part of his order that FEHB plans provide parity coverage. Initial research found that parity improved addiction and mental-health benefits in seven of nine FEHB plans originally studied; the plans were selected to include a range of plan types, including HMOs, a PPO, and point-of-service plans. "Two HMOs, which were close to parity in 2000, did not show a substantial change in benefits," the authors noted. 

Focusing on the other seven FEHBs, the researchers found that spending attributable to parity decreased between $68.97 and $201.99 per enrollee in three of the plans, while the other four plans experienced statistically insignificant changes in spending -- ranging from a decrease of $42.13 per beneficiary to an increase of $27.11. "This analysis offers no evidence of significant increases in spending attributed to the implementation of parity coverage," the study said.

Out-of-pocket expenses incurred by employees enrolled in FEHB plans declined in five of the seven plans, but rose significantly in the national PPO studied. The researchers also looked at the quality of depression treatment under parity and found that all plans did a better job of providing followup services to patients.

The research was published in the March 30, 2006 issue of the New England Journal of Medicine.