Business
Sep 11, 2009
Advocates for Mental Health Parity Look Pretty Good in New Study
State report finds that equal insurance coverage for physical and mental health resulted in fewer psychiatric hospitalizations, and cost neutrality.
It took over 10 years to get a mental health parity bill through the Oregon legislature. But it happened.
In 2005, Gov. Kulongoski signed into law Senate Bill 1, which said that beginning on January 1, 2007 state-regulated group health insurance policies must cover mental health and chemical dependency treatment at the same level as physical health services.
The fears promoted by businesses and the insurance industry have, so far, proved baseless. This is a good example for us as the broader health insurance reform debate rages on.
In the years leading up to the parity law, private insurers and business interests insisted that it would cause insurance rates to skyrocket, leaving business owners no choice but to drop all insurance coverage for their employees. Advocates countered that parity would in fact save money.
How so? Because untreated mental illness and addictions result in physical health ailments, parity advocates predicted that providing treatment in a timely manner, before costly hospitalization became necessary, would be cost-effective.
Who was right? Although it might be too soon to say for sure, a recent report from the Oregon Department of Consumer and Business Services is making the advocates look pretty good.
The report compares claims from 2006 (before parity) and 2008. The data show that claims for outpatient mental health visits went up 17.9% while claims for inpatient mental health treatment went down 6.2% and claims for residential mental health went down 30%. Claims for both outpatient and residential chemical dependency treatment went up but had very little impact on the overall cost of health insurance.
According to the report, “there appears to be relatively little impact to total healthcare claims costs. Mental health costs remained at a little over 3.1% of insurers’ total healthcare claims costs, and insureds actually saw a small decrease in the relative percentage of overall costs attributable to mental health claims.”
So the data show more outpatient visits, fewer hospitalizations and cost neutrality. Yay, advocates! The fears promoted by businesses and the insurance industry have, so far, proved baseless. This is a good example for us as the broader health insurance reform debate rages on.
