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Effects of the Vermont Mental Health and Substance Abuse Parity Law

Margo Rosenbach
Tim Lake
Cheryl Young
Wendy Conroy
Brian Quinn
Julie Ingels
Brenda Cox
Anne Peterson
Lindsay Crozier

U. S. Department of Health and Human Services
Substance Abuse and Mental Health Services Administration
Center for Mental Health Services
Center for Substance Abuse Treatment

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Table of Contents

  Acknowledgments
  Executive Summary
I. Introduction
  Why Study the Effects of Parity in Vermont
  Conceptual Framework for This Evaluation
  Questions Addressed in This Evaluation
  Organization of This Report
II. Implementation of Vermont's Mental Health/Substance Abuse Parity Law
  Early Implementation Experiences
 

     Blue Cross Blue Shield of Vermont

 

     Kaiser/CHP

 

     Other Health Plans

  Early Effects on Vermont's MH/SA Delivery System
 

     Perspectives on the Introduction of Managed Care for MH/SA Services

 

     Effects on the Public Sector

  Stakeholder Reflections on the Effectiveness of Vermont's Parity Law
 

     How Well Did Consumers Understand Vermont's Parity Law?

 

     Did Vermont's Parity Law Achieve Its Objectives?

  Development of New State-Level Initiatives
  Discussion
III. Health Plan Responses to the Vermont Parity Law
  Effects on MH/SA Coverage Provisions
 

     Pre-Parity Coverage of MH/SA Services

 

     Changes Brought About by the Vermont Parity Law

  Effects of Parity on Access, Use, and Spending
 

     Analytical Approach

 

     Patterns of Access to and Use of Mental Health Services Before and After Parity

 

     Patterns of Access to and Use of Substance Abuse Treatment Before and After Parity

 

     Patterns of Mental Health and Substance Abuse Spending Before and After Parity

  Discussion
IV. Employer Perspectives on the Vermont Parity Law
  Employer Awareness of the Vermont Parity Law
 

     Employer Knowledge of the Parity Law

 

     Employee Knowledge of the Parity Law

  Employers' Perceptions of the Effects of the Parity Law
 

     Effects on Health Care Costs

 

     Discontinuation of Employer-Sponsored Coverage

 

     Changes from Fully Insured to Self-Insured Coverage

 

     Effects on Employee Premium Contributions

 

     Effects on Employee and Dependent Participation in Health Plans

 

     Effects on the Number and Type of Health Plan Choices

 

     Effects on Other Health-Related Activities

 

     Changes in Other Aspects of the Business

  Employer Satsifaction with the Vermont Parity Law
  Employer Recommendations for Improving the Parity Law
  Discussion
V. Synthesis of Major Findings
  Summary of Major Conclusions
 

     Parity Did Not Cause Employers to Drop Coverage or Switch to Self-Insured Products

 

     Access to Outpatient Mental Health Services Improved With Parity

 

     Access to Substance Abuse Treatment Was More Limited After Parity

 

     Spending for Covered MH/SA Services Declined After Parity

 

     Consumers Paid a Smaller Share of Total Spending for Covered MH/SA Treatment After Parity

 

     Managed Care for MH/SA Services Was an Important Factor in Controlling Costs

 

     Awareness of Parity Was Relatively Low Among Customers

  Concluding Remarks
VI. References
VII. Endnotes

Exhibits

I.1:. Overview of State Mental Health/Substance Abuse Parity Laws that Exceed the Federal parity Law, as of August 2002
I.2: Conceptual Framework for Evaluating the Effects of Vermont's Mental Health/Substance Abuse (MH/SA) Parity Law
I.3: Questions Addressed by the Evaluation of the Vermont Parity Law

Figures

III.1: Simulation of the Effects of Parity and Managed Care on the Average Number of Outpatient Mental Health Visits per User: Blue Cross Blue Shield of Vermont, 1996-1999
III.2: Simulation of the Effects of Parity and Managed Care on Average Health Plan Spending per User per Quarter: Blue Cross Blue Shield of Vermont, 1996-1999

Tables

III.1: Overview of Mental Health/Substance Abuse Benefits Offered by Two Vermont Health Plans: 1997 Pre-Parity Baseline (Most Prevalent Plans by Line of Business)
III.2: Access to and Use of Mental Health Services by Members of Two Vermont Health Plans: 1996-1999
III.3: Annual Level of Mental Health Utilization by Members of Two Vermont Health Plans: 1996-1999
III.4: Access to and Use of Substance Abuse Services by Members of Two Vermont Health Plans: 1996-1999
III.5: Annual Level of Substance Abuse Utilization by Members of Two Vermont Health Plans: 1996-1999
III.6: Spending For Mental Health and Substance Abuse Services: Blue Cross Blue Shield of Vermont, 1996-1999
III.7: Annual Level of Health Plan Payments for Mental Health and Substance Abuse Services: Blue Cross Blue Shield of Vermont, 1996-1999
III.8: Mental Health and Substance Abuse Spending as a Percentage of Total Spending: Blue Cross Blue Shield of Vermont, 1996-1999
III.9: Median Out-of-Pocket Payments as a Percent of Total Mental Health Charges Among Members With a Serious Mental Condition, by Level of Mental Health Charges: Blue Cross Blue Shield of Vermont, 1996 and 1999
IV.1: Knowledge of the Vermont Parity Law, by Firm Size
IV.2: Sources of Information About Parity
IV.3: Approaches Used by Employers to Notify Employees About the Parity Law
IV.4: Recent Changes in the Characteristics of Employer-Sponsored Health Insurance as Reported by Vermont Employers and the Extent to Which Parity Was a Factor in the Change
IV.5: Vermont Employers' Assessment of Factors Contributing to Premium Increases, by Firm Size
IV.6: Level of Concern About the Effects of Parity on Health Insurance Costs in the Future, by Firm Size
IV.7: Overall Satisfaction With the Vermont Parity Law, by Firm Size
IV.8: Employer Satisfaction With Selected Aspects of the Vermont Parity Law, by Firm Size
B.1: Market Share of the Five Largest Health Plans in Vermont, 1998 and 2000
C.1: Determinants of the Probability of Mental Health Service Use: Kaiser/CHP, 1996-1999
C.2: Determinants of the Probability of Mental Health Service Use: Blue Cross Blue Shield of Vermont, 1996-1999
C.3: Determinants of the Level of Mental Health Service Use: Kaiser/CHP, 1996-1999
C.4: Determinants of the Level of Mental Health Service Use: Blue Cross Blue Shield of Vermont, 1996-1999
C.5: Determinants of the Probability of Substance Abuse Service Use: Kaiser/CHP, 1996-1999
C.6: Determinants of the Probability of Substance Abuse Service Use: Blue Cross Blue Shield of Vermont, 1996-1999
C.7: Determinants of the Level of Substance Abuse Service Use: Kaiser/CHP, 1996-1999
C.8: Determinants of the Level of Substance Abuse Service Use: Blue Cross Blue Shield of Vermont, 1996-1999
C.9: Determinants of Average Health Plan Payments on Mental Health and Substance Abuse Services per User per Quarter: Blue Cross Blue Shield of Vermont, 1996-1999
D.1: Completed Cases and Response Rates
D.2: Unweighted and Weighted Sample Sizes, by Stratum
D.3: Characteristics of Vermont Employers, by Firm Size
D.4: Characteristics of Employer-Sponsored Health Insurance Coverage in Vermont, by Firm Size
D.5: Health Plan Choices Offered to Employees in Vermont, by Firm Size
D.6: Distribution of Vermont Employees With Employer-Sponsored Health Insurance Coverage, by Type of Plan Funding
D.7: Variation in Health Care Costs and Cost-Monitoring Activities, by Firm Size

Appendixes

A: Vermont's Mental Health/Substance Abuse Parity Law
B: The Context for Vermont's Parity Law
C: Methods Used to Conduct the Claims/Encounter Data Analysis
D: Methods Used to Conduct the Survey of Vermont Employers

SMA03-3822
09/2003

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