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The Costs and Effects of Parity for Mental Health
and Substance Abuse Insurance Benefits

Merrile Sing
Steven Hill
Suzanne Smolkin
Nancy Heiser

U.S. Department of Health and Human Services
Public Health Service
Substance Abuse and Mental Health Services Administration
5600 Fishers Lane
Rockville, MD 20857

Additional Copies

For additional copies of this document or associated background reports, please write or call SAMHSA's National Mental Health Information Center, P.O. Box 42557, Washington, DC 20015, 1-800-789-2647.

Originating Office

Office of Managed Care
Center for Mental Health Services, SAMHSA
5600 Fishers Lane, 15C-17
Rockville, MD 20857
March 1998
DHHS Publication No. MC99-80 Printed 1998

Table of Contents

Acknowledgements
Executive Summary
Introduction
Chapter 1: State Parity Laws
Federal Parity Legislation
State Parity Mandates
Chapter 2: Case Studies
Study Methods
Study Findings
Chapter 3: Actuarial Assumptions
Previous Actuarial Studies of Parity
Actuarial Study for This Report
Chapter 4: Cost Estimates
Options for Providing Parity in MH/SA Insurance Benefits
Method for Estimating Costs
Estimated Premium Increases for Families
Estimated Premium Increases for Child Health Plans
Interpreting the Estimates
Conclusion
References
Appendix A: Glossary
Appendix B: Calculating the Premium Increase
Appendix C: Policy Advisory Panel Members
Appendix D: Expert Panel Members

TABLES

1.1 Characteristics of Mental Health and Substance Abuse Parity Legislation by State
1.2 Serious/Biologically Based Mental Illnesses Specified in Parity Legislation
3.1 Actuarial Cost Studies Estimating thr Effects of Expanded MH/SA Insurance Benefits
4.1 Partial and Full Parity Benefit Options for A Fee-for-Service Plan
4.2 Full Parity Benefit Options
4.3 Average Premium Increases Aggregated Across Plan Types
4.4 Percentage Increases in Total Premiums by Diagnosis and Plan Type
4.5 Increases in Children's MH/SA Expenditures and Premiums for Full Parity by Plan Type
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