Trends in Mental Health Insurance Benefits and Out-of-Pocket Spending

Insurance benefits can have a large effect on whether one is able to access health care services.1 Mental health and substance abuse (MHSA) insurance coverage has typically been less generous than for general health services. Unlike general health services, MHSA benefits often limit the number of days of inpatient care and outpatient visits, and often have separate limits on the total dollar amount reimbursed for inpatient and outpatient services. When insurance covers more limited expenditures, more must be paid out-of-pocket by the insured and there is less incentive to use services and more financial risk. The goal of this paper is to measure the change in value of mental health (MH) insurance coverage over time by simulating the out-of-pocket expenditures required under typical benefit packages offered in 1987 and 1996. This is done by examining trends in the number of insurance policies that set specific types of limits on coverage and then by simulating reimbursed and un-reimbursed expenses submitted to private insurance plans given typical insurance benefits in 1987 and 1996. This paper used data on MH benefits collected by the Agency for Health Care Research and Quality. Before presenting that data, it is useful to review what other surveys have shown about trends in health insurance benefits. The Department of Labor (DOL) employee benefits surveys of medium and large employers show that almost all employees with health particularly of inpatient care, experienced a decline in coverage while those with less intensive needs may have experienced a slight increase. Implications for Health Policies: Out-of-pocket spending in both years of the study was substantial suggesting that improved health care coverage, such as that mandated in parity legislation, could improve access to care for persons needing mental health treatment. Implication for Further Research: Additional research is needed to understand how trends in out-of-pocket spending and insurance benefits have influenced access to care.

Full report: Trends in mental health insurance benefits and out-of-pocket spending.pdf (39.83 kb)