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Federal Parity Law Provides Modest Cost Reductions for Children’s Mental Health Services

Adult male talking to young boy. Adult male talking to young boy.

U.S. families spent less out-of-pocket for their children's mental health services after enforcement of the federal Mental Health Parity and Addiction Equity Act, but the cost reductions were modest and likely did little to reduce the financial burden on those with the most intensive needs, according to a study in the August 2018 issue of Pediatrics.

The study, "Federal Parity and Spending for Mental Illness," analyzed inpatient, outpatient and pharmaceutical claims from three national insurers for Jan. 1, 2008, through Dec. 31, 2012, as provided by the Health Care Cost Institute. 

Researchers identified children ages 3 through 18 years with mental health conditions who were continuously enrolled in medical, mental health and pharmacy coverage. They found that those enrolled in plans subject to parity spent on average $140 less annually in out-of-pocket costs for mental health services than would have been expected given trends in the comparison group. Children who were at or above the 85th percentile in total mental health spending spent an average of $234 less annually out-of-pocket than would have been expected.

The parity law required group health plans offering mental health and substance use disorder benefits to impose no more restrictive financial requirements (e.g., cost sharing, deductibles and visit limits) or treatment limitations (e.g., preauthorization requirements) on mental health and substance use services than for general medical services. Among children with mental health conditions overall, average annual mental health spending during the study's baseline years (2008-2009) was $824 compared to $5,453 among children in the higher spending group. According to prior estimates, at least 20 percent of children and adolescents have a diagnosable mental health condition.

Additional Information from

7/23/2018 12:00 AM
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