Mental Health Parity Legislation, Cost-Sharing and Substance Abuse Treatment Admissions
AbstractTreatment is highly cost-effective in reducing an individual’s substance abuse (SA) and associated harms. However, data from Treatment Episodes (TEDS) indicate that per capita treatment admissions substantially lagged behind increases in heavy drug use from 1992-2007. Only ten percent of individuals with clinical SA disorders receive any treatment, and almost half who forgo treatment point to accessibility and cost constraints as barriers to care. This study investigates the impact of state mental health and SA parity legislation on treatment admission flows and cost-sharing. Fixed effects specifications indicate that mandating comprehensive parity for mental health and SA disorders raises the probability that a treatment admission is privately insured, lowering costs for the individual. Despite some crowd-out of charity care for private insurance, mandates reduce the uninsured probability by a net 2.4 percentage points. States mandating comprehensive parity also see an increase in total treatment admissions. Thus, increasing cost-sharing and reducing financial barriers may aid the at-risk population in obtaining adequate SA treatment. Supply constraints mute effect sizes, suggesting that demand-focused interventions need to be complemented with policies supporting treatment providers. These results have implications for the effectiveness of the 2008 Federal Mental Health Parity and Addiction Equity Act in increasing SA treatment admissions and promoting cost-sharing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14471.
Date of creation: Nov 2008
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Dhaval Dave & Swati Mukerjee, 2011. "Mental health parity legislation, cost‐sharing and substance‐abuse treatment admissions," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 161-183, 02.
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-11 (All new papers)
- NEP-HEA-2008-11-11 (Health Economics)
- NEP-IAS-2008-11-11 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dhaval Dave, 2004.
"The Effects of Cocaine and Heroin Prices on Drug-Related Emergency Department Visits,"
NBER Working Papers
10619, National Bureau of Economic Research, Inc.
- Dave, Dhaval, 2006. "The effects of cocaine and heroin price on drug-related emergency department visits," Journal of Health Economics, Elsevier, vol. 25(2), pages 311-333, March.
- Caulkins Jonathan P., 1995. "Domestic Geographic Variation in Illicit Drug Prices," Journal of Urban Economics, Elsevier, vol. 37(1), pages 38-56, January.
- Sara Markowitz & Jonathan Klick, .
"Are Mental Health Insurance Mandates Effective?: Evidence from Suicides,"
Working Papers Rutgers University, Newark
2004-003, Department of Economics, Rutgers University, Newark.
- Jonathan Klick & Sara Markowitz, 2006. "Are mental health insurance mandates effective? Evidence from suicides," Health Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 83-97.
- Jonathan Klick & Sara Markowitz, 2003. "Are Mental Health Insurance Mandates Effective? Evidence from Suicides," NBER Working Papers 9994, National Bureau of Economic Research, Inc.
- Allen Goodman & Janet Hankin & Eleanor Nishiura & James Sloan, 1999. "Impacts of Insurance on the Demand and Utilization of Drug Abuse Treatment: Implications for Insurance Mandates," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(3), pages 331-348.
- Gruber, J., 1992.
"State Mandated Benefits and Employer Provided Health Insurance,"
92-18, Massachusetts Institute of Technology (MIT), Department of Economics.
- Jonathan Gruber, 1992. "State Mandated Benefits and Employer Provided Health Insurance," NBER Working Papers 4239, National Bureau of Economic Research, Inc.
- Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, vol. 14(2), pages 123-148, June.
- Suren Basov & Mireille Jacobson & Jeffrey A. Miron, 2001. "Prohibition and the Market for Illegal Drugs," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(4), pages 133-157, October.
- Dhaval Dave, 2004. "Illicit Drug Use Among Arrestees and Drug Prices," NBER Working Papers 10648, National Bureau of Economic Research, Inc.
- Gruber, Jonathan, 1994. "State-mandated benefits and employer-provided health insurance," Journal of Public Economics, Elsevier, vol. 55(3), pages 433-464, November.
- Becker, Gary S & Grossman, Michael & Murphy, Kevin M, 1991.
"Rational Addiction and the Effect of Price on Consumption,"
American Economic Review,
American Economic Association, vol. 81(2), pages 237-41, May.
- Gary S.Grossman Becker & Michael Murphy & Kevin M., 1991. "Rational Addiction and the Effect of Price on Consumption," University of Chicago - George G. Stigler Center for Study of Economy and State 68, Chicago - Center for Study of Economy and State.
- H Saffer & FJ Chaloupka & D Dave, 2001. "State Drug Control Spending And Illicit Drug Participation," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 150-161, 04.
- Niko de Silva & Benno Torgler, 2011.
"Smoke Signals and Mixed Messages: Medical Marijuana & Drug Policy Signalling Effects,"
CREMA Working Paper Series
2011-18, Center for Research in Economics, Management and the Arts (CREMA).
- Niko De Silva & Benno Torgler, 2011. "Smoke Signals and Mixed Messages: Medical Marijuana & Drug Policy Signalling Effects," School of Economics and Finance Discussion Papers and Working Papers Series 272, School of Economics and Finance, Queensland University of Technology.
If references are entirely missing, you can add them using this form.