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Article Abstract

Online ISSN: 1099-176X    Print ISSN: 1091-4358
The Journal of Mental Health Policy and Economics
Volume 3, Issue 4, 2000. Pages: 209-213

Published Online: 22 Aug 2001

Copyright © 2001 John Wiley & Sons, Ltd.

 Research Article
State parity legislation and changes in health insurance and perceived access to care among individuals with mental illness: 1996-1998*
Roland Sturm, Ph.D. Senior Economist *
RAND, 1700 Main Street, Santa Monica, CA 90401, USA
email: Roland Sturm (Roland_Sturm@rand.org)

*Correspondence to Roland Sturm, RAND, 1700 Main Street, Santa Monica, CA 90401, USA.

*Source of funding: This research was financially supported by the Robert Wood Johnson Foundation and by the National Institute of Mental Health through grant numbers MH54147 and MH54623


The 1990's witnessed a new wave of state and federal legislation affecting mental health insurance in the United States. Although patient advocacy groups have hailed the passage of numerous "parity" laws that require insurance coverage for mental illnesses to equal that for physical ailments, it is unclear whether this activity represents a major improvement in insurance benefits among mentally ill or significantly increases their access to care.

This paper contrasts how insurance coverage has changed among individuals with mental health problems in states with and without parity legislation.

National survey data from 1996 to 1998, subset to a panel of 1220 individuals exceeding clinical screeners for a mental health disorder. Dependent variables are change in insurance status, insurance generosity and perception of access to care. The analysis contrasts changes in dependent variables between states with and without parity legislation (a difference-in-differences analysis).

There are no statistical significant effects of state parity; point estimates suggest that parity mandates are associated with a slightly higher number of mentally ill reporting improved insurance generosity and access to care, but also with a higher number of mentally ill losing all insurance coverage in parity states. The estimated effects are too small to be statistically significant, although the sample size is limited and the study had only good statistical power to detect large effects.

At the population level, state parity legislation appears to have not had large effects on the insurance coverage of the group that was intended as the primary beneficiary of legislation. Likely reasons include the limited scope of the actual legal requirements and large numbers of mentally ill that are not covered by health insurance subject to such legislation. The results do not exclude the possibility that some subgroups experienced substantial improvements in their insurance coverage. At the population level, large effects experienced by small subgroup are diluted by groups that experienced no similar changes. However, parity legislation was not considered a minor issue by advocates and opponents and this analysis has the statistical power to detect the sizeable differences that were argued in the policy debate.

Implications for Health Policies:
While state parity legislation may have improved insurance benefits for some, it appears not to have resulted in substantial improvements for the mentally ill as a whole. The results could be very different, however, if strong federal legislation were passed that has a broader scope than state legislation.

Implication for Research:
The parity debate provides an important reminder of how little research is available to inform policy. This study provides a crude picture, but it is far from being a conclusive evaluation. The most urgent need is for data that continue to track changes in markets and policies. Copyright 2000 John Wiley & Sons, Ltd.

Received: 16 November 2000; Accepted: 5 February 2001