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The Effects of Three Types of Insurance Benefit Design Features on Specialty Mental Health Utilization

  • Author(s): Friedman, Sarah A.
  • Advisor(s): Ettner, Susan L
  • et al.

Research Objective: Improving mental health insurance generosity has been a goal of policy-makers concerned that high cost-sharing reduces access to specialty mental health care for those needing services. Using 2009-11 data, this study examines this concern by measuring the extent to which specialty mental health use and expenditures change in response to changes in three kinds of benefit design features: 1. Financial requirements (copayments, coinsurance, and deductible levels), 2. Quantitative treatment limits (whether or not the plan limits the number of annual visits or days covered), and 3. Non-quantitative treatment limits (additional penalty copayment and coinsurance charged if patients are required to obtain prior authorization but do not). This study first examines whether each of the benefit design features is negatively associated with use and expenditures. Then, using interaction terms, it examines whether each of the benefit design features negatively modifies the effects of the others on the outcomes.

Study Design: Linked claims, enrollment, and benefit design data from a large national managed behavioral health organization represent a year before (2009) and a year after (2011) the Mental Health Parity and Addiction Equity Act (MHPAEA) mandated that, when provided, mental health and substance use disorder benefits must be at parity with medical benefits. A first-differences study design is implemented using change scores. Outcomes measure changes in annual in-network (INN) and out-of- network (OON) use, total (plan and patient) expenditures, and patient out-of-pocket expenditures for individual psychotherapy visits and inpatient days. Predictors are change scores of individual benefit design features (2011-2009 value), with separate measures for INN and OON benefits, as well as change scores of the interaction terms to examine modifying effects. Effects are estimated using linear regression, adjusting standard errors for employer-level clustering. Separate regressions are run for plans that only cover in-network services and plans that cover in- and out-of-network (INN/OON) services.

Population Studied: The study sample consists of commercially-insured adults (18 to 64 years old), residing in the U.S., without a substance use disorder diagnosis, who are enrolled in a plan subject to MHPAEA in both 2009 and 2011.

Principal Findings: Among the 85% of total sample enrollees (1,058,474 enrollees) enrolled in INN/OON plans, increases in copayment are associated with small increases in patient expenditures (β=$0.11/year), while elimination of treatment limits is associated with small increases in use (β=0.10 visits/year) and total expenditures (β=$7.65/year) for INN individual psychotherapy. For INN inpatient care, increases in deductibles are associated with small increases in patient expenditures (β=$0.0004/year) and increases in coinsurance are associated with small increases in days of care (β=0.0007 days). Similar results were observed among INN-only plans, with the addition of positive effects of coinsurance on patient expenditures for inpatient care (β=0.14 days/year) and of negative significant effects of additional penalty copayment on individual psychotherapy (β=-0.0006 visits/year; β=-$0.04/year) and inpatient care (β=-0.01 days/year). Interaction terms were not consistently significant enough to lend support to the hypothesis about modifying effects. None of the benefit design features were statistically significant predictors of OON use.

Conclusions: Elimination of limits was the benefit design feature with the largest impact. It was associated with an additional $7.65 increase in total expenditure/year for individual psychotherapy (a 50% increase over 2009 total expenditures). Increases in INN patient expenditures associated with increases financial requirements were small in magnitude, but statistically significant. As hypothesized, non-quantitative limits were negatively associated with use and total expenditures, but only among INN-only plans.

Implications for Policy or Practice: The findings suggest that, in a population of adults with employer-sponsored insurance, increases in cost-sharing through financial requirements results, on average, in greater financial burden for patients who use services, rather than decreases in use. Average income may be high enough in this sample that, on average, use is not sensitive to relatively small changes in cost-sharing. On the other hand, eliminating limits may be associated with improved access to care for those with the greatest need.

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