Evaluation of Parity in the Federal Employees Health Benefits (FEHB) Program: Final Report. Evaluation Findings in Brief

12/31/2004

As of January 1, 2001, all of the FEHB plans had complied with the parity policy, two-thirds incurred no added administrative costs, and none reported major problems with implementation. Furthermore, no plans left the FEHB Program to avoid the parity policy. The policy change enhanced MH/SA benefits for FEHB Program enrollees. At the time of policy implementation, two-thirds of the plans had entered into managed care arrangements with a specialty MH/SA vendor (called a “carve out”).

The impact of the parity policy was assessed in detail in nine FEHB plans that reflect both fee-for-service and health maintenance organizations from regions across the country where Federal employees, their dependents, and retirees reside. Overall, the evaluation showed that parity could be implemented with some increase in access to MH/SA care but little or no increase in total MH/SA spending. Users of services in most but not all plans experienced a decrease in out-of-pocket spending, indicating that parity provided the intended additional financial protection for MH/SA expenditures for many enrollees. There was also little or no impact on quality of treatment of major depressive disorder or substance abuse disorder.

For adults, access to MH/SA services (as measured by the probability of MH/SA service use) in these plans increased from before to after parity. Only one plan showed a significant increase in utilization, however, when secular trends were taken into account; two plans showed a significant decrease in utilization. For substance abuse services alone, all of the plans showed a small absolute increase in access that was significant in all cases when compared to secular trends. Total spending on MH/SA services, however, declined in seven of nine plans; four of these decreases were significant. In all but one instance, substance abuse spending either declined or was unchanged. Out-of-pocket expenditures for MH/SA services decreased in six plans and increased in three plans. The impact of the parity policy on children’s utilization and spending for MH/SA services was similar to that observed for adults.

Overall, the parity policy was implemented as intended with little or no significant adverse impact on access, spending, or quality, while providing users of MH/SA care improved financial protection in most instances.

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