Federal Employee Health Benefits FEHB 19992002

1
Federal Employee Health Benefits (FEHB) 1999-2002

• FEHB has 8.5M enrollees, in 350 insurance
  products, mostly managed care
• June 1999 Executive Order (Clinton)
• Parity Coverage that is identical with regard
  to traditional medical care deductibles,
  coinsurance, co-pays, and day and visit
  limitations.

2
FEHB 1999-2002 Study

• 7 FEHB Plans vs. 7 Matched Plans
• 3 million beneficiaries and 700,000 continuously
  enrolled adults
• General Results
• 1 plan increased use 0.78
• 1 plan decreased use -0.96
• 5 plans stayed the same non-significant

Goldman et al., Behavioral Health Insurance
Parity for Federal Employees, NEJM, March 30,
2006.
3
FEHB 1999-2002 Study

• Insurance Costs Beneficiaries who used MH or
  Substance Abuse services
• 3 plans decreased spending-201.99 to
  -68.97 plt0.05
• 4 plans did not change significantly-42.13 to
  27.11 pgt0.05
• Patient Savings Implementation of parity was
  associated with significant reductions in
  out-of-pocket spending in 5 of 7 plans.

4
Secular Trends (not parity-related)

• Utilization For all plans, the rates of use and
  spending for MH and SA services increased.
• Quality All plans showed an increased
  likelihood of providing follow-up services to
  persons undergoing treatment for acute-phase
  depression.

5
Secular Trends

• The use of mental health services is no longer
  exceptionally responsive to price.
• Baseline rates of MH use are higher than two
  decades ago, and
• More MH services are provided in primary care
  settings
• Managed care has controlled costs, compared to
  prior emphasis on psychotherapy.
• Use of Inpatient services has declined.

6
Bottom Line

• Parity coverage unambiguously improves the value
  of health insurance.
• It moves risk away from individual patients
  without changing the incentives that they face.
• Parity improves the well-being of insured people
  by reducing their financial risk, and it does not
  distort the market for mental health services.

Glied Cuellar, Better Behavioral Health Care
Coverage for Everyone, NEJM, March 30, 2006.