Implementing Mental Health Parity in Vermont

The Vermont Parity Act is the most comprehensive parity law in the nation, covering both mental health and substance abuse (MH/SA) services. The law applies to all employers, regardless of size (except those who are self-funded). The law also requires parity for copayments, deductibles, and visit/day limits. Mathematica designed and conducted an evaluation of the act to ascertain effects on access, utilization, and spending.

The study, which looked at the first two to three years of parity in the state, concludes that parity was achieved. Increased use of managed care helped make parity affordable but may have reduced access and utilization for some services and beneficiaries. Parity did not appear to have an effect on the insurance market, although limited knowledge of the law complicated implementation for employers, providers, and consumers.

The study, summarized in an issue brief, included several components: (1) analyzing claims/encounter data to measure cost and utilization patterns among enrollees of two dominant private insurers—Blue Cross and Blue Shield of Vermont and Kaiser/CHP—over a four-year, pre-post period; (2) conducting an employer survey to assess employer knowledge of and responses to parity, including changes in insurance coverage decisions; and (3) performing a case study of the implementation experience to gather qualitative information from a wide range of stakeholders on the implementation process and perceived effects of parity.

The evaluation was funded by the Substance Abuse and Mental Health Services Administration, in partnership with the Vermont Department of Banking, Insurance, Securities, and Health Care Administration.

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