Association for Public Policy Analysis & Management

Panel: Insurance Expansions, Mental Health, and Substance Use Disorders: Quasi-Experimental Evidence from State Policies

(Health Policy)

Mental illness and substance use disorders (SUDs) are costly and chronic health conditions.  In 2016 18% and 8% of American adults met diagnostic criteria for a mental illness and SUD.  For affected individuals, costs include poor health, interpersonal problems, and employment difficulties.  The costs to society, which total $1.1T each year in the U.S., include healthcare utilization, crime, disability payments, and so forth. 

While these chronic conditions are costly, they can be effectively treated by general healthcare (e.g., medications prescribed in primary care settings) and specialty (e.g., inpatient residential treatment) providers.  In spite of the established effectiveness of numerous modalities of treatment, levels of unmet need for treatment remain high.  For instance, in 2016 only 10% of individuals with an SUD received any treatment.  While there are myriad factors that prevent individuals from receiving treatment, lack of insurance coverage and inability to pay are critical barriers.  One approach to increasing treatment utilization is to expand coverage for mental illness and SUD treatment.  Indeed, during the last three decades state governments have substantially increased coverage for these services through policy implementation. 

This session provides quasi-experimental evidence on the effectiveness of state policies on mental illness and SUD outcomes within important sub-groups defined by age and income.  All papers apply differences-in-differences methods to recover causal estimates.  Findings are immediately relevant as governments at the state and federal level are considering re-shaping the policy landscape of mental illness and SUD treatment coverage at a time when the country is facing an opioid epidemic and mental illnesses directly affect nearly one in five Americans. 

Paper one examines the effect of state laws that compel private insurers to cover mental healthcare services at parity with general healthcare services on mental health and educational outcomes among young adults.  This paper leverages administrative data on suicides, and survey data on mental health and educational outcomes.  Findings imply that passage of a state parity law improves mental health and educational outcomes.  Paper two studies the effect of State Children’s Health Insurance Program and Medicaid expansions, and state equal coverage laws for SUD treatment in private markets on children’s use of SUD treatment.  Both public and private expansions increase treatment utilization, with public insurance expansions allowing children to access more intensive treatment modalities than private expansions.  The composition of children in treatment changes post-expansion and public expansions have positive spillovers for adults.  Paper three explores the effects of ACA-Medicaid expansions to low income adults on Medicaid-financed prescriptions for mental illness.  Expansions lead to an increase in prescriptions with homogenous effects across most major illness groups and across states with different levels of patient need, system capacity, and expansion scope.  Further, Medicaid – and not patients – finances the increased prescriptions. 

The session includes a chair and two discussants with substantial expertise in public policy, insurance, mental health, and SUDs.  Ample time will be allocated for audience questions and discussion.  The session promotes diversity across gender, race, seniority, and workplace.  Thus, the session is well-aligned with conference themes and objectives.