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Mental Health/Substance Abuse Benefits
Most health plan participants in medium and large private establishments received coverage for mental health care in 1993: 98 percent for inpatient care and 97 percent for outpatient care.
Coverage for alcohol abuse and drug abuse was slightly less extensive. Ninety-eight percent of health plan participants received coverage for inpatient detoxification in 1993. Coverage for rehabilitation was less extensive. For alcohol abuse treatment, 80 percent of participants received coverage for inpatient rehabilitation and 82 percent for outpatient rehabilitation. For drug abuse treatment, 78 percent received coverage for inpatient rehabilitation and 80 percent for outpatient rehabilitation.
In order to control the costs of mental health/substance abuse benefits, employers have imposed more restrictive coverage limitations on these benefits than are imposed on other types of health care coverage. In 1993, among plan participants with mental health coverage in medium and large private establishments, 86 percent had more restrictive coverage for inpatient mental health care, and 97 percent had more restrictive coverage for outpatient mental health care.
Among plan participants with alcohol abuse benefits, 71 percent had more restrictive coverage for inpatient detoxification, 91 percent for inpatient rehabilitation, and 90 percent for outpatient rehabilitation.
Among plan participants with coverage for drug abuse treatment, 70 percent had more restrictive coverage for inpatient detoxification, 91 percent for inpatient rehabilitation, and 90 percent for outpatient rehabilitation.
There are various ways that a health plan may restrict mental health benefits coverage. Among the more common for inpatient services are: limits on the number of days covered for the care (55 percent of participants), limits on dollar amounts reimbursed to providers (47 percent), and reduced coinsurance levels (15 percent).
Another cost-saving measure employers have implemented is to carve out the mental health/substance abuse portion of the health plan. This is most commonly done by providing mental health/substance abuse benefits through a specialty preferred provider organization. This carve-out technique has grown in popularity from 7 percent of employers in 1993 to 20 percent in 1995.
For employers who offer mental health/substance abuse benefits through their health plan, the average cost for these benefits has dropped from about 6 percent of total plan costs in 1993 to 4 percent in 1995.
Data on the average hospital charge for various diagnoses are available from the Agency for Health Care Policy and Research. In 1992, the average charge for mental health/substance abuse related diagnoses ranged from $5,000 to $10,832, with an average length of stay in the hospital ranging from 7.89 days to 17.57 days. The average charge for a cancer-related diagnosis ranged from $7,793 to $43,195, with an average length of stay ranging from 3.63 days to 16.60 days.
For more information, contact Ken McDonnell (202) 775-6342, or Carolyn Pemberton, (202) 775-6341.
Source: EBRI Databook on Employee Benefits, third edition, 1995.
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