Milbank Quarterly

Volume 84, Number 1, 2006


Health Plans Respond to Parity: Managing Behavioral Health Care in the Federal Employees Health Benefits Program

M. Susan Ridgely, M. Audrey Burnam, Colleen L. Barry, Howard H. Goldman, and Kevin D. Hennessy

The government often uses the Federal Employees Health Benefits (FEHB) Program as a model for both public and private health policy choices. In 2001, the U.S. Office of Personnel Management (OPM) implemented full parity, requiring that FEHB carriers offer mental health and substance abuse benefits equal to general medical benefits. OPM instructed carriers to alter their benefit design but permitted them to determine whether they would manage care and what structures or processes they would use. This article reports on the experience of 156 carriers and the government-wide BlueCross and BlueShield Service Benefit Plan. Carriers dropped cost-restraining benefit limits. A smaller percentage also changed the management of the benefit, but these changes affected the care of many enrollees, making the overall parity effect noteworthy.

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