Working Paper: NBER ID: w23094
Authors: Johanna Catherine Maclean; Ioana Popovici; Elisheva Rachel Stern
Abstract: We examine how substance use disorder (SUD) treatment providers respond to private insurance expansions induced by state equal coverage (‘parity’) laws for SUD treatment vis-à-vis general healthcare services. Economic theory suggests that such laws will lead to changes in provider behaviors. We use data on licensed specialty SUD treatment providers in the United States between 1997 and 2010 in a differences-in-differences analysis. During this period, 12 states implemented laws that require equality in coverage for SUD treatment. Following the passage of a state parity law we find that providers are less likely to participate in public markets, are less likely to offer price discounts to patients, and increase the quantity of healthcare provided. Further we find evidence that treatment intensity declines following passage of a parity law and heterogeneity in effects across ownership status.
Keywords: substance use disorder; health insurance; provider behavior; parity laws
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Implementation of state parity laws for SUD treatment (I18) | Changes in provider behavior (I11) |
| Implementation of state parity laws for SUD treatment (I18) | Decrease in Medicaid participation (I18) |
| Implementation of state parity laws for SUD treatment (I18) | Decrease in participation in other state-financed programs (H79) |
| Implementation of state parity laws for SUD treatment (I18) | Decrease in likelihood of offering price discounts (L42) |
| Implementation of state parity laws for SUD treatment (I18) | Increase in quantity of healthcare provided (I11) |
| Implementation of state parity laws for SUD treatment (I18) | Decrease in treatment intensity (C22) |
| For-profit providers (L39) | More pronounced reduction in accepting discounted payments (E43) |