The Coalition for Nondiscriminatory Coverage of Addiction Treatment retained Milliman & Robertson, Inc. (M&R) to estimate the effect of various substance abuse parity provisions on premium rates of commercial health insurance products. These parity provisions would prohibit health insurers, HMOs and employee health benefit plans from imposing treatment limits and/or cost sharing requirements on substance abuse services that are not imposed on services for other conditions. Nothing in these provisions prevents health plan issuers or employee health benefit plans from requiring concurrent review, prior authorization of services or other utilization management mechanisms.³

This report presents premium rate estimates along with descriptions of the data sources, methodology and assumptions that we used to produce the premium rate estimates. By releasing this report, M&R is not supporting any particular healthcare reform policy.

Because the economy and the healthcare system are dynamic, there is an intrinsic uncertainty in projecting costs for any insurance reform, and this uncertainty applies to our work. The estimates presented here are based on a number of assumptions, partly because data about utilization and demand for treatment of substance abuse disorders are incomplete.

We emphatically caution the reader that this report contains composite premium rate estimates that must be used carefully. These composites represent averages of per-capita costs for distinct populations or benefits. The estimates upon which the composites are based are each subject to a fair amount of uncertainty. Furthermore, the underlying premium rate estimates apply to distinct types of populations and benefits. Composites of these estimates may not be applicable to any of the individual underlying population types or benefits. The reader should note that premium rate estimates published by other researchers for similar programs may not apply to the same populations that we have investigated here, so caution should be used in comparing these estimates.

This report is not intended to support or detract from any particular legislation. If this report is copied, it must be distributed in its entirety. The conclusions of this report are based on the analysis we conducted and should not be interpreted as representing the position of Milliman & Robertson, Inc.