Health Insurance and Traffic Fatalities: The Effects of Substance Use Disorder Parity Laws

Abstract

Each year, approximately 10,000 individuals die in alcohol-impaired traffic crashes in the United States, while psychoactive drugs are involved in 20% of all fatal traffic crashes. In this study, we investigate whether state-specific parity laws for substance use disorder (SUD) treatment have the added benefit of reducing traffic fatalities. Parity laws compel insurers to generously cover SUD treatment in private markets, thereby reducing the financial costs of and increasing access to treatment for beneficiaries. We employ 23 years of administrative data from the Fatality Analysis Reporting System (FARS) coupled with a differences-in-differences design to investigate the potential spillover effects of parity laws to traffic safety. Our findings indicate that passage of a parity law reduces traffic fatality rates by 5.8 to 8.6%. We also find that passage of parity laws reduces fatal alcohol poisonings and psychoactive drug overdoses. These findings suggest that government regulations requiring insurers to cover SUD treatment can significantly improve traffic safety, possibly by reducing the number of impaired drivers on roadways.