"Freedom of choice" laws: empirical evidence of their contribution to competition in mental health care delivery.

Abstract

Freedom of Choice laws have been forwarded as laws which enhance consumer choice and efficient functioning of markets for mental health services. The name of these laws constitute a misnomer, because they serve to force consumers to buy a specific type of insurance coverage. Nevertheless, under a specific set of markets conditions, the implementation of Freedom of Choice laws may increase competition and improve efficiency in the market. Empirical estimates are reported of the effect on prices of this legislation.