The California Cost and Coverage Model: analyses of the financial impacts of benefit mandates for the California legislature

Health Serv Res. 2006 Jun;41(3 Pt 2):1027-44. doi: 10.1111/j.1475-6773.2006.00518.x.

Abstract

Objective: To produce cost estimates of proposed health insurance benefit mandates for the California legislature.

Data sources: The 2001 California Health Interview Survey, 2002 Kaiser Family Foundation/Health Research and Education Trust California Employer Health Benefits Survey, Milliman Health Cost Guidelines, and ad hoc surveys of large health plans were used.

Study design: We developed an actuarial model to estimate short-term (1 year) changes in utilization and total health care expenditures, including insurance premiums and out-of-pocket expenditures, if insurance mandates were enacted. This model includes baseline estimates of current coverage and total current expenditures for each proposed mandate.

Principal findings: Analysis of seven legislative proposals indicated 1-year increases in total health care expenditures among the insured population in California ranging from 0.006 to 0.200 percent. Even when proposed mandates were expected to reach a large target group, either utilization or cost was sufficiently low to keep total cost increases minimal.

Conclusions: Our ability to develop a California-specific model to estimate the impacts of proposed mandates in a timely fashion provided California legislators during the 2004 legislative session with more-detailed coverage and cost information than is generally available to legislative bodies.

MeSH terms

  • Actuarial Analysis
  • Adolescent
  • Adult
  • California
  • Child
  • Child, Preschool
  • Costs and Cost Analysis / trends
  • Data Collection
  • Female
  • Humans
  • Infant
  • Infant, Newborn
  • Insurance Benefits / economics*
  • Insurance Benefits / legislation & jurisprudence*
  • Male
  • Mandatory Programs* / economics
  • Middle Aged