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

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.