News Release

Date Posted

Estimating the Change in Coverage in California with a Basic Health Program

A memorandum prepared at the request of the California Health Benefit Exchange by the UC Berkeley Center for Labor Research and Education and the UCLA Center for Health Policy Research

The UC Berkeley Labor Center and UCLA Center for Health Policy Research were asked to examine the impact of a Basic Health Program (BHP) on coverage in California. To answer the question we employed the California Simulation of Insurance Markets (CalSIM) Model, version 1.7. Results are provided for two scenarios. The “base” scenario assumes typical responses by individuals and employers to expanded coverage offerings. The “enhanced” scenario is based on a more robust enrollment and retention strategy by state coverage programs.

Executive Summary
  • A Basic Health Plan increases overall coverage in California between 60,000 and 120,000 under the base scenario. Under the enhanced scenario, the change in coverage over the no‐BHP model ranges from a 20,000 increase to a 70,000 decrease depending on response to the BHP.1
  • We find no negative impact on the risk mix in the overall Exchange/Individual Market as a result of a Basic Health Program.
  • A Basic Health Program would reduce the size of the Exchange between 720,000 and 950,000 individuals. This could limit the Exchange’s bargaining power in the individual market, and may affect its ability to generate reforms that would lower the rate of premium cost growth overtime.
  • These results assume a $20 per person per month premium in the BHP. A higher premium would reduce the gains in coverage; a lower premium would potentially improve response. [...]