A Report to the 2005-2006 California State Legislature
Analysis of Senate Bill 572
Mental Health Benefits

CHBRP has estimated that modest utilization changes would occur as a result of the mandate. Increased utilization would result from an elimination of benefit limits (e.g., limits on number of annual hospital days and outpatient visits) and reduced cost-sharing levels (e.g. copayments that may be higher than for other health care services). Increased utilization would also result for people who previously had no coverage at all of mental health treatment for conditions other than those defined in AB 88 as SMIs. However, increased utilization would be somewhat mitigated as health plans react by strengthening their utilization management (e.g., shifting consumers from inpatient to outpatient settings).

It is estimated that SB 572 will increase total health care costs by $118,596,000 per year for the population in plans subject to the mandate. This is an increase of approximately 0.2115%.

• Total premiums paid by all private employers in California would increase by an estimated $111,423,000 per year, or 0.3151%. The impact on per member per month premiums varies by market segment. Large group FFS plans would experience the largest increase of $2.24. Large group HMOs would experience the smallest increase of $0.17.