Development of a health risk adjustment method for the Health Insurance Plan of California

The Foundation's Changes in Health Care Financing and Organization program was designed to support research, demonstration, and evaluation projects examining major changes in health care financing.The purpose of this project is to design and demonstrate a risk adjustment mechanism for the nation's largest state-sponsored small employer insurance purchasing cooperative. The risk adjustor mechanism will be based on demographic information and a list of expensive, but not rare, diagnoses to assess the relative risk level of enrollees in each of the 23 plans offered by the Health Insurance Plan of California to its 44,000 enrolled individuals. The project will apply the model prospectively to the 1995 plan rates and then evaluate the validity of the factors the following year using actual claims data for 1995. The objective of the project is to provide policy makers with a working model of risk adjustment in a voluntary purchasing alliance for small employers, a prominent proposal for restructuring the small employer health insurance market.

Grant Details

Amount Awarded $487,582.00

Awarded on: 12/16/1994

Time frame: 1/1/1995 - 12/31/1996

Grant Number: 26226


State of California, Managed Risk Medical Insurance Board

818 K Street, Room 200
Sacramento, 95814-3510


Sandra Shewry
Project Director