HPD Team Analyzes Behavioral Health Spending Trends from 2018 to 2023

The Health Care Affordability Advisory Committee meeting held on July 17, 2025, focused on analyzing behavioral health spending in California. The Department of Health Care Access and Information reviewed data from Covered California and CalPERS, which provided essential context for upcoming benchmark recommendations.

The Health Policy Division (HPD) team presented findings based on claims data from 2018 to 2023, utilizing a methodology developed by the Milbank Memorial Fund. This approach aims to establish a baseline understanding of spending related to mental health and substance use disorders. The analysis is limited to the commercial market and does not include Medicaid, Medicare Advantage, or Medicare fee-for-service spending.

The data analyzed includes claims from fully insured plans and voluntary self-insured submitters. It primarily reflects fee-for-service payment arrangements but also incorporates some bundled payment data. To ensure compliance with de-identification guidelines, claims records with fewer than 30 claims were excluded from the analysis.

The findings presented are preliminary, and while both Covered California and CalPERS followed the Milbank specifications for their analyses, differences in methodology may exist, particularly in how they estimated claims equivalence. The committee emphasized that all analyses should be considered approximate and preliminary as they move forward with their recommendations.

This meeting marks a significant step in understanding and addressing behavioral health spending in California, setting the stage for future discussions on health care affordability.