Predicting the Cost of Mental Health Benefits

Actuarial and economic methods are combined to predict the costs of mental health and substance abuse benefits in insurance. Costs are predicted for two employers under alternative benefit plans that contain some of the features proposed under national health reform. The cost of a given benefit differs greatly across population groups. In order to make accurate cost forecasts, data on the group’s experience must be combined with research data on the impact of plan changes. Application of employers’ experience and research from mental health economics can contribute to better public and private decisions, including those that are part of current health reform.

Author(s): Thomas G. McGuire

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Volume 72, Issue 1 (pages 3–23)
Published in 1994