Absolute risk reduction (ARR):

Calculated as the difference between the proportion of the control group experiencing a particular outcome (e.g., death) and the proportion of the treatment group experiencing the outcome. This figure takes into account the size of the initial risk and the actual reduction effected by the treatment. (Contrast with relative risk reduction.) The reciprocal of ARR is the number needed to treat.

Accident & health products:

As defined by the California Department of Insurance, Health Insurance (Class 06 under Section 100 of the California Insurance Code) encompasses accident and health products. Accident coverage includes accidental death, accidental death, and dismemberment, accidental-only, other fixed-cash benefit plan (e.g., specified disease, hospital indemnity) and is referred to as Hospital, Medical, and Surgical - Indemnity products. Health coverage includes hospital-medical-surgical expense plans that reimburse for specific medical expenses incurred (also included are specified/dread disease and specialized health plans such as dental and vision that reimburse for specific expense incurred) and is referred to as Hospital, Medical, Surgical - Reimbursement products.

Accountable care organization (ACO):

An ACO is a healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers form an ACO, which then provides care to a group of patients. The ACO may use a range of payment models. The ACO is accountable to the patients and the third-party payer for the quality, appropriateness, and efficiency of the health care provided.


Related to the statistical work of actuaries, who calculate insurance and annuity premiums, reserves, and dividends. (See also Milliman.)

Actuarial value:

The percentage of total average costs for covered benefits that a health plan will cover. For example, if a plan has an actuarial value of 70%, on average, the covered enrollee would be responsible for 30% of the costs of all covered benefits. However, an enrollee could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy.

Actuarial value in the ACA:

In 2014, actuarial value began to be used to categorize health plans sold in the individual and small group markets into coverage tiers. These plans must conform to one of four coverage levels – Bronze, Silver, Gold, and Platinum – with actuarial values of 60 percent, 70 percent, 80 percent, and 90 percent, respectively.  (In limited circumstances, catastrophic plans that fall below this 60 percent threshold can be sold to individuals under 30 or who cannot afford health insurance).

Adverse selection:

In health insurance, the tendency of individuals with poorer-than-average health expectations to apply for or continue insurance to a greater extent than individuals with average or better-than-average health expectations (also called antiselection).

Annual Out-of-pocket Maximum:

The most an enrollee could pay for cost-sharing (copaymentscoinsurance, and deductibles) towards covered benefits in a 1-year period.

Any willing provider law:

A law that requires managed care plans to contract with all health care providers that meet their terms and conditions.

Balance billing:

In Medicare and private fee-for-service health plans, the practice of billing patients for the difference between a provider's actual fee and the amount the plan will pay (under Medicare, the difference is not to exceed 15% above the amount the plan will pay).

Baseline costs:

In CHBRP analyses, these are PMPM costs adjusted for California and used to compare with estimated cost differences resulting from a proposed mandate.

Behavioral Risk Factor Surveillance System (BRFSS):

Established by the Centers for Disease Control and Prevention in 1984, the BRFSS is a state-based system of telephone-conducted health surveys that generates information about health risk behaviors, clinical preventive practices, and health care access and use primarily related to chronic diseases and injury. BRFSS information may be used to identify emerging health problems; establish and track health objectives; develop, implement, and evaluate a broad array of disease-prevention activities; and support health-related legislative efforts. By 1994, all states, the District of Columbia, and three territories were participating in the BRFSS. (See also California Behavioral Risk Factor Survey.)


An individual entitled to benefits from a publicly-funded health insurance program.

Benefits not covered:

Health services not covered in an individual's health plan. In certain cases, a mandate may propose that a benefit that is currently not covered be covered in the future, and the CHBRP report will then estimate the cost of the service that is currently be paid for directly by patients (exclusive of deductible and cost sharing) as part of its financial analysis.


(1) When a point of view prevents impartial judgment on issues relating to the subject of that point of view. (2) Also, deviation of clinical results or inferences from the truth, or processes leading to such systematic deviation. Any trend in the collection, analysis, interpretation, publication, or review of data that can lead to conclusions that are systematically different from the truth. (See selection bias.)


In general, made or done without sight of certain objects or knowledge of certain facts by the participants. When used in the context of randomized clinical trials, this means keeping secret which treatment is assigned to participants. When only the subject is unaware of his or her treatment assignment, the study is single-blind. When neither the subject nor the researcher is aware of the treatment assignments, the study is double-blind.

California Behavioral Risk Factor Survey (BRFS):

An annual survey conducted since 1984 and funded by the Centers for Disease Control and Prevention that collects data on health-related behaviors in the California adult population, with a specific focus on behaviors related to disease and injury. The survey is part of a surveillance effort conducted by the California Department of Health Services and the Public Health Institute in cooperation with the Centers for Disease Control and Prevention. The survey contributes to the Behavioral Risk Factor Surveillance System.

California Department of Health Services (CDHS):

One of the largest departments in state government, CDHS administers a broad range of public and clinical health programs that provide health care services to Californians, including Medi-Cal.

California Department of Insurance (CDI):

Oversees the insurance industry in California and protects the state's insurance consumers. CDI regulates, investigates, and audits insurance businesses to ensure companies remain solvent and meet their obligations to insurance policyholders. Enforces laws of the California Insurance Code and regulates carriers that offer health insurance products. Issues certificates of authority to insurance companies seeking admittance to the California market and licenses agents, brokers, and other specified agents domiciled in the state.

California Employer Health Benefits Survey:

An annual survey of employers that provides data on trends in employer health insurance coverage, the cost of coverage, and other health insurance issues. The survey is funded by the California Health Care Foundation (CHCF) and the Center for Studying Health System Change (HSC). Data from this survey are used in CHBRP's cost model. (http://www.chcf.org/topics/healthinsurance/)

California Health and Safety Code (HS&C):

One of 29 codes that make up California law (in addition to the State Constitution and Statutes). This code encompasses laws on health and safety regulations, health facilities, health care service plans (see Knox-Keene Act), community care facilities, emergency medical services, and more. The laws in this code pertaining to health care service plans are regulated by the Department of Managed Health Care.

California Health Benefits Review Program (CHBRP):

A program established in 2002 to implement the provisions of California Health and Safety Code, Section 127660, et seq.). CHBRP responds to requests from the California Legislature to provide independent analysis of the medical, financial, and public health impacts of proposed health insurance benefit mandates and mandate repeals. A small analytic staff in the University of California's Office of the President coordinates the work of a task force of faculty from several campuses of the University of California, as well as Loma Linda University, the University of Southern California, and Stanford University, to complete each analysis. An independent actuary helps estimate financial impacts, and a National Advisory Council, composed of experts outside of California, reviews and comments on draft analyses before they are submitted to the Legislature.

California Health Care Foundation (CHCF):

CHCF is an independent philanthropy whose mission is to improve health delivery and financing in California. The organization funds research including the employer health benefits survey.

California Health Interview Survey (CHIS):

A random telephone survey of more than 55,000 households conducted every two years in multiple languages by the UCLA Center for Health Policy Research. It provides detailed information on demographics and health insurance coverage as well as health status and access to care in California. The survey allows CHBRP to estimate the number of people with individual health insurance and those with employer-sponsored insurance coverage.

California Insurance Code (IC):

One of 29 codes that make up California law (in addition to the State Constitution and Statutes). This code encompasses laws on a variety of insurance, including workers' compensation, automobile, life, fire, and mortgage. The laws of this Code are enforced by the California Department of Insurance.

California Public Employees' Retirement System (CalPERS):

A program that provides retirement and health benefits to more than 1 million California public employees, retirees, their families, and more than 2,500 employers. The program covers state employees by law, and local public agencies and school employers can contract to have CalPERS provide benefits to their employees.

California Simulation of Insurance Markets (CalSIM):

A micro-simulation model that can be used to estimate the impact of various elements of the ACA. Created by the UCLA Center for Health Policy Research and the UC Berkeley Center for Labor Research and Education, CalSIM uses a variety of official data sources, including the California Health Interview Survey.


A method of paying for health care services, often within managed care plans, in which a fixed, periodic fee is paid for each member (per capita) regardless of the actual cost or number of services provided during the set period of time.


In the context of insurance, a private entity (e.g., an insurance company) that assumes financial responsibility for health care.

Case-control study:

A retrospective, observational study in which a group of individuals with a disease or other condition (cases) is compared with a group of similar (e.g., in terms of age or sex) individuals who do not have the disease or condition (controls). This type of study is used to look for causal factors of a disease or condition.

CDC WONDER (Wide-ranging OnLine Data for Epidemiologic Research):

An Internet-based system that makes the information resources of the Centers for Disease Control and Prevention available to public health professionals and the public at large. It provides access to a wide array of public health information, including numbers and rates of sexually transmitted diseases, cancer cases, and deaths in the United States. Users can request data for any disease and demographic group by submitting ad hoc queries against available data sets.

Centers for Disease Control and Prevention (CDC):

An agency of the U.S. Department of Health and Human Services that develops and applies disease prevention and control, environmental health, and health promotion and education activities designed to improve the health of the people of the United States.

Centers for Medicare & Medicaid Services (CMS):

A federal agency within the U.S. Department of Health and Human Services that is responsible for, among other duties, administering Medicare and working with states to administer Medicaid. (Replaced the Health Care Financing Administration, or HCFA, in 2001.)

Children's Health Insurance Program (CHIP):

This program was enacted as part of the Balanced Budget Act of 1997, which established Title XXI of the Social Security Act and initially provided states with $24 billion in federal funds for 1998-2002 to target children in families with incomes up to 200 percent of the federal poverty level.  The program is funded jointly by states and the federal government, but administered by the states. States are permitted to use the funds to create a separate CHIP program, expand Medicaid through a CHIP Medicaid expansion program, or adopt a combination approach. California has adopted a combination approach. 

Clinical significance:

A medical judgment as to whether a treatment would have practical meaning to patients and health care providers. (Compare with statistical significance.) Even though an intervention is found to have a statistically significant effect, this effect might not be clinically significant. In a trial with a large number of patients, a small difference between treatment and control groups may be statistically significant but clinically unimportant. In a trial with few patients, an important clinical difference may be observed that does not achieve statistical significance. (A larger trial may be needed to confirm that this is a statistically significant difference.)

Clinical trial:

A scientific test of the effectiveness and safety of a therapeutic agent (as a drug or vaccine) using consenting human subjects.


A characteristic of managed care plans in which coverage is limited to providers in a designated panel or network and providers are either employees of the plan or are part of a group that contracts exclusively with the plan or are part of a group that contracts exclusively with the plan.

Cochrane Collaboration:

An international, independent, nonprofit organization founded in 1993 that produces and disseminates systematic reviews of health care interventions and promotes the search for evidence in the form of clinical trials and other studies of interventions. The major product of the Collaboration is the Cochrane Database of Systematic Reviews, which is published as part of the Cochrane Library, and also includes several other databases.

Cohort study:

A type of observational study, usually prospective, in which one group of individuals is or will be exposed to a presumed causal factor and another group is unexposed. The groups are followed up over time to determine who develops the outcome of interest and whether the outcome is related to the exposure. This study is primarily used to identify causal factors or the number of new cases of the outcome that occurs over time.


The percentage of covered health care costs, after any applicable deductible, for which a health plan member is responsible.

Commercial health insurance:

Health insurance products sold in the private market, as opposed to those provided through publicly-funded programs.  Same as private health insurance.

Confidence interval (CI):

A range of numerical expressions indicating the precision of an estimated population value in a statistical study.


In the context of a clinical study, an individual or group that does not have the disease or variable under study or that is receiving a placebo, no treatment, or standard treatment rather than the intervention under study. (See also case-control studycontrolled clinical trial.)

Controlled clinical trial:

A clinical study in which a group receiving an experimental treatment is compared with a control group receiving a placebo or a different treatment.

Copayment (copay):

A form of cost sharing in which a health plan member pays a specific amount out-of-pocket at the time of receiving a health care service or when paying for a prescription (after any applicable deductible).

Cost-effectiveness analysis:

A form of analysis that seeks to determine the costs and effectiveness of a medical intervention compared to similar alternative interventions to determine the relative degree to which they will obtain the desired health outcome.

Cost sharing:

A provision of a health insurance policy that requires the insured to pay some portion of medical expenses to providers or health insurer (e.g., coinsurancecopays, and deductibles).


In CHBRP analyses, the aggregate expenditures, or prices paid, for health care services (broken down into elements such as premiums and cost sharing amounts). See the Summary: Cost Impact Analysis for discussion of how cost elements are addressed in CHBRP analyses.


The scope of protection provided by a health insurance contract, which includes any of the listed benefits in the insurance policy.

Covered California:

The Covered California Health Exchange is the government agency offering subsidized Obamacare plans for this state. The California Health Exchange was created to assist citizens and legal residents with applying for marketplace coverage in order to comply with the Affordable Care Act (“ACA”). When the law was passed in 2010, each of the 50 states had to decide to either create a state-run health insurance exchange or offer enrollment through a federally-operated exchange. This state chose to create its own exchange and called it “Covered California.”

Covered benefits:

Health care benefits or services contractually provided by a health care service plan or a health insurance plan (use of the benefit or service may be subject to a deductiblecopay, or coinsurance).

Covered drug:

Every health plan must provide coverage for all medically necessary prescription drugs.  Covered drugs include those listed on the health plan's formulary or drug list as well as those drugs prescribed by a physician as medically necessary, or “off formulary.” Off formulary/non-formulary covered drugs usually require prior authorization.

Covered lives:

The number of people enrolled in a health insurance plan, including the policyholder and any dependents.

Cross-sectional study:

A type of observational study in which the characteristics of a general sample of people, some with the condition or disease under study and some without, are assessed at a given point in time. This type of study can help determine whether certain variables are associated with each other but cannot establish causation.

Crowd-out effect:

When new or expanded public health insurance programs, designed to extend coverage to the uninsured, prompt some privately-insured individuals or some employers to drop their private coverage and take advantage of the expanded public subsidy.

Current Procedural Terminology (CPT) Codes:

Numerical codes assigned to medical services and procedures to standardize claims processing and data analysis and to describe services in electronic transactions.



The amount a member  is required to pay out-of-pocket (OOP) before the health plan or policy begins to reimburse providers for medically necessary use of covered benefits.

Department of Managed Health Care (DMHC):

In California, this department licenses and regulates health care service plans through the authority of the Knox-Keene Health Care Service Plan Act of 1975.

Diagnostic service:

A medical service (e.g., a test) administered to individuals who have been identified as being at high risk for a disease but who do not have symptoms of a disease (as identified by a screening test), or a service or test used to identify the cause of abnormal physical signs or symptoms. In federal regulations, diagnostic services are defined as medical procedures or supplies recommended by a physician or other licensed practitioner of the healing arts, within the scope of his or her practice under state or territory law, to identify the existence, nature, or extent of illness, injury, or other health deviation in an individual.


Differences in the incidenceprevalence, mortality, and burden of diseases and other adverse health conditions that exist among specific population groups in the United States. Health disparities are the result of biological, genetic, social, cultural, and environmental factors, as well as specific health behaviors. Health disparities are also the outcome of racial and ethnic differences in rates of health care access, utilization, and quality. CHBRP's authorizing statute specifies that mandate analyses include data on "[t]he impact on the health of the community, including diseases and conditions where gender and racial disparities in outcomes are established in peer-reviewed scientific and medical literature."


Describes a clinical trial in which the subject(s) and the investigator(s) are unaware of the treatment assignment.

Drug class:

A grouping of pharmaceuticals that all treat a given condition in a similar way.  Drugs in a given class are usually molecularly similar.


In medical terms, the extent to which a treatment for a given medical problem is beneficial to patients under usual conditions of care and use. (Contrast with efficacy.)


In medical terms, the extent to which a treatment for a given medical problem is beneficial to patients under controlled conditions, especially those of a clinical trial.

Employee Retirement Income Security Act (ERISA):

A 1974 federal law enforced by the U.S. Department of Labor, Employee Benefits Security Administration (DOL-EBSA), which regulates employer-sponsored pension and insurance plans for employees. State health insurance laws do not apply to the subset of ERISA plans that are self-funded.


Individuals signed up for a health insurance plan or for a health insurance policy. Same as members.

Essential care providers (ECP):

Providers that serve a large proportion of low-income or medically underserved individuals. There are five ECP categories: Federally Qualified Health Centers, Ryan White Program Providers, Family Planning Providers, Indian Health Care Providers, Inpatient Hospitals, and Other ECP Providers. Other ECP providers include Substance Use Disorder Treatment Centers, Community Mental Health Centers, Rural Health Clinics, Black Lung Clinics, Hemophilia Treatment Centers, Sexually Transmitted Disease Clinics, and Tuberculosis Clinics.

Evidence of coverage (EOC):

A detailed summary of health care services available to members under a health insurance plan.

Excluded or “non-covered” drugs:

Drugs determined by a health plan to not be medically necessary and therefore not covered.  Pharmaceuticals that the plan never covers are explicitly excluded in the plan’s Evidence of Coverage.


In CHBRP analyses, total expenditures for health insurance and relevant services are presented as per member per month (PMPM) total premiums (the combined portion of premium paid by employer and employee, when applicable), plus out-of-pocket costs, plus the costs of benefits not covered (when applicable). The impact of a mandate on total expenditures is equal to the change in these same cost categories: the change in insured premiums, plus the change in member cost sharing, plus the change in expenditures for benefits not covered. 

Experimental study:

A study in which medical researchers intervene to change something (e.g., administer a drug or treatment to subjects) and then observe what happens (contrast with observational study). Clinical trials and randomized controlled trials are types of experimental studies.


See “Health insurance marketplace.”

False negative:

A negative test result in an individual who actually has the disease or characteristic being tested for. The patient is incorrectly diagnosed as not having a particular disease or characteristic. (Contrast with true negative.)

False positive:

A positive test result in an individual who does not have the disease or characteristic being test for. The patient is incorrectly diagnosed as having the particular disease or characteristic. (Contrast with true positive.)

Fee-for-service (FFS):

A health insurance plan in which members can seek care from the providers (physicians and hospitals) of their choice, and separate payment is made to the health care provider for each medical service rendered to the patient. This type of plan is typically called an indemnity plan and often includes a deductible. In California, these products are regulated by the California Department of Insurance (CDI).

First dollar coverage (FDC):

Refers to when plans or policies have no applicable deductible and the plan or insurer reimburses the price of a specific covered benefit for the first dollar spent on that service. Other forms of cost sharing, including copayments and coinsurance may still apply.

Flexible Spending Account (FSA):

An account which permit enrollees to make pre-tax contributions that may be used during the year to pay for eligible medical expenses. The Affordable Care Act put some additional limits on FSAs, including capping the amount that could be contributed in a year and limits on the use of FSA dollars for non-prescribed over the counter medications and premiums.


An explicit list of drugs drawn up by the health plan or its contracted pharmacy benefit manager, often those determined to be most useful in patient care. When used in conjunction with other tools or restrictions, a formulary can steer patients to “preferred” medication to treat a condition. For example, by dividing the plan into tiers of drugs with different cost sharing arrangements, or by requiring prior authorization or step therapy, the plan implicitly steers patients to those medications with the fewest requirements or least cost sharing.

Health Insurance Marketplace:

A platform that provides consumers health plan enrollment services, such as individual/family health insurance plans and governmental financial assistance, through websites, call centers and in-person assistance. The ‘Health Insurance Marketplace’ is also known as the ‘Marketplace’ or the ‘Exchange’.

Health care service plan:

Used in California law to refer to any person or entity that arranges for health care services to be provided to enrollees, or to pay for or reimburse any part of the cost for those services, in exchange for a prepaid or periodic charge paid by or on behalf of the enrollees (examples are HMOs). All health care service plans are regulated by the California Department of Managed Health Care (DMHC).

Health Cost Guidelines (HCGs):

Milliman's HCGs are a health care pricing tool used by many of the major health plans in the United States (see https://www.milliman.com/en/products/health-cost-guidelines-suite). Most of the data sources underlying the HCGs are claims databases from commercial health insurance plans.  The data are supplied by health insurance companies, Blues plans, HMOs, self-funded employers, and private data vendors.  The data are mostly from plans characterized as preferred provider plans or preferred provider organizations (PPOs).

Health insurance:

(1) Contractual financial protection against health care costs arising from the diagnosis and treatment of a covered medical condition, disease, or injury. Health insurance plans may be obtained by individuals or groups, may cover various scopes of benefits, and can use there are many different types of delivery systems, reimbursement arrangements, and funding sources. (CHBRP's authorizing statute specifies that, for its purposes, "health insurance" does not include supplementary insurance, vision-only, dental-only, or similarly limited insurance as indicated in section 127662, (c), (4).) (See also FFSHMOPOS, and PPO.) (2) While this term is often used broadly to encompass all products that insure against disease and injury, the California Insurance Code defines health insurance as "an individual or group disability insurance policy that provides coverage for hospital, medical, or surgical benefits."

Health insurer:

Generally, an entity that undertakes to indemnify another by health insurance. In California, an entity that provides health insurance products and is regulated by the California Department of Insurance (CDI).

Health Insurance Marketplace:

A platform that provides consumers health plan shopping and enrollment services through websites, call centers and in-person assistance. The Health Insurance Marketplace is also known as the ‘Marketplace’ and/or the ‘Exchange’.

Health maintenance organization (HMO):

HMOs provide geographically defined, closed-panel coverage that uses a designated panel or network (other than in emergency situations). The plan member is typically required to select a primary care physician from the HMO's provider panel; this physician provides the member with primary care and serves as the referral point to specialty care. In participating in the HMO's network, the primary care physician agrees to abide by the utilization management requirements and the fee schedules or other reimbursement approaches specified by the HMO. HMO coverage has lower member cost sharing than and includes certain preventive care services that generally are not covered by FFS or PPO plans. In California, HMOs are referred to as health care service plans and are regulated by the Department of Managed Health Care (DMHC).

Health Reimbursement Arrangement (HRA):

Medical care reimbursement plans established by employers that can be used by enrollees in employer sponsored health insurance plans and policies to pay for health care. HRAs are funded solely by employers. HRAs often are offered along with a high deductible health plan (HDHP). In such cases, the employee pays for health care first from his or her HRA and then out-of-pocket until the health plan deductible is met.

Health Research and Educational Trust (HRET):

An independent, nonprofit organization that engages in timely research and education on issues of critical interest to hospitals and health systems and the communities they serve. Examples of HRET's focus areas include enhancing and measuring community health, expanding coverage and access, and improving patient safety and quality of care. HRET is an affiliate of the American Hospital Association and regularly works with hospitals and health systems, academic, research, government, policy, and community organizations.

Health Savings Account (HSA):

A tax-free savings account used in conjunction with a high-deductible health insurance plan/policy that can be used to pay for medical expenses. To be eligible to establish an HSA for taxable years beginning after December 31, 2003, a person must be enrolled in an HSA qualified HDHP.

Health System Change (HSC):

The Center for Studying Health System Change is a nonpartisan research organization located in Washington, D.C., that conducts research on the U.S. health care system including the employer health benefits survey.

High Deductible Health Plan (HDHP):

A type of health plan with a higher deductible than a traditional health insurance plan. HDHP’s are not allowed to have separate medical and pharmacy deductibles. Requirements of HDHP’s are set by federal regulation. For 2022, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. Some enrollees in HDHPs have and Health Savings Accounts (HSAs), but a greater number are in non-HSA plans/policies.


The International Statistical Classification of Diseases and Related Health Problems, Clinical Modification, 10th Revision, is based on the ICD-10, a publication of the World Health Organization used internationally to code, classify, process, and present mortality data for statistical purposes. All changes to the ICD-10-CM system are overseen by the National Center for Health Statistics (NCHS) and the Centers for Medicare & Medicaid Services (CMS). ICD-9 is the abbreviation for prior version of the ICD.


The quantifiable effect or change a proposed mandate for health care benefits may have on defined aspects of public health; medical effectiveness; and availability, use, and cost of services and benefits and their coverage, as specified by the program's authorizing statute for CHBRP analyses. The extent to which defined variables of public health, medical effectiveness, and health care costs are predicted to increase, decrease, or shift as a result of a legislated mandate for health care benefits and/or services.


The rate of occurrence of new cases of a disease or condition in a population at risk during a given period of time, usually one year.


To secure against hurt, loss, or damage; to compensate or reimburse for incurred hurt, loss, or damage.

Indemnity plan:

Typically, a fee-for-service plan in which members can seek care from the providers (physicians and hospitals) of their choice, and separate payment is made to the health care provider for each medical service rendered to the patient. This type of plan often includes a deductible and in California is regulated by the California Department of Insurance (CDI).

Individual health insurance:

Health insurance coverage provided to an individual (and sometimes members of the individual's family) without association with an employer group or other organization.

In-network provider:

Refers to providers that have a contract with the health plan or insurer to render services at an agreed-upon rate. Utilization of these services by an enrollee may involve cost sharing for the enrollee depending on the plan or policy.


The one to whom or at whose direction an insurer reimburses losses, pays benefits, or provides services.

Kaiser Family Foundation (KFF):

A nonprofit, private operating foundation focusing on major health care issues facing the United States. The Foundation is an independent voice and source of facts and analysis for policymakers, the media, the health care community, and the general public.

Knox-Keene Act:

The Knox-Keene Health Care Service Plan Act of 1975, as amended, is a statute passed by the California Legislature to govern health care service plansHMOs and several PPOs fall under this authority. The Knox-Keene Act is codified in the California Health and Safety Code, Section 1340-1345, and the regulations therein are enforced by the California Department of Managed Health Care (DMHC).

Large-group health plan:

For purposes of CHBRP analyses, large-group health plans describe coverage for 51 or more employees in the commercial market. State health insurance laws typically also use this definition.

Managed care plan:

Health care coverage offered within a financial and clinical delivery system that uses specified processes for controlling health care costs, accessibility, and quality throughout a particular network of health care providers and hospitals. Managed care plans can include HMOPPO, and POS models.

Managed Risk Medical Insurance Board (MRMIB):

An organization created in 1990 to advise the Governor and the legislature on strategies for reducing the number of uninsured persons in the state. It administers the Healthy Families Program (HFP), Access for Infants and Mothers (AIM) program, the Major Risk Medical Insurance Program (MRMIP), and the County Children's Health Initiative Program (CCHIP).

Mandated benefit or service:

In the context of CHBRP analyses, a mandated benefit or service requires a health care service plan or a health insurer, or both, to do any of the following:

  1. Permit a person insured or covered under the policy or contract to obtain health care treatment or services from a particular type of health care provider.
  2. Offer or provide coverage for the screening, diagnosis, or treatment of a particular disease or condition.
  3. Offer or provide coverage of a particular type of health care treatment or service, or of medical equipment, medical supplies, or drugs used in connection with a health care treatment or service.

A health coverage program for low-income individuals authorized by Title XIX of the Social Security Act. The program is partially federally funded and has federal guidelines, but each state establishes its own eligibility, benefit, and payment criteria.


California's Medicaid program, providing health and long-term care coverage to eligible low-income children and their families as well as individuals who are elderly or have a disability. The California Department of Health Services administers the program, and county social service departments handle enrollment.

Medically necessary:

A treatment or service that is appropriate and consistent with a patient's diagnosis and that, in accordance with locally accepted standards of practice, cannot be omitted without adversely affecting the patient's condition or quality of care.


A federally-funded health insurance program primarily for Social Security beneficiaries aged 65 years or older established by Title XVIII of the Social Security Act of 1965. People with disabilities who are younger than 65 years may also be covered under Medicare after receiving two continuous years of Social Security disability benefits, and individuals with end-stage renal disease may also receive Medicare coverage. Medicare is administered by the Centers for Medicare & Medicaid Services and consists of Part A, hospital insurance (which also covers skilled nursing homes and home health care), which requires deductibles and some copays; and Part B, supplementary medical insurance (which covers, among other benefits, some physician services, lab work, and medical equipment), which is optional and additionally requires payment of a monthly premium (often deducted from an individual's Social Security benefit payment). States do not have authority for mandating benefits under the Medicare program; therefore, individuals covered under Medicare are not included in figuring baseline costs.

MEDLINE (Medical Literature, Analysis, and Retrieval System Online):

A bibliographic database containing more than 12 million journal articles in the life sciences, with a concentration on biomedical articles. It is part of the U.S. National Library of Medicine's PubMed service.


In the context of CHBRP analyses, members refers to individuals who are enrolled in and receive coverage from a health care service plan, or insurance policies.


A quantitative statistical analysis that is applied to separate but similar experiments of different and usually independent researchers and that involves pooling the data and using the pooled data to test the effectiveness of the results.

Metal Tier:

Beginning in 2014, the Affordable Care Act (ACA) requires health insurance plans in the individual and small group markets to provide insurance plans by four standard levels of coverage. These four levels are called "metallic tiers" of coverage, or "coverage tiers".


An international consulting firm specializing in risk evaluation and product design; one of the largest and independent actuarial consulting firms in the United States, dealing with health care, life insurance, property and casualty insurance, and employee benefits. CHBRP's authorizing statute specifies that a "certified actuary or other person with relevant knowledge and expertise" assess and analyze the financial impact of a mandated benefitCHBRP contracts with an independent actuary to fulfill this requirement.

National Advisory Council (NAC):

A balanced and varied group of experts and stakeholders from outside California that advises CHBRP on program direction and strategy. Five members of the NAC review each draft bill analysis for 1) accuracy and objectivity, 2) responsiveness to the legislative request, 3) completeness, and 4) clarity of presentation. Current members of NAC.

Negative predictive value (NPV):

The probability that an individual does not have the condition or disease if the test result is negative (the number of true negatives divided by the total of true negatives plus false negatives).

Network adequacy:

Refers to the ability of a health plan or policy to provide enrollees with timely access to a sufficient number of in-network providers, including primary care and specialty physicians, as well as other health care services included in the benefit contract. (See CHBRP’s 2015 Insurer Provided Networks explainer for more information).

Number needed to treat (NNT):

How many people need to be treated in order to see a desired outcome in one additional individual. This number helps assess benefits versus risks. It is expressed as the reciprocal of the absolute risk reduction.

Observational study:

A study in which researchers examine medical histories, changes, or differences among participants without intervening. Such studies are subject to selection bias. Observational study types include cross-sectionalcohort, or case-control (contrast with experimental study).

Out-of-network provider:

Refers to any provider that does not have a contract with a given health plan or insurer; therefore, the health plan or insurer is not required to reimburse these providers for services rendered. In such a case, the enrollee may be responsible for the entirety of the provider’s fee, or the health plan or insurer may provide less reimbursement than for in-network providers. Utilization of these services by an enrollee may involve cost sharing for the enrollee depending on the plan or policy.

Out-of-pocket (OOP) costs:

Costs that enrollees in health plans or insurance plans must pay for covered health care services rendered, including deductiblescopayments, and coinsurances. Some plans may include a maximum limit of such costs a member must pay for some health care services during a specified time period. In some instances, the portion of the premium that enrollees pay are included in out-of-pocket costs.

Peer-reviewed journal:

A journal consisting of content that has been read, scrutinized, and commented on by experts, as directed by the journal's editorial staff.

Per member per month (PMPM):

In CHBRP analyses, this is a measure for dividing estimated benefit costs of and premium rates paid by each member and employer (when the latter is applicable) for a health plan each month. For further explanation of the methodology employed to determine CHBRP's PMPM rates, see Cost Impact Analysis and Research Approach.

Pharmacy benefit manager (PBM):

A company under contract with employers, health plans, insurers, self-insured companies, and government programs to manage prescription drug benefits. Basic management techniques include pharmacy network management, formulary management, and drug utilization review. Many PBMs also provide disease management programs.


In the context of a clinical study, an inert or innocuous substance used especially in controlled experiments testing the efficacy of another substance (as a drug).

Point of service (POS):

This refers to a type of closed-panel health care service plan that allows members to use providers and services outside the panel, typically subject to paying a higher level of cost sharing.

Positive predictive value (PPV):

The probability that an individual has the condition or disease if the test result is positive (the number of true positives divided by the total of true positives plus false positives).

Preferred drug:

A preferred drug is one to which a health plan or its pharmacy benefit manager creates incentives through to use in treating a particular condition.  The incentives can include lower cost-sharing in a tiered formulary or no requirements for prior authorization or step therapy.

Preferred provider organization (PPO):

Provides a type of health insurance plan that uses a usually discounted fee-for-service approach to paying providers. Members must use hospitals and providers in a designated network in order to receive the highest level of benefit coverage. If a member chooses to use an out-of-network provider, the services may be covered, but the member must pay a substantially greater level of cost sharing. PPOs in California can be regulated either by the California Department of Insurance or the Department of Managed Health Care, depending on how the underwriting company (the company backing the policy) is licensed.


The amount paid to a health plan or health insurance company by the buyer of health insurance, which is an employer, a beneficiary of coverage, or both, for a specified period of coverage. CHBRP's estimates of premiums include actuarial estimates of the utilization rates for each mandated service multiplied by the expected payment per unit of service, plus estimated administrative costs associated with the mandated benefit.


The number of people in a population with a specific disease or condition at a given time (usually expressed as a ratio of the number of affected people to the total population). (Contrast with incidence.)


Population based medicine to prevent or slow the progression of disease through such measures as immunization, screening programs, prophylactic treatment, and lifestyle guidelines.

Preventive service:

A service that is part of a strategy for health promotion or disease prevention that may include counseling (such as prenatal), screening (such as cancer), exams (such as physicals), immunization, or other interventions for individuals in clinical settings.

Prior authorization:

The health plan or pharmacy benefit manager must authorize a particular prescription before it can be filled. Prior authorization also may be used in conjunction with a step therapy system, so that a patient might be required to try a less expensive drug before receiving authorization to receive the drug originally requested.

Private health insurance:

Health insurance products sold in the private market, as opposed to those provided through publicly-funded programs.  Same as commercial health insurance.


(adj.) Guarding from or preventing the spread or occurrence of disease or infection; preventive.

Public demand:

CHBRP's authorizing statute specifies that CHBRP include in its analysis of mandate bills the level of "interest of collective bargaining agents in negotiating privately for inclusion of this coverage in group contracts, and the extent to which the mandated benefit or service is covered by self-funded employer groups."

Public health:

Within the context of CHBRP's authorizing statute, this describes the health of the community, as measured, in part, by the reduction of communicable disease, the benefits of preventive services, and the reduction of premature death and economic loss associated with disease particularly in relation to a health benefit mandate and its estimated effects.

Public health insurance:

Refers to health coverage funded through governmental entities (e.g., Healthy Families Program (California's SCHIP program), Access for Infants and Mothers (AIM) program, Major Risk Medical Insurance Program (MRMIP), Medi-Cal (California's Medicaid program), and Medicare).

Public Health Institute (PHI):

An independent, nonprofit organization dedicated to promoting health, well-being, and quality of life for people throughout California, across the nation, and around the world. (Conducts the California Behavioral Risk Factor Survey.)

Qualified health plans (QHPs):

Plans and polices sold through a state marketplace, such as Covered California. They meet specific requirements set by the Affordable Care Act (ACA). In California, these plans are subject to state regulation by DMHC or CDI.

Randomized controlled trial (also called randomized clinical trial) (RCT):

An experimental study design used to test the safety and efficacy of a medical technology (as a new drug or treatment) in which people are randomly allocated to experimental or control groups and outcomes are compared. This type of trial is less subject to biased results than nonrandomized trials such as observational studies. Effects demonstrated in RCTs are unlikely to be duplicated at the same level in the population, because the trials are conducted in tightly controlled circumstances, which do not necessarily represent care provision and treatment compliance in the general population. (See also efficacy vs. effectiveness.)


In the context of CHBRP analyses, a repeal is a proposed statute that would repeal an existing mandated benefit or service.

Relative risk reduction (RRR):

Calculated as the difference between the proportion of the control group experiencing a particular outcome (e.g., death) and the proportion of the treatment group experiencing the outcome, divided by the proportion of the control group experiencing the outcome. Expressed as a percentage of the control group. (Contrast with absolute risk reduction.)

Risk factor:

Something that increases an individual's chances of developing a condition or disease (but may not cause the condition or disease).

Screening service:

A test or program intended to determine whether a health problem may be present in a subject even if the subject has not experienced any symptoms of the problem (e.g., mammograms for breast cancer). (See also preventive service and diagnostic service.) Screening is used to flag high-risk individuals for more definitive study. In federal regulations, screening services are defined as the use of standardized tests given under medical direction in the mass examination of a designated population to detect the existence of one or more particular diseases or health deviations or to identify for more definitive studies individuals suspected of having certain diseases.

Selection bias:

In studies of health interventions, a distortion of results and the comparability of the experimental and control groups due to one or more differences between the chosen groups (e.g., one group may be healthier overall, given the population from which the group was drawn).

Self-funded (or self-insured) plan:

A health plan in which a group, usually a large employer, labor union, or group of employers, assumes financial responsibility for the health care expenses of its members rather than purchasing health insurance through an insurance company. However, such a group may contract with an insurance or other company (as a third-party administrator) for claims processing and other administrative services and may purchase reinsurance to limit its liability for medical claims (sometimes called stop-loss insurance). Self-insured plans are regulated exclusively under ERISA, though some state regulations apply, depending on the third-party administrator.


One measure of the validity (or accuracy) of a diagnostic or screening test: The percentage of all individuals who actually have the disease or condition being tested who are correctly identified as positive by the test (calculated as the number of true-positive test results divided by the number of patients who actually have the disease, the latter being the sum of true positives plus false negatives). (Compare with specificity.)

Small-group health plan:

For purposes of CHBRP analyses, small-group health plans describe coverage for two to 50 employees in the private sector. State health insurance laws typically also use this definition.


One measure of the validity (or accuracy) of a diagnostic or screening test: The percentage of all individuals who do not have the disease or condition being tested for who are correctly identified as negative by the test (calculated as the number of true-negative test results divided by the number of patients who actually do not have the disease, the latter being the sum of true negatives plus false positives). (Compare with sensitivity.)

State Children's Health Insurance Program (SCHIP):

This program was enacted as part of the Balanced Budget Act of 1997, which established Title XXI of the Social Security Act and initially provided states with $24 billion in federal funds for 1998-2002 to target children in families with incomes up to 200 percent of the federal poverty level.  California's SCHIP program is Healthy Families Program. 

Statistical significance:

The likelihood that an observed association is not due to chance. It is highly dependent on sample size and not indicative of the magnitude of a clinical effect. (Compare with clinical significance.)

Step therapy:

A utilization management protocol where payment for a drug is restricted unless certain other drug therapies have been tried first.  These programs are sometimes referred to as fail-first requirements since a certain drug cannot be prescribed until other therapies have been tried first and shown to be ineffective.


Indicative; relating to or constituting the aggregate of symptoms of a disease.

Systematic review:

A review of studies in which evidence has been systematically searched for, studied, assessed, and summarized according to predetermined criteria. Systematic reviews often use meta-analysis to summarize results of comparable studies.

Social drivers of health (SDOH):

As defined by the World Health Organization, the non-medical factors that influence health outcomes. They are the conditions in which people are born, grow, work, live, and age, and are the wider set of forces and systems shaping the conditions of daily life. These forces and systems include economic policies and systems, development agendas, social norms, social policies and political systems. Also referred to as "social determinants of health". 

Therapeutic services:

Therapies generally prescribed by a physician to rehabilitate or treat a condition related to an individual's developmental disability or special needs (e.g., occupational therapy, physical therapy, recreational therapy, speech therapy, or skilled nursing services).

Tiered formularies/tiered cost-sharing:

Tiered copayments are used to vary cost sharing to provide incentives for patients to use the least expensive, appropriate medication. The simplest form of tiered copayments is to require one copayment for generic drugs and a somewhat higher copayment for brand name drugs.  Three tiers are also common, where the generic drug has the lowest copayment, the preferred brand name drug has a somewhat higher copayment, and all other brand-name drugs have the highest copayment.

True negative:

A negative test result in an individual who does not have the disease or characteristic being test for. (Contrast with false negative.)

True positive:

A positive test result in an individual who has the disease or characteristic being test for. (Contrast with false positive.)


In CHBRP analyses, describes a health insurance product other than a self-funded plan. Underwriting is the process of identifying and classifying the degree of risk represented by a proposed insured.


In CHBRP analyses, the frequency or volume of use of a mandated service. This is calculated as the product of the number of health plan members who use the mandated service and the average number of mandated services they use per calendar period.