Overview of the COMPARE Microsimulation Model

Concerns about the rates of uninsurance in the United States, coupled with rising health care costs, have made changes in health policy a priority on the U.S. public policy agenda. In the 2008 presidential race, candidates proposed a variety of policies aimed at expanding health care access and affordability, including individual mandates requiring all individuals to purchase health insurance, employer mandates requiring most businesses to offer insurance, changes in the tax treatment of insurance, and safety-net expansions. However, there is little prior experience on which to gauge the likely effect of these policies on costs, coverage, population health, and individual and employer behaviors. In response, RAND researchers created the COMPARE microsimulation model, which projects how households and firms would respond to health care policy changes based on economic theory, national survey data, and existing evidence from smaller-scale changes (e.g., changes in Medicaid eligibility) by using computer software to develop a synthetic U.S. population and simulating the likely effects of a variety of insurance-enrollment scenarios. The model currently addresses four types of coverage-oriented policy options: individual mandates, employer mandates, expansions of public programs, and tax incentives. However, it is flexible to permit expansion of the number and variety of policy options.