Published Date: August 06, 2023

Summary: Amid the successes of local sugar-sweetened beverage (SSB) taxes, interest in state-wide policies has grown. This study evaluated the cost-effectiveness of a hypothetical 2-cent-per-ounce excise tax in California and implications for population health and health equity. Using the CHOICES microsimulation model, authors projected the tax impacts on health, health equity, and cost-effectiveness over ten years in California, both overall and stratified by race/ethnicity and income. Expanding upon prior models, differences in the effect of SSB intake on weight by BMI category were incorporated. Costing was performed in 2020, and analyses were conducted in 2021-2022.

Findings: The tax is projected to save $4.55 billion in healthcare costs, prevent 266,000 obesity cases in 2032, and gain 114,000 quality-adjusted life years (QALYs). Cost-effectiveness metrics, including the cost/QALY gained, were cost-saving. Spending on SSBs was projected to decrease by $33/adult and by $26/child in the first year overall. Reductions in obesity prevalence for Black and Hispanic Californians were 1.8 times larger compared to white Californians, and reductions for adults with lowest incomes (<130%FPL) were 1.4 times the reduction among those with highest incomes (>350%FPL). The tax is projected to save $112 in obesity-related healthcare costs per $1 invested.

Authors conclude a state-wide SSB tax in California would be cost saving and lead to reductions in obesity and improved SSB-related health equity, and lead to overall improvements in population health. The policy would generate more than $1.6 billion in state tax revenue annually that can also be used to improve health equity.

State-level California Health Interview Survey (CHIS) data from 2011–2017 were used as calibration targets in the simulation.