NCPA's Goodman Says State Mandates Often Needlessly Add to Insurance Cost; Uninsured
WASHINGTON, D.C. (June 19, 2003) — The U.S. House of Representatives today has been debating a bill to allow some Association Health Plans to bypass costly state regulations, like mandated benefits. National Center for Policy Analysis (NCPA) president John C. Goodman said the following about the cost of state mandates:
"Depending on the state, mandates can cover services ranging from acupuncture to in vitro fertilization, and providers ranging from chiropractors to naturopathy. These laws mean that if people buy insurance at all, they must purchase a bloated and expensive package of benefits designed by politicians. They are forbidden from buying insurance that fits their own preferences, and is tailored to individual and family needs.
"Mandated benefits raise the cost of insurance and make it considerably more expensive than barebones insurance. As a result, mandates price otherwise healthy people out of the market. In fact, studies estimate that as many as one out of every four uninsured Americans has been priced out of the market for health insurance by mandates. For example, requiring insurers to treat mental illnesses like physical illnesses could add up to $700 to the cost of a policy. Mandated coverage for substance abuse increases premiums by 6 to 8 percent.
"Very few mandates have been enacted because of pressure from patients. Almost all of them are the result of lobbying power of special interest providers, including many doctor groups. Chiropractors, psychologists physical therapists – these and many other groups descend like locusts on state legislatures each year, seeking more laws to require coverage of their services.
"While mandated benefits mean that people with health insurance have more health care options, they also mean that fewer people are insured. Employers, especially small businesses, who face ballooning health care costs often have no choice but to drop coverage all together."
A recent study by the NCPA estimates that AHPs have the potential to insure approximately 4.5 million workers and dependents who are currently uninsured.
For more information on AHPs or to speak with one of the NCPA's team of health policy experts, contact the NCPA Public Affairs office at 800-859-1154.