Health Care Issues

Dangers Of Health Care Mandates

Both federal and state governments are requiring insurance companies to pay for a wide array of medical procedures. These rules are generating alarming side effects, ranging from skyrocketing premiums to decreasing numbers of insured people, withdrawal of insurance companies from markets and reduced competition, health care analysts say.

  • Since the defeat of President Clinton's massive health care plan, states have mandated hundreds of health insurance benefits and the 104th Congress followed suit -- passing the first-ever federally mandated benefit, mental health benefits at parity with those for physical ailments.

  • In addition to requiring insurers to cover 48-hour hospital stays for maternity patients, more than 40 different mandate bills are before the 105th Congress.

  • At the state level, mandated benefits range from a low of six in Idaho to a high of 39 in Maryland.

  • Idaho's six mandates account for about 5 percent of the cost of claims, according to a General Accounting Office report, while mandates are responsible for 22 percent of costs in Maryland.

The Congressional Budget Office says a 1 percent rise in premiums forces 200,000 to abandon private health insurance. The percentage of the under-65 population covered by private insurance has steadily declined and insurance companies have fled high-regulation states like New York, New Jersey and Maryland.

Self-funded company health plans are exempt from mandates, but they often offer similar benefits to insurance company plans. Analysts say that since self-funded plans don't have to hassle with cumbersome mandates, they can offer the same benefits at lower costs.

Political observers say Congress seems about to subject such plans to the same mandates and requirements that are driving up the number of uninsured persons and driving insurance companies to withdraw coverage.

Source: Heather Nauert and Joel Mowbray (both of Pioneer Strategies, Inc.), "The Ills of Mandated Benefits," Washington Times, December 17, 1997.

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