NCPA - National Center for Policy Analysis


February 9, 2007

Enthusiasm for universal healthcare coverage has swept the nation, with governors in Massachusetts and California leading the way.  But the proposals under consideration do little to address the primary reason for the lack of coverage -- very expensive insurance, says Sally C. Pipes, president and CEO of the Pacific Research Institute.

One major reason for the cost spiral is government meddling in the market for health insurance, particularly through the imposition of restrictive mandates and regulations:

  • The average state has 36 mandates on an individual health insurance policy.
  • With each mandate, the cost to the consumer goes up; these mandates often stand in the way of making health insurance more affordable in the first place.

Given that we all indirectly absorb those costs thanks to higher premiums, it should come as no surprise that the universal program placing mandates on employees is destined to fail because it's prohibitively expensive, says Pipes :

  • In Massachusetts, estimates now show that the monthly costs for an individual will be $380, almost double what the designers predicted.
  • A movement to exempt those earning up to three times the federal poverty line or $60,000 per year for a family of four is already gaining momentum.

Removing mandates from insurance policies may not grab headlines like the universal proposals of California Gov. Schwarzenegger and former Massachusetts Gov. Mitt Romney, but such a strategy will be far more effective in expanding coverage and lowering cost.

The conversation about health care reform is long overdue, but unfortunately for most consumers, it's headed in the wrong direction, says Pipes.  Without addressing the high costs of health care, efforts to achieve universal coverage by legislative fiat will fail.

Source: Sally C. Pipes, "Eliminating government mandates would lower cost of health insurance," Indianapolis Star, February 9, 2007.


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