AVOIDING COSTLY MANDATED BENEFITS
July 28, 2005
Mandated health insurance benefits are state regulations that require insurers to cover specific services and specific providers. Currently, there are 1,823 state-mandated benefits among the 50 states, and an additional 295 mandates are now being debated in state legislatures, says Jack Strayer, a representative of the National Center for Policy Analysis.
Mandates cover services ranging from acupuncture to in vitro fertilization. They cover providers ranging from chiropractors to naturopaths. They cover bone marrow transplants in New Jersey, hairpieces for chemotherapy patients in Minnesota, marriage counseling in Connecticut and pastoral counseling in Maine.
- Currently, 11 states require insurers to cover marriage counselors, four mandate coverage for naturopaths, three cover midwives, 11 cover acupuncturists and four require coverage for massage therapists.
- Other states have mandated such procedures as in vitro fertilization (15 states), port-wine stain birthmark removal (two states), and treatments for morbid obesity (four states).
- Compared to the costs of barebones insurance, these kinds of mandated benefits hike premiums considerably, thus pricing otherwise healthy people out of the market.
- In fact, studies estimate that as many as one of every four uninsured Americans has been priced out of the health insurance market by mandates.
If mandates do so much harm, then why do they exist? Very few mandates have been enacted because of patient pressure, says Strayer; almost all are the result of the lobbying power of special interest providers. And once a state-mandated health benefit is enacted, it is almost impossible to get it repealed.
Not all states have been equally bad at limiting consumer choice and raising the cost of insurance. For example, people who live on the Arkansas side of Texarkana bear only 24 mandated benefits; whereas people on the Texas side must live with more than twice as many.
Source: Jack Strayer, "Health Insurance Choice," National Center for Policy Analysis, Brief Analysis No. 523, July 27, 2005.
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