Mandates drive up cost of coverage, group says

The Council for Affordable Health Insurance wants policymakers to know that when they complain about the rising cost of health insurance, they should realize they're partially to blame.

The climbing number of state-mandated health insurance benefits will inevitably increase the cost of health coverage for everyone, CAHI says after it reviewed a new report the group issued on health insurance mandates.

According to CAHI’s report, “"Health Insurance Mandates in the States, 2011,” over the last 20 years the number of state mandated benefits has grown to 2,262, which is an increase of 166 percent since 1992, when there were about 850 mandates across all 50 states.

A health insurance mandate requires insurers to cover specific health care providers, benefits or patient populations. Mandates make health insurance more expensive, CAHI says, because they require insurers to pay for care consumers previously funded out of their own pockets.

“Based on our annual analysis, mandated benefits currently increase the cost of basic health coverage from slightly less than 10 percent to more than 50 percent, depending on the state, specific legislative language, and type of health insurance policy," CAHI Research and Policy Director, Victoria Craig Bunce, in a press statement.

The group warns that the “mandate explosion” and the corresponding effect on the cost and availability of health insurance is a direct result of legislative action. “We hope this publication will encourage them to think twice when asked to sponsor or vote on legislation which contains a mandate providing services to the few at the expense of the majority.”

"The sheer number of state mandates will make it difficult for states to deliver on one of the key promises repeatedly made by supporters of the new federal health care reform law: that it would provide all Americans with affordable health coverage.  The recent guidance from the U.S. Department of Health and Human Services on the design of the essential health benefit plans ostensibly grants states the flexibility to craft affordable benefit packages suitable to their populations.  But those states that adopt their current small employer health insurance plan for this purpose will, as our report illustrates, shackle consumers with coverage that is already overloaded with dozens of existing state mandated benefits. These mandates, layered on top of the new federal coverage mandates, will inevitably drive up costs for everyone.  This will actually worsen, rather than fix, the issue of health insurance that is priced out of the reach of many individuals and small employers," said Roy Ramthun, CAHI's Director of Federal Affairs.

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