Wednesday, February 13, 2008

WSJ on Insurance Mandates

The February 8, 2008 Wall Street Journal published the following OpEd critical of insurance mandates. Here are some excerpts:
To hear some of the presidential candidates, you'd think that health-insurance companies are the driving force behind the growing cost of health insurance. The more likely culprits are our politicians and the laws they pass.

...A health-insurance "mandate" is a legislative requirement that an insurance company or health plan cover (or offer coverage for) common -- but sometimes not so common -- health- care providers, benefits and patient populations. They include:

- Providers such as chiropractors (mandated in 46 states) and podiatrists (35 states), but also massage therapists (four states) and naturopaths (four states);

- Benefits such as mammograms (50 states) and drug abuse treatment (34 states), but also morbid obesity treatment (four states) and wigs for cancer patients (10 states);

- Populations such as dependent students (30 states), but also grandchildren (four states).

Although there were only a handful of state mandates in the 1960s, CAHI's just released "Health Insurance Mandates in the States, 2008" has identified 1,961 nationwide -- up from 1,901 a year ago.

For almost every health-care product or service, there are at least two groups that want insurance to cover it: those who sell the products and services so they can get more business, and those who use the products and services to lower their out-of-pocket costs. Both of these highly motivated groups push state legislators -- and increasingly members of Congress -- to require insurance to cover the care. As a result, government interference in and control of the health-care system is steadily increasing -- and so is the cost of health insurance.

...Fortunately, a few states are recognizing that mandates make health insurance more expensive. At least 10 states now permit mandate-lite policies, which allow individuals to purchase a policy with fewer mandates and so are more tailored to their needs and financial situation. And there are now at least 30 states that require a mandate's cost to be assessed before it is implemented.

Mandates aren't the only things driving up the cost of health insurance. States that require insurers to accept any individual who applies, regardless of their health status, are imposing costly burdens on health insurance. And those costs get passed on to consumers -- if they decide to keep their coverage.

Before politicians jump on the anti-health-insurance bandwagon, they should look at the role they are playing in driving up costs. Making health insurance more affordable would be a lot easier if they would stop legislating what it has to cover.