The Cost of State Health Insurance Mandates

Mar 28, 2007

  1. Sam
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    Sam Founder Administrator

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    I thought this was pretty interesting. I wonder what the effect of a single federal uniform mandate would have on insurance costs.

    http://www.ncpa.org/sub/dpd/index.php?page=article&Article_ID=14359

    HEALTH INSURANCE MANDATES AND THEIR COSTS

    A health insurance "mandate" is a requirement that an insurance company or health plan offer coverage for common -- but sometimes not so common -- health care providers, benefits and patient populations. For almost every health care product or service, there is someone who wants insurance to cover it so that those who sell the products and services get more business and those who use the products and services don't have to pay out of pocket for them, says the Council for Affordable Health Insurance (CAHI).

    Consider:

    * Mandated benefits currently increase the cost of basic health coverage from a little less than 20 percent to more than 50 percent, depending on the state.
    * By the late 1960s, state legislatures had passed only a handful of mandated benefits; today, the CAHI has identified more than 1,900 mandated benefits and providers and more are on their way.

    Mandate legislation differs from bill to bill and from state to state, says the CAHI:

    * For example, one state may require insurance to cover a limited number of chiropractor visits per year, while another state may require chiropractors to be covered equally with medical doctors.
    * The second will have a greater impact on the cost of a health insurance policy than the first.

    Consider the following mandates and their estimated costs:

    * Drug abuse treatment, 1 percent.
    * Hair prosthesis, 1 percent.
    * In vitro fertilization, 3 percent to 5 percent.
    * Acupuncturists, 1 percent to 3 percent.
    * Massage therapists, 1 percent.

    In the aggregate, mandates drive up the cost of health insurance. But determining the impact in a particular state requires careful analysis of each piece of mandate legislation, as well as other regulations that have been promulgated, says CAHI.

    Source: Victoria Craig Bunce and Vlasta Prikazsky, "Health Insurance Mandates in the States 2007," Council for Affordable Health Insurance, 2007.

    For text:

    http://www.cahi.org/cahi_contents/resources/pdf/MandatesInTheStates2007.pdf

    For more on Health Issues:

    http://www.ncpa.org/sub/dpd/index.php?Article_Category=16
     
    Sam, Mar 28, 2007
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  2. somarco
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    somarco That Medicare Expert Guy

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    HIPAA compliance can add as much as 67% to a rate here in GA on small group. I understand in some states it can be 100% +.
     
    somarco, Mar 29, 2007
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  3. scottishX
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    scottishX Expert

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    Wow That's Crazy!!!
     
  4. somarco
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    somarco That Medicare Expert Guy

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    What is crazy?

    Mental health parity adds 5 - 10% to premiums. Now the federal govt wants to expand this coverage to include alcohol & substance abuse and make it a national mandate.
     
    somarco, Feb 1, 2010
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  5. ridered
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    ridered New Member

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    If your paying 5-10% for mh parity act I have some land for sale....

    We have 2 in PA, 1 Fed (Mental Health) 1 at the state level (autisim)

    Each add about 1-1.5%
     
    ridered, Feb 2, 2010
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  6. somarco
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    somarco That Medicare Expert Guy

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    I don't believe you are comparing apples to apples. Full parity, at least as proposed in the recent Senate bill, is quite costly and the full cost vs no DAMN coverage is indeed in xs of 5%.

    And the word is "you're", not "your".
     
    somarco, Feb 2, 2010
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  7. ridered
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    ridered New Member

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    Sorry I used the wrong word my bad, I hope you fell better pointing that out.

    The Parity Act that was passed and is current law,(Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008) mandates that the coverage be raised to match your current Med/Surg coinsurance. So most MH was 50% if you have 100% coinsurance on all other benefits MH will now match this, being worth 1-1.5% on the group side.
     
    ridered, Feb 3, 2010
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  8. somarco
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    somarco That Medicare Expert Guy

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    Are you an actuary?

    The parity act makes many changes, including lifting the annual or lifetime limits for DAMN benefits. I don't believe you are aware of how expensive (and lengthy) such treatment can be and how it can and will impact claims.
     
    somarco, Feb 3, 2010
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  9. bill3173
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    bill3173 Guru

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    I would like to back you up on that Statement. I have someone on a group policy that has multiple issues regarding alcoholism and if I told you what has been paid out in the last 5 yrs, you'd flip. Literally, you'd do a flip.
     
    bill3173, Feb 12, 2010
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  10. sman
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    sman Guru

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    How does one "fell" better?
     
    sman, Feb 12, 2010
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