Mandates drive up cost of care, limit poor’s access

Mandated benefits are driving up the cost of health insurance and pricing poor people out of the market, often for benefits only a small percentage of recipients use, experts told legislators during a Capitol Hill briefing in February.

These mandated benefits include treatment by chiropractors or naturopaths and services ranging from acupuncture to in vitro fertilization. Such benefits often are won by special interest groups in state legislatures, says Merrill Matthews, vice president of the National Center for Policy Analysis (NCPA).

Premiums increase as much as 21%

Matthews says studies in six states have found that mandated coverage accounts for 7% to 21% of all insurance claims. One study found that mandated coverage increases insurance premiums by 6% to 8% for substance abuse, 10% to 13% for outpatient mental health care, and 21% for psychiatric hospital care for employee dependents.

He quoted one estimate that claimed the mandates priced one of every four uninsured persons out of the market. In 1965, there were only seven state-mandated benefits. Since then, states have imposed nearly 1,000 insurance mandates, the NCPA says. Congress has enacted two federal mandates: a minimum two-day hospital stay for childbirth and the requirement to cover mental health care to the same limit as physical health care.