Study estimates 12 popular health mandates raise premiums 30%
Study estimates 12 popular health mandates raise premiums 30%
State mandates are hot issue
Drive-through deliveries became such a lightning rod issue two years ago that President Clinton pledged during the Democratic Convention that he would support a bill to mandate 48-hour hospital stays for women giving birth. Now there are dozens of state bills and a federal bill that mandate 48-hour maternity stays.
In fact, states have passed more than 1,000 different health mandates, and the list is growing daily, a brief study sponsored by the National Center for Policy Analysis, a think tank located in Dallas, finds.
The study also states mandates raise the overall cost of health care. Some physicians report increases in patient visits soon after a particular mandate is passed. But others say the mandates have a negligible effect on their patient census. Whether a health care provider supports or opposes mandates, it’s important to know the pros and cons of the issue because every state has at least a few. And some states, such as Maryland, Minnesota, Florida, and California, have more than 30.
Some experts predict the influx of mandates will have a cumulative effect of making insurance too costly. This could result in a backlash among insurers and businesses, causing them to lower payments for mandated procedures or raise premiums to consumers. "The primary problem with mandates is they drive up the cost of health insurance and force people at the margin to cancel their policies," states Merrill Matthews Jr., PhD, vice president of domestic policy for the center.
The center’s brief analysis of mandates, which was conducted by the actuarial firm Milliman & Robertson, based in Brookfield, WI, estimated that the 12 most popular mandates collectively could raise insurance costs by 30%, for a total of $525 to $1,050 a year. This is based on the assumption that a mandate-free health insurance policy costs a family $3,500 a year. (See mandates chart, p. 134.)
How this affects physician practices is unclear. Several physicians and experts say mandates have at least an indirect effect. "The thing that aggravates us sometimes is all the cost increases are blamed on physicians," says Ken Lamastus, CA, executive vice president of the Arkansas Medical Society in Little Rock.
Lamastus says he doesn’t know what physicians can do to counter that perception. "If I had a good answer to it, I’d be out there shouting it on the rooftop," he says.
The Arkansas Medical Society has not supported many of the health care mandates, particularly those that relate to other health care disciplines, Lamastus says. These types of mandates typically require insurance companies to provide coverage for specific providers, such as chiropractors, dentists, psychologists, speech therapists, and a host of others.
"In general, I think those tend to increase the cost of health insurance," Lamastus says. "If you mandate for something, then over time you’re obviously going to be faced with higher costs." The other providers want to provide care without a referral from a physician in many cases, he notes. "And that certainly can raise costs or why else would they be striving so hard for the mandates?"
The American Medical Association in Chicago supports mandates that ask employers to offer more choices in insurance coverage, and the AMA supports insurance coverage for people with mental health problems, says Timothy T. Flaherty, MD, radiologist and a member of the executive committee of the board of trustees for the AMA. He works for Radiology Associates of the Fox Valley in Neenah, WI. "We don’t think there should be discrimination between people who have mental health problems vs. people who have problems with their big toe," Flaherty says.
This is one of the strongest areas of contention in the issue of mandates because insurers fear that mandated mental health coverage will encourage more people to seek these services and drive up costs.
The National Center for Policy Analysis’ report concluded that mandated mental health care would drive up costs by 5% to 10%, or hundreds of dollars per family each year. Although a national bill was passed with this mandate, it was rendered impotent by a rider that said companies didn’t have to adopt the coverage if it would increase the cost of health insurance by more than 1%, Matthews says.
Like chiropractic treatment, it’s a service that people often already pay out-of-pocket. So the theory is if they now find it subsidized by an insurance company, they’ll use the service even more frequently.
Matthews uses an example of a person who was seeing a chiropractor once a month and paid $40 cash each time. If suddenly this cost is picked up by the insurance company and the person now only has to pay $10 per visit, the person may be tempted to increase the number of visits to four times a month while still paying $40 a month.
This is also the reason why mandates rarely lower health insurance costs despite their emphasis on prevention and providing access to sometimes lower-cost providers, Matthews says.
On the other hand, even some of the best-intentioned mandates backfire on the physician groups and consumers who push for them.
In Pennsylvania, a mandate requiring annual cervical cancer screening resulted in insurance companies lowering their reimbursements for those procedures to below what Medicaid was paying, says Kathryn Moore, managing director for government relations for the American College of Obstetricians and Gynecologists in Washington, DC.
These reduced reimbursements resulted in physician’s fees being cut drastically when they performed this procedure, she adds. "When we passed a mammography screening, insurers sent out misleading promotional brochures to beneficiaries and prospective enrollees that said they’d have to increase everybody’s premium across the board because of this new benefit," Moore states.
The mandate analysis found that Pap smears only increase insurance costs by less than 1%.
Public concern can also spur mandates
On the other side, some mandates are fueled by a such a widespread outcry among the public that insurers eventually embrace them.
Insurers in some states voluntarily changed their policies to eliminate the drive-through delivery trend because of public pressure, Moore says. "Ultimately, we hope you don’t have to resort to legislation," Moore explains. "We advocate that there be some coming together of the industry and medical community to work this out with consumers and insurers."
Some physician groups, especially obstetricians and gynecologists, benefit directly from mandates and have been driving forces toward passing some consumer-friendly laws such as giving women a choice of whether to see a primary care physician or an OB/GYN without requiring a referral.
Required payment for annual Pap smears and the 48-hour hospital stay for women giving birth were other popular measures.
Texas recently passed a mandate that gives women a choice of doctor, and some OB/GYNs already are seeing an increase in patients.
"Patients are starting to come into the office directly now, and they love it," says Ralph Anderson, MD, FACOG, FRCS(C), president of the Texas Association of Obstetricians and Gynecologists. Anderson works in the department of obstetrics and gynecology at John Peter Smith Hospital in Fort Worth. "Now a woman in Texas is allowed to have two physicians: One is a generalist, and the other is an OB/GYN, and that woman can choose which doctor she wants to attend," Anderson says.
But not all Texas OB/GYNs are convinced that the mandate will have the desired effect of making it easier for women to have access to their OB/GYN physician. "HMOs can make it too much of a hassle for women so they’ll continue to go to their primary care physician," says Brian Eades, MD, an OB/GYN with Women’s Healthcare Associates in Amarillo.
"What I had noticed is that typically in Texas a large percentage of women had used their OB/GYN doctor as their primary care doctor," Eades says. "We took care of colds, flu, gave immunizations, took care of high blood pressure, diabetes, and gave preventive care."
This changed when managed care companies entered the market, he says, because they required the women to go to their primary care physician for those services and restricted OB/GYNs to breast exams and Pap smears. The mandate will not change those limitations on the types of care OB/GYNs can provide, Eades adds.
Eades has taken the cynical view that insurers particularly want to stem the number of wellness visits by women during their reproductive years to save money. "They pay lip service to prevention, but they don’t want all these healthy people coming in and getting these visits every year because that costs a fortune," he says.
Matthews agrees that very little preventive care is cost-effective. "You can spend an awful lot of money on preventive care without finding someone who has the disease," he says.
The mandate report said the only preventive care that actually saved money are prenatal care, childhood immunizations, and tests in newborns for certain congenital disorders.
Still, it’s difficult for the medical community and legislators to favor cost over mandated care when they hear some of the poignant stories told of people who were denied needed health care because their insurance company did not cover it, the experts say. "While we clearly understand the logic of the cost argument, these are very emotional issues, and it’s very hard for a legislator or anyone to say We can’t pay for these sort of things,’" says Connie Barron, associate director of legislative affairs for the Texas Medical Association in Austin.
[Editor’s note: A copy of the Dallas-based National Center for Policy Analysis’ brief analysis about health insurance mandates may be obtained by calling Merrill Matthews Jr., PhD, at (972) 386-6272.]
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