The Heritage Foundation has an excellent write up illustrating how Government intervention in health care increases costs. The note that “the Council for Affordable Health Insurance (CAHI) released its annual report on health insurance mandates in the states. They report that mandated benefits—i.e., medical procedures that states require insurance providers to cover—across the 50 states are on the rise, jumping from 2,133 in 2009 to 2,156 in 2010.”
They go on to state that’s “just part of the story”.
The report also shows that mandated benefits increase the cost of health insurance and by how much. This should come as no surprise. Requiring insurers to offer a higher value product comes at a higher expense.
Lawmakers across the 50 states have determined that benefits such as the following are necessary to include in essential health coverage: in vitro fertilization (15 states), oriental medicine (three states), services provided by acupuncturists (12 states), athletic trainers (three states), and massage therapists (two states). While CAHI does not pass judgment on the necessity of any of the mandates, it is clear that not all patients need these kinds of benefits, much less want to pay for them.
Requiring insurers to offer more benefits at a higher price removes more affordable options from the market that, in many cases, better suit the needs of enrollees. According to CAHI, “Mandating benefits is like saying to someone in the market for a new car, if you can’t afford a Cadillac loaded with options, you have to walk.”
The article points out that “mandates aren’t the only way government can get in the way of reducing health care costs:”
States have other ways of adversely affecting the cost of health insurance. For example, several states have adopted legislation that requires health insurers selling in the individual market to accept anyone who applies, regardless of their health status, known as “guaranteed issue.” Or they limit insurers’ ability to price a policy to accurately reflect the risk an applicant brings to the pool, known as “community rating” or “modified community rating.”
The Patient Protection and Affordable Care Act overhauls the health care system through many of these same policies, in addition to mandating benefits. It is thus no wonder that the new law is already increasing the cost of insurance, as numerous employers have reported. The law will require all Americans to carry a certain level of comprehensive coverage or pay a penalty. This will eliminate the choice of more affordable options nationwide, and, as John Goodman, president of the National Center for Policy Analysis explains, result in job loss or loss of employer-sponsored coverage as the minimum benefits package becomes more unaffordable.
Read the entire article here.