Study Says Health Insurance to Rise 30%

NCPA: MANDATES INCREASE COST OF HEALTH INSURANCE BY 30%

08/13 1148

NEW ORLEANS, Aug. 13 /PRNewswire/ -- Mandates are increasing the cost of health insurance by as much as 30 percent, according to a National Center for Policy Analysis report released today at the annual meeting of the American Legislative Exchange Council. The analysis, prepared by the actuarial firm Milliman & Robertson, estimated the costs of 12 of the most common mandates and found that added together, those 12 mandates can increase the cost of a family health insurance policy by as much as $700 to $1,050 a year.

"Based on the Milliman & Robertson estimates, a small business that employs 25 people, with a standard mix of 40 percent single coverage and 60 percent family coverage, could see its premiums rise by $20,000 a year," said Dr. Merrill Matthews, NCPA Vice President for Domestic Policy.

The study analyzed the cost of health care policies when minimum stay maternity, speech therapy benefits, drug abuse treatment benefits, mammography screening, well child care, podiatry, pap smears, vision exams, chiropractic care, alcoholism treatment, infertility treatment and mental health care were included.

Assuming that a mandate-free, basic health insurance policy costs a family about $3,500 a year, the Milliman & Robertson study found:

Several of the mandates increase the cost of a policy by less than $35 each.

Infertility treatment can increase the cost of a policy from anywhere between $105 and $175 a year.

Mental health parity, which requires insurers to treat mental illnesses the same as physical illnesses, adds between $175 and $350 to the cost of a policy.

While employees tend to like health insurance mandates regardless of cost, Matthews believes that's because the costs are hidden, while the benefits are apparent.

"What people need to realize is that while mandates provide more options for those with health insurance, they also mean fewer people end up being insured," Matthews said. "A poll of employers who have canceled their employees' health insurance policies found it was because the price was no longer affordable."

Matthews predicts problems with mandates will only get worse. In 1965 there were only seven state-mandated health insurance benefits. Today there are nearly 1,000. In addition, the federal government recently joined the states by imposing two mandates of its own, a ban on "drive-through" baby deliveries and a requirement that any cap on mental health benefits be the same as the cap on physical health benefit.

"One or two federal mandates may not increase the cost of health insurance significantly, but, as the states have proven, it's almost impossible to stop with a few mandates," Matthews said. "When the dust settles, policies will cost more, employers and individuals will be canceling their polices and Congress will have to face an even bigger uninsured 'crisis.'" For a copy of the brief analysis "The Cost of Health Insurance Mandates" visit the NCPA Web site at http://www.ncpa.org or contact the NCPA.

The National Center for Policy Analysis is a public policy research institute founded in 1983 and internationally known for its studies on public policy issues. The NCPA is headquartered in Dallas, Texas, with an office in Washington, D.C. Internet: http://www.ncpa.org/

SOURCE National Center for Policy Analysis -0- 08/13/97 /CONTACT: Katy Meaker Menges, Dallas, 972-386-6272, or Joan Kirby, Washington, 202-628-6671, both of the National Center for Policy Analysis/ CO: National Center for Policy Analysis ST: Louisiana IN: HEA SU: