Study Says Health Insurance to Rise 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

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

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 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:

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:

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