Shocking News! State Mandates Increase the Cost of Health Insurance!

Researchers at Brigham Young University, the National Bureau of Economic Research and the Brookings Institution have found that health insurance mandates raise the price for everybody. As the press release describing the study explains:

New research shows that the cost of health insurance for a typical family increases about $100 per month when state governments limit price adjustments based on factors like age, health or risky behaviors such as smoking.

The finding by Brigham Young University economist Mark Showalter is one of several examples of how one state's set of rules can result in widely different prices than what's found in the state next door. Perhaps the most eye-opening contrast exists in Trenton, New Jersey, where premiums cost about twice as much as those sold across the Delaware River in Pennsylvania...

Seven states prevent insurers from adjusting prices based on one or more factors like age, health status or risky behavior. The researchers found such rules - known as community ratings - increased family premiums between 21 and 33 percent.

The rule is intended to promote equity but may consequently make insurance too expensive for healthy people. The study found New Jersey's strict form of community ratings responsible for premiums set two to three times higher than if the requirement were not in place.

Who knew that 1,800 nearly 2,000 federal and state mandates would boost the price of health insurance? Well, actually, lots of analysts do. For example, Harvard business school professor Regina Herzlinger told reason

"It's like I'm shopping for a car and my state mandates that all cars have heated seats," says Herzlinger. Car buyers would not long stand for a heated car seat mandate that raises the price of a car by $1,000, and similarly individual health insurance shoppers would object to unnecessarily expensive insurance mandates.

It is very likely that legislators rarely consider the costs of such mandates to consumers, so the good news is that the study now quantifies them so that these trade-offs can be made explicitly. Whole press release for the study is available here.

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  • ||

    What silly world do you live in Ron? People don't buy health insurance. Health is a constitutional right provided by the government. Or it soon will be. Just as soon as the messiah is sworn into office.

    doom
    DoooM
    DOOOOM

  • ||

    It is very likely that legislators rarely consider the costs of such mandates to consumers

    Good one, Ron!

  • Lefiti||

    Oh God, we must resist this universal health care scam. We Americans are so much freer than Europeans and Canadians who are enslaved to state-controlled socialist doctors. They are forced to take preventative measures and don't have to pay through the nose for every procedure. The result? better health but far far less freedom. Preserve out right to go bankrupt just trying to stay alive!

  • ||

    Ron, having worked legislators on this issue, I can tell you with a high degree of confidence that they know that the mandates increase the cost of insurance, and they don't give a shit.

    The likelihood that this study will cause one legislator to vote against a mandate they would have otherwise voted for: zero.

  • ||

    The mandates should include: Minimum Deductible of $1000 per person, Minimum 20% co-insurance, minimum Rx co-pay of $25, 6 month waiting period for any major operation,etc.

    That would take care of it. It seems the mandates are just going in the wrong direction. perhaps the mandate should be that insurance is actually insurance rather than resembling some kind of prepaid service plan sold by network marketing companies.

    If you really want to control costs, make insurance illegal, dismantle the FED, allow competing currencies.

    Soon doctor visits will go down to an average of $25- which can be paid in silver pieces, fresh produce, blowjobs, or whatever.

  • ||

    Shocking News! State Mandates Increase the Cost of Health Insurance!

    Well, duh!

    Here's another headline, subsidize something and you get more of it.

  • Jay||

    But, Ron, government needs to step in because the MARKET is not working!

    That always cracks me up when I hear it from my lefty friends...

  • ||

    Profile in Courage: Conservative Republican Penna. state legislator's wife has baby. Doc says there may be a complication, I recommend we keep baby one extra night for observation.
    But health insurance won't cover extra night.
    Legislator, seeing he will have to pay out of pocket, rolls dice and takes wife and baby home. Complications; has to rush baby back to hospital. Later, legislator implores his colleagues to force insurers to mandate three nights in hospital after a birth instead of two. Legislation passes. Premiums go up as every women giving birth demands an extra day in hospital whether needed or not.

  • Lefiti||

    Don't submit to the gulag-like ensalvement of universal health care! Oh those French and Germans look sooo healthy, but the socialist doctors control their minds! Live free AND die!

  • Lefiti||

    Let us bow our heads in prayer for the sick and infirm but free among us:

    Hail Market,
    Full of grace,
    Prosperity is with thee.
    Blessed art thou among systems,
    and blessed is the fruit
    of thy womb, Capital.
    Holy Market,
    Mother of Goods,
    pray for us consumers now,
    and at the hour of our bankruptcy.
    Amen.

  • Lefiti||

    Don't let them take my medicaid fertitlity mandate away, I really need that benefit to get a seventh son of a seventh son and the 13th child all in one!

  • ||

    Profile in Courage: Conservative Republican Penna. state legislator's wife has baby. Doc says there may be a complication, I recommend we keep baby one extra night for observation.
    But health insurance won't cover extra night.
    Legislator, seeing he will have to pay out of pocket, rolls dice and takes wife and baby home. Complications; has to rush baby back to hospital. Later, legislator implores his colleagues to force insurers to mandate three nights in hospital after a birth instead of two. Legislation passes. Premiums go up as every women giving birth demands an extra day in hospital whether needed or not.



    He should have gotten a job at Buick. I hear they have excellent health insurance.

  • classwarrior||

    When talking about costs to consumers, it's important to stipulate which ones. It's the healthy one who don't claim, but those who do get sick benefit from these mandates. The root of the problem is paying for the multiple bureaucracies (public and private) that manage the US healthcare "system".

  • Lefiti||

    Quit posting as me, dickholes!

  • ||

    The root of the problem is paying for the multiple bureaucracies (public and private) that manage the US healthcare "system".

    The cost of payment processing and compliance is certainly enormous.

    I have no confidence whatsoever that federalizing the private side will result in a reduction of this cost.

  • SpongePaul||

    We need to end the mandates, and oppose any national healthcare. Been to an er latley, i have it is horrid. People are there who have NO BUISNESS being in an er, sniffles sprain cough etc. I had a dislocation and had to wait 1/2 hour to be called. ever sit for a half hour holding a limb that is dislocated siting amonst people with a cold or the flu. A federal healthcare system will make this WORSE! Hospitals will be swamped with idiots who have nothing wrong with them, because they can see a doc. leave a free market, and make er's for emergency ONLY! if you aint dying, go to the free clinic M-F 8-5 do not clog the ER for people who need it!!!!

  • Seward||

    This is a pretty good example of the monolithic nature of government solutions to problems. Markets lead generally to more diverse, individually tailored solutions.

  • ||

    Someone else is posting as Lefiti? Damn, I couldn't tell...

  • Lefiti||

    The Market rules! The state = enslavement

    Slogans save!

  • Lefiti||

    I just shat myself, and it feels really squishy and great! Donate now!

  • ||

    I smell Sterno and Milk Bones. Lefiti is here!

  • Lefiti||

    No, you quit posting as me!

  • Lefiti||

    The post at 1:20pm is not me. Dickholes.

  • daveylee||

    SpongePaul - All those sniffley, flu-ridden, non_ER worthy people you experienced at your local ER, were most likely there because they can't afford health insurance, or don't work for a company who offers it. In a universal HC scenario, those people WOULD be visiting their regular doctor or at worst, the urgent care clinic, and the ER's would be free to handle the cases like yours.

    Sorry to hear about the dislocation. I've had 3 of those and a fractured collarbone from when I played hockey. Not fun!!

  • Legion||

    "No, you quit posting as me!"

    Our name is legion, for we are maaaaany!

  • ||

    In a universal HC scenario, those people WOULD be visiting waiting for weeks or months to visit their regular doctor or at worst, best, going to the urgent care clinic on the off-chance that it isn't fully booked by 10:00 am, and the ER's would be absorbing the overflow pretty much like they are now rather than being free to handle the cases like yours.

  • Lefiti||

    Stop posting as me you cum-sucking, dickheads.

  • Lefiti||

    Rosie O'Donnell wears underwear with dickholes

  • Lefiti||

    I demand equality! Posting as Lefiti is my constitutional right.

  • Spartacus||

    I AM LEFITI!!!!

  • ||

    "Lefiti, there a dickhole in the bar. I need you to come fill it."

  • Seward||

    daveylee,

    In a universal HC scenario, those people WOULD be visiting their regular doctor or at worst, the urgent care clinic, and the ER's would be free to handle the cases like yours.

    Universal HC systems are very, very expensive, and they squeeze out those costs one way or another; either by paying doctors low salaries, or government deficit spending, or rationing care, etc.

    R.C. Dean,

    Some commentary I've been exposed to lately makes me wonder whether the insurance model is all that good of a way of paying for healthcare. At least as the primary means by which people pay for their general healthcare (leaving "catastrophic" problems out of the mix for the moment).

  • SpongePaul||

    Sorry to hear about the dislocation. I've had 3 of those and a fractured collarbone from when I played hockey. Not fun!!
    _____________________________________________
    Thanks mate, hockey injury as well, killed it when a linemate lost an edge in the corner. i jumped he put an arm up. clipped a skate and sent me head first towards ice. stuck out arm to brace, arm kept going, luckily another teamate was a nurse and i got carted straight to a trauma bay, no er wait. Last week it redislocated doing basically nothing and then i waited the half hour to be seen. 2 more hours later the xrays were taken and then i was repaired. surgery round the corner now ;-( oh well.
    My point was that the er's are so clogged when there are free clinics to go to! the er should be just for emergencys. Mandates and universal care will make them WORSE!! See Canada for examples!

  • Tacos mmm...||

    Some commentary I've been exposed to lately makes me wonder whether the insurance model is all that good of a way of paying for healthcare. At least as the primary means by which people pay for their general healthcare (leaving "catastrophic" problems out of the mix for the moment).


    The insurance system is a horrific fit for our current health care situation, as most medical problems are either self-limited (i.e., a cold) or chronic. An insurance system is good for acute or unexpected developments, lousy for predictable, chronic conditions like back pain, diabetes and high blood pressure.

  • ||

    Seward, tacos -

    I agree completely. Insurance should only pay for unpredictable costs that you can't afford, IOW, "catastrophic" insurance.

  • Tacos mmm...||

    I agree completely. Insurance should only pay for unpredictable costs that you can't afford, IOW, "catastrophic" insurance.


    The problem, then, becomes people who have chronic, uncontrolled conditions and don't get regular medical care. They end up waiting until, say, they have a catastrophic stroke or gangrenous leg before coming into the ER. At which point, you can't ignore them anymore and they put the medical system $60,000 into the hole.

    The point that many people arguing for government sponsored health care are trying to make is that it's actually cheaper to treat many chronic conditions for free, rather than wait for them to blow up.

  • robc||

    Tacos,

    it's actually cheaper to treat many chronic conditions for free, rather than wait for them to blow up.

    Im sure private insurance companies have actuaries to figure that out. In fact, I know they have, its why they will offer a discount if you get a physical once a year and things like that.

  • stuartl||

    The point that many people arguing for government sponsored health care are trying to make is that it's actually cheaper to treat many chronic conditions for free, rather than wait for them to blow up.

    So how about govt the helps the people with long term chronic problems and leaves the rest of us alone?

  • Tacos mmm...||

    So how about govt the helps the people with long term chronic problems and leaves the rest of us alone?


    That's a little over half of the adult population you're talking about there. If you're talking about senior citizens, it's more like 90%.

  • Reformed Republican||

    if you aint dying, go to the free clinic M-F 8-5 do not clog the ER for people who need it!!!!

    I had a dislocation

    So you were dying from the dislocation?

  • stuartl||

    That's a little over half of the adult population you're talking about there. If you're talking about senior citizens, it's more like 90%.

    Are you saying that half the population has long term chronic problems that require treatment they cannot afford?

  • Sam Grove||

    No, no, no, universal health care is a way to deal with an aging population.
    When citizens are no longer productive, just start rationing their access to medical care, if the get too expensive, let the bureaucrats deny them further care.

    Damn, I'm getting old!

  • ||

    The reason health care costs are skyrocketing is because of universal health care for senior citizens. That's what happens when you provide unlimited money (the US treasury) to spend on something for which there is unlimited demand (not dying) to people who have no incentives not to spend it.

    If you think health care is expensive now, just wait until the government guarentees everyone the maximum life-saving treatment with no cost constraints. (Cause who wants to pull the plug on anyone else?)

    Either that or they'll be forced to start rationing, which is pretty much what happens everywhere else. Which is why health care stink in the UK and Canada.

    Canada actually had to BAN people from buying private health insurance to go to US hospitals. They have doctors and nurses strikes every other year. The National Health Service in the UK is a disgrace.

  • Naga Sadow as . . . Lefiti!||

    Well, well, Libertards! It looks like the Messiah is gonna take office soon! Then FDR come again will show you all how a country should be run!

  • ||

    100% of the population is guarenteed to develop a long term chronic problem called "old age".

    IMO, the fairest thing would be to start an organ redistribution program. Take the good kidneys from those undeserving rich fucks and redistribute them to poor people that need them.

  • SpongePaul||

    So you were dying from the dislocation?
    _____________________________________________
    no, but an arm locked in a heil hitler postion needs to be replaced into socket before the pain makes one pass out or the limb needs to be cut off for lack of adequate circulation

  • Gilbert Martin||

    "100% of the population is guarenteed to develop a long term chronic problem called "old age".

    Not exactly.

    Some won't make that far.

    They'll get shot or stabbed to death or killed in car wrecks, etc., etc.

  • Tacos mmm...||

    Are you saying that half the population has long term chronic problems that require treatment they cannot afford?


    No, see stuartl at 2:26.

    Canada actually had to BAN people from buying private health insurance to go to US hospitals. They have doctors and nurses strikes every other year. The National Health Service in the UK is a disgrace.


    True, but the healthcare systems in France, Germany and Switzerland are not. If you're going to talk about socialized medicine, you need to at least acknowledge that there are numerous systems, and that some of them work quite well.

  • ||

    Any time I see comments about the Canadian health care system on here it makes me laugh. The only difference between the Canadian and U.S. system from a users' perspective is who pays for it. If you go to a Canadian hospital with a real emergency, you get in right away and get high quality treatment. If you go with a cold, you sit there.
    The biggest difference between the two countries when it comes to health care is Canadians are the biggest bitchers and moaners in the world. They complain about everything, all the time. It's the real national sport, not hockey.
    I know, I'm a Canadian

  • ||

    It is very likely that legislators rarely consider the costs of such mandates to consumers,

    Having been in on some legislative sessions in Hawaii where such proposals for mandates were passed, I can assure you some legislators (usually with an R after their name) always consider those costs, some (usually with a D after their name) never do, and the swing votes come down to those who weigh those costs against the votes to be picked up by pandering to special interests pressing for their "little" mandate For Teh Childrunz.

  • ||

    I mean, there's always staff on both sides of the aisle whose job it is to price these things out, but the legislators don't always read the reports that the staff diligently crank out.

  • ||

    Mandate all they want.. you can always decide to earn just enough income to keep you OUT of the requirement range.

    I full well intend upon doing just that, and dragging my husband off the money-wheel as well, if it comes down to this.

    The Dirtiest Secret in America is that 'middle-class' (actually, it's a debtor-class now..) life *styles* are a necessity.

    Besides, if I enter into an insurance pool, I don't want any others in it to be smokers or obese.

    Diabetes, hypertension and the 'lifestyle' diseases add how much to the burden of cost for healthcare?

    If you can't quit that nicotine jones, and put better food into your cake-hole, why should I fund your healthcare?

    It's not like I need to see an MD, and it's not like I actually enjoy things like tofu and exercising - but it's what I do to not require an MD's services.

    If I can do this, so can anyone. No excuses.

    Deb.

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