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Higher insurance premiums


Almost any economist could tell you that health insurance mandates increase the price of coverage for everybody. But by how much? Thanks to research recently published in the Forum for Health Economics & Policy, we now have an answer: a lot.

For example, community rating regulations require insurers to offer the same rate to every individual, regardless of age, gender, or health status, limiting premium differences across policies. The authors of the study, economists at Brigham Young University, the Brookings Institution, and the National Bureau of Economic Research, found that community rating raises premiums by 10 percent to 17 percent for individual policies and by 21 percent to 33 percent for family policies.

Guaranteed issue regulations, which require insurers to offer coverage regardless of a group's or individual's health status, usually accompany community rating regulations. One result is that in New Jersey, premiums are twice as high as those charged for similar individual and family policies offered across the Delaware River in Pennsylvania. The researchers also found that benefit mandates and regulations restricting the ability of insurers to exclude hospitals and doctors from their networks are associated with higher premiums.