Lessons Learned From the States:
Health Care Mandates Mean More Uninsured Americans

Multiple studies show mandates mean increased costs and decreased coverage

As Congress debates health care mandates at the federal level, it would do well to study the negative impact mandates at the state level have had on the growing number of uninsured. During the past decade, the number of Americans without health insurance has grown to 43.1 million—a 35.5 percent increase. A key factor in this increase has been the more than 1,000 coverage mandates that have been passed by the states. While many of the studies cited below focused on state benefit mandates, it is clear that the added costs of mandates- in whatever form- are a key factor in the increase of the uninsured.

State Mandates Cost 1 in 4 Americans Their Health Insurance

  • One-fifth to one-quarter of the uninsured have no health insurance because of the high cost of mandated benefit requirements. That equals more than 10 million Americans.
  • State mandates raise premiums by up to 13 percent for businesses that offer health insurance to their employees.
  • 18 percent of small businesses without health coverage would buy it in the absence of state mandates.

Mandated Benefit Laws & Employer-Sponsored Health Insurance, Gail A. Jensen, Ph.D and Michael A. Morrisey, Ph.D, Jan.1999 for the Health Insurance Association of America

States With More Mandates Have More Uninsured

  • Between 1990 and 1994, 16 states passed aggressive laws designed to increase access to health insurance for uninsured citizens. In fact, these mandates had the opposite impact.
  • In 1996, all 16 states experienced an annual uninsured growth rate of 8.1 percent – almost eight times the 1.02 percent growth rate of the remaining 34 states and much higher than the 2.70 percent annual increase for the entire nation.
  • The 16 states also had decreases in the percentage of the population covered by employment-based insurance from 66.6 percent to 65.8 percent between 1990 and 1996 while the 34 remaining states had a 1.3 percentage point increase.

Uninsured Rates Rise Dramatically in States with Strictest Health Insurance Regulations, Melinda L. Schriver and Grace-Marie Arnett of The Galen Institute; published by the Heritage Foundation, Aug.1998

Specific State Mandates Increase Chances of Being Uninsured

  • State mandates requiring mental health service coverage increase the probability of being uninsured by almost 6 percent.

Health Insurance Coverage and the Uninsured, William S. Custer, Ph.D., Center for Risk Management and Insurance Research, Georgia State University

  • Benefit mandates for drug and alcohol treatment decrease overall coverage. "While most firms may not drop coverage because such a mandate is enacted, the mandate may contribute to higher premiums over time, and these higher premiums lead some people to drop their employer-sponsored or individual coverage."

Variations in the Uninsured: State and County Level Analysis, The Urban Institute, June 1, 1998