Health Insurance Association of America (HIAA)

New HIAA Study: Nearly One Out Of Four Are Uninsured Due To State Mandates

Jan 25, 1999

FOR IMMEDIATE RELEASE

January 25, 1999

CONTACT: Richard Coorsh

(202) 824-1787

http://www.hiaa.org/news/mailto"rcoorsh@hiaa.org"

WASHINGTON, D.C. - Nearly one out of every four uninsured Americans have no health coverage because of the cost of state mandates, according to a new study released today by the Health Insurance Association of America (HIAA).

Additionally, the study finds that state mandates raise premiums by up to 13 percent for businesses that offer health insurance to their employees, that health care providers are the primary proponents of state mandated benefits legislation, and that the lion's share of the cost of these mandates is borne disproportionately by workers in small businesses.

"There's no free lunch, and there are no free mandates," observed HIAA President Chip Kahn. "This study offers clear, compelling evidence to state and federal legislators that mandates - no matter how well intended - drive up the cost of coverage and dramatically increase the number of uninsured.

"Based upon these percentages, more than 10 million Americans have no health insurance because of the high cost of mandated benefit requirements," he added.

HIAA's new study includes these additional findings:

There exist well over 1,000 coverage mandates throughout the U.S.

Between 1970 and 1996, there was at least a 25-fold increase in the number of state mandates on health plans.

Eighteen percent of small businesses without health coverage would buy it in the absence of state mandates.

In Virginia, mandates accounted for 21 percent of health insurance claims. In Maryland, they accounted for 11 to 22 percent of claims; in Massachusetts, 13 percent of claims; and 5 percent in Idaho and Iowa.

On average, if an employer does not offer certain services, a health plan's premiums would increase:

15 percent for mandated coverage for routine dental services
13 percent for mandated coverage for psychiatric hospital stays
12 percent for mandated coverage for visits to psychologists
9 percent for mandated coverage for chemical dependency treatment

According to the study's authors, Gail A. Jensen, Ph.D. of Wayne State University and Michael A. Morrisey, Ph.D. of the University of Alabama-Birmingham, "In general, proponents of mandates are special interest groups that stand to personally benefit from the laws." Professors Jensen and Morrisey also note that the labor market adjusts to the additional cost of mandates either with reduced wages to workers or with cuts in other, non-mandated benefits.

The Health Insurance Association of America (HIAA) is the nation's most influential advocate for private, market-based health care. Its 269 member companies provide health, long-term care, supplemental, and disability-income coverage to 115 million people - one out of two non-elderly Americans.

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PLEASE NOTE: This study is available by clicking http://membership.hiaa.org/pdfs/jensenrpt.pdf. You will need an Adobe Acrobat Reader to read this PDF file. If you do not have the Reader, you can download it by clicking on the icon.

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