by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
Doing away with many of Obamacare’s expensive regulations imposed on patients, providers, and insurers ultimately falls on Congress to decide. State lawmakers can only do so much to slow the rise in health insurance costs. One thing they can do, however, is to re-examine the number of state health coverage mandates licensed insurance carriers must cover.
North Carolina currently imposes over 55 coverage mandates — ranking in the top 15 states nationwide. According to the Council for Affordable Health Insurance, it is estimated that each additional mandate increases premiums by an average of less than one percent.
At first glance, no biggie. Collectively, it adds up. The fact that there are now over 2,200 mandates nationwide – up from almost zero in 1970 – demonstrates that it’s generally politically feasible for special interest groups to have it their way at the expense of others.
But businesses that self-insure (approximately 60 percent of North Carolina private firms) are off the hook by the blessing of the 1974 Employee Retirement Income Security Act (ERISA). Unfortunately, the self-insured exemption from absorbing the costs of state benefit mandates puts an extra onus on the 1.5 million policyholders who either have an individual market plan or who partake in a fully purchased employer plan.
During North Carolina’s 2014-15 legislative session, a number of bills have been filed calling for insurers to expand coverage for benefits such as oral cancer drugs and autism therapy, and reduce co-pays for chiropractic care. The Citizen Times reports that the introduced bills could amount to an additional 16 percent rate increase if passed – excluding a potential 25 percent average premium increase Blue Cross and Blue Shield seeks for 2016 individual policy plans:
Rep. Gary Pendleton, R-Wake, an independent insurance agent handling employer health plans, stressed in an interview his sympathy for people with health needs seeking help. But he estimated that approving five pieces of pending legislation he considers mandates would increase insurance premiums by about 16 percent.
“It’ll be a rate increase on everybody insured whether they use that benefit or not,” Pendleton said, adding that even with the GOP protests about President Barack Obama’s health care law, “my fellow Republicans are not serious about reducing health care costs for corporations and nonprofits.”