AP: Required Benefits Could Make Health Insurance Unaffordable

With an increase in the number of state mandates over the last several years, a recent Associated Press article highlighted concerns that imposing additional required benefits will make health care coverage unaffordable for many consumers. The article focused on the impact of state mandates on the cost of coverage in Connecticut, a state that “ranks high on the list of states with large numbers of health care mandates on the books.” The article noted that a 2010 study by the University of Connecticut’s Center for Public Health and Health Policy found that the state’s “health insurance benefit mandates in effect on Jan. 1, 2009, accounted for roughly 22 percent of total premium for group coverage and 18 percent of total premium for individual coverage.”

The Connecticut Business and Industry Association noted that “Affordability is key to expanding access to health insurance in Connecticut, but health benefit mandates increase the cost of health insurance, making it even less affordable and accessible. Each new mandate passed by the legislature directly results in an increased premium rate to pay for the new service or procedure required by the state.’’

In addition, the health care reform law includes a broad expansion of required benefits, many of which are not included in the coverage many people currently choose to purchase. Many stakeholders expressed concern regarding the added cost of state mandates with the ACA’s new coverage requirements taking effect in 2014.  ‘‘’We have these very rich packages. That really is the only option. There really isn’t a lot of affordable options out there,’ said Jennifer Herz, an assistant counsel at CBIA.”

Other highlights:

  • “Kevin Counihan, CEO of Connecticut’s exchange, Access Health CT, acknowledges that the state has a lot of mandates. Although the definition of what is considered a mandate can differ, a 2012 report from the Blue Cross Blue Shield Association determined Connecticut has 27 state-mandated benefits plus an additional five for less-common conditions. The only state with more was Maryland, with 28 state-mandated benefits and eight more for rarer conditions.”
  • “But Counihan contends the ‘big driver’ is more the cost of providing health care in Connecticut, throughout the Northeast and in other select parts of the country. Connecticut, he said, already has the fourth-highest medical costs in the nation for a number of reasons, including demographics and higher reimbursements paid to hospitals and physicians by commercial insurers.”

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