How politics raises your health insurance premiums

Victor Joecks

One of the biggest drivers of health insurance costs and premiums is health insurance mandates. When a state legislature requires insurance companies to provide certain coverage, the cost of insurance increases and that cost increase is passed on to the consumer (or his or her employer).

And these mandates are a significant cost driver.

· A family purchasing a health insurance policy in Wisconsin would pay about $3,087, but that policy would cost $10,398 in New Jersey.
· A similar policy in Utah would cost $3,259, compared to $12,254 in New York.
· A family policy in Michigan would cost $4,118, but an astronomical $16,897 in Massachusetts.

Thus, the difference in premiums is largely the result of state mandates that inhibit the creation of a national market, not regional variations in health care costs.

So why do states pass these mandates that drive up the costs of insurance on all plans? Because, as Dr. Joe Heck found out in 2008, voting against health care mandates can open lawmakers up to misleading – but effective – political attacks.

Last year in Nevada, state Democrats spent tens of thousands of dollars on a series of tough – and misleading – mailers targeting Heck. The glossy pieces featured a number of images depicting suffering cancer patients, with the slogan: “Heck Blames Cancer on the Victim.”

They accused him of voting against requiring insurance companies to include cervical cancer screenings. The claim was false. Insurance companies have been required by the state to cover screenings since 1989. The ad seemed to refer to Titus-sponsored legislation from 2007, which required insurers to cover Gardasil, the vaccine for the human papilloma virus, a precursor to cervical cancer.

Heck did vote against that bill, arguing that he opposes new mandates on insurance companies because they increase the cost of coverage. Democrats found their fodder in comments he made at a committee meeting where he said he had “philosophical” objections to mandating coverage of the vaccine because there were preventable risk factors, including multiple sex partners, that sometimes lead to transmission of the disease and then cancer.

The damage was significant. Heck lost by less than 1 percentage point to Democrat Shirley Breeden, who operated under a media blackout for most of the race. The ads were the centerpiece of the campaign. (Emphasis added)

These types of political attacks make voting against health insurance mandates politically risky. And a result is that there are almost 2,000 individual state mandates across the country.

· About one-fourth of states require health insurance to cover acupuncture and marriage counseling.
· More than half of states require coverage for social workers and 60 percent mandate coverage for contraceptives.
· Seven states require coverage for hairpieces and nine for hearing aids.

In all, there are more than 1,900 state mandates across the United States. Some legislators contribute to this excess by giving in to special interest demands that insurers cover their specific services and providers. The result is higher premiums for consumers – pricing an estimated one-fourth of the uninsured out of the market.

And that’s how politics raises your health insurance premiums. And yes, the free market would provide superior personal and portable insurance, which would be a real solution to our health care problems.