Legislative mandates increase cost of insurance
Many employers and their employees are finding it more difficult each year to pay the ever-increasing cost for health insurance. One of the culprits forcing the insurance premiums upward is the constant strategy of our Legislature to mandate that any policy written must cover certain conditions, services and procedures. The providers of these services and products are often the impetus for the legislation. Each mandate that passes adds to the overall cost of policies. No single mandate causes premiums to soar but, collectively, they add significantly to the cost of health insurance. As costs go up, premiums increase. Higher costs force those who are insured into higher deductibles, greater co-pays, and less coverage. The irony of health insurance mandates is that they reduce the basic coverage of those who are insured in order to provide specialty coverage for others.
In 2003, then-Rep. Dan Morrish passed a bill that established a moratorium on any new health insurance mandates. The legislation was an acknowledgement that the Legislature had gone too far in the mandate arena.
Unfortunately, this legislation was totally ignored by the Legislature that passed it. Louisiana now has 24 mandates on the books, each creating an additional expense to healthcare policies in Louisiana.
Members of our ďnewĒ Legislature have already introduced 11 bills that would mandate new additions to policies. These mandates run the gamut from fertility treatments to marriage counseling. Some enlarge mandates already on the books, and others create new ones. Each of the mandates would allow vendors of products or providers of services to bill insurance companies directly for the cost of providing the product or treatment. That cost is then passed on to policyholders.
The National Federation of Independent Business estimates that, for every 1 percent increase in health insurance costs, 20,000 employees lose coverage. Unfortunately, those individuals who will later lose all or part of their health insurance arenít in the legislative committees when the mandate bills are heard. They havenít been affected yet, so they donít know what is about to happen to them. Legislators hear from those who want the specialty coverage but not from those who may lose access to even primary care due to escalating premiums. Absent hearing from the concerned voices of those who will be affected later, politicians often opt to make those appearing before them happy and pass out the mandates.
If our Legislature were interested in addressing the major problem of a growing number of our citizens going without health insurance, it would act a lot differently. Instead of passing more mandates each year, it would remove some on the books and adopt laws that would allow companies to provide mandate-free policies for their employees. If companies canít afford to provide health insurance coverage todayóa major problem in dealing with healthcare in Louisianaóadding more mandates to the mix will only make the matter worse.
The past action of our Legislature regarding mandates has been counterintuitive. It remains to be seen whether the new kids on the block will put sound policy above politics and stop the mandate train from rolling any farther.
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