Socking It to the Insurance Co or to the Insured? Rhode Island Has the Highest Number of Health Insurance Mandates

To set the stage:

    • This Wall Street Journal summary map indicates that Rhode Island has the seventh highest per capita health-care spending.
    • In filings Monday, Blue Cross Blue Shield of RI requested an increase in health insurance premiums – an 18% increase for individuals (note that Blue Cross is the only company in the state that offers health insurance to individuals) and a 15% increase for small groups. It is not immediately clear how much of this is due to the implementation of ObamaCare.
    • Speaking of ObamaCare, the cost of state health insurance exchanges, the tool that was supposed to lower health insurance costs, has been rising, adding to indirect costs of health care.
    • A week ago, GoLocalProv reported that Rhode Island is among worst states for competitive healthcare.

Now we can perhaps identify a significant contributory factor for that last item and for the high (and rising) cost of health care in the state. Last week, the Council for Affordable Health Insurance (CAHI) released a report and ranking of “Health Insurance Mandates in the States, 2012.” Once again, Rhode Island finds itself on the top of a dubious list – in this case, most number of mandated health insurance benefits.

Compelling the nasty insurance companies (what few there are in Rhode Island) to cover the maximum number of benefits sounds like a good idea in theory. The reality is that such mandates translate directly into costs, which get passed on to the customer/rate payer. From the CAHI report:

One of the biggest cost drivers in our health care system is the steady proliferation of federal and state-based coverage mandates. When CAHI started tracking mandates in 1992, there were about 850 mandates across all 50 states,” explained CAHI Research and Policy Director, Victoria Craig Bunce. “Over the last twenty years the number of state mandated benefits has grown to 2,271. That’s an increase of 167 percent! Based on our annual analysis, mandated benefits currently increase the cost of basic health coverage from slightly less than 10 percent to more than 50 percent, depending on the state, specific legislative language, and type of health insurance policy.”

[Monique is Editor of the RI Taxpayer Times newsletter.]

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