NFIB advocates free-market reforms that allow small-business owners to decide which benefits they can and cannot afford to offer.
-
The issue of state mandates is not just about the sheer number of mandates that exist, but the fact that the mandates are designed, funded and administered differently by state.
-
A health-insurance "mandate" is a legislative requirement that an insurance company or health plan cover specific health care providers, benefits or patient populations. For almost every health-care product or service, there is someone who wants insurance to cover it so that those who use the products and services don't have to pay out of pocket for them but will get them as a covered benefit through their insurance policy.
-
While mandates make health insurance more comprehensive, they also make it more expensive. Mandates require insurers to pay for care consumers may have previously funded out of their own pockets, thereby raising the price of premium to cover the increased claims the insurer anticipates to take place as a result of the mandate.
-
In some markets, mandated benefits increase the cost of health insurance by as much as 45 percent. Mandating benefits is like requiring auto insurance to not only cover collisions and auto damage but to also pay for new tires, engine tune ups and oil changes. Imagine what an auto insurance policy would cost if that were the case!
-
H.R. 1402, the "Senator Paul Wellstone Mental Health Equitable Treatment Act of 2005," would provide for equal coverage of mental-health benefits with respect to health-insurance coverage, which would hurt small businesses.
-
According to a study conducted by the Association of Health Insurance Plans, as many as one in four individuals who are without coverage are uninsured because of the cost of state health-insurance mandates.
-
Elected representatives find it difficult to oppose any legislation that promises enhanced care, especially when lobbied by persons who have been personally affected by the issue in question. What most elected officials do not understand is that only citizens covered under state fully insured plans will pay for the state mandate. In most cases, large, self-insured companies only have to comply with federal mandates and are pre-empted from state mandate compliance. Even if they voluntarily offer the covered mandate as a plan benefit, they determine how that coverage is defined and funded. Mandates virtually always cost money rather than save it.
-
Some mandates have a much greater impact on the cost of health insurance than others. For example, state legislation requiring that in vitro fertilization drugs be covered under insurance will have far less impact on premiums than a state mandate requiring full in vitro fertilization coverage and unlimited physician visits.
-
States have other ways of adversely affecting the cost of health insurance by mandating health insurers to accept anyone who applies, regardless of their health status, known as "guaranteed issue." Or they limit insurers' ability to price a policy to accurately reflect the risk an applicant brings to the pool, by mandating "community rating" or "modified community rating." Both guaranteed issue and community rating can have a devastating impact on the price of health insurance, especially as younger and healthier people cancel their coverage. Mandates, regardless of the form they take or how well intentioned, drive up the cost of health insurance, especially in the small 2-50 employee market.
