Mandated Health Insurance Benefits

At Issue

In recent years, the number of mandated benefit laws, or laws that place requirements on the content of private health benefit plan contracts, have increased significantly. Most of these laws have been enacted at the state-level of government, although the federal government has also placed mandated benefit requirements on health plans. Mandate laws range from statutes that require health plans to cover services by particular types of providers (e.g., chiropractors, optometrists), requirements to cover specific diagnostic or treatment services (e.g., mammography, inpatient hospital care following delivery) or laws to extend benefits to certain populations (e.g., continuation coverage of employees or dependents). While individual mandates are often very popular since they are intended to provide specific populations with greater access to particular services, there is a cumulative price tag associated with ensuring such access. The sheer volume of mandated benefit laws being passed in the states has caused health insurance premiums to rise substantially. As a result, reducing the number mandated benefit laws or examining the cost-impact of mandates is being discussed in many jurisdictions.

NAHU's Position

NAHU is very concerned about the growing number of mandated benefit laws that have been enacted at both the federal and state levels of government. Our position statement outlines our concerns about mandated benefits in great detail, but really these concerns can be boiled down into one simple point. Research shows are that there are now over 1000 benefit mandates in existence, and various studies indicate that they have caused health insurance premiums to increase as much as 25 percent. We feel that the more mandates that are imposed, the more people for whom health insurance becomes unaffordable and the greater the number of uninsured.

While NAHU does not support mandated benefit laws, many groups do. For example, various interest groups have conducted very successful legislative campaigns in many states to ensure that health plans provide coverage for items like mammography, contraceptives or hearing screening in newborns. These interest groups argue that their particular mandate proposal is crucial to ensure that a vulnerable population is guaranteed access to services that would benefit overall public health. The problem is that these organizations almost never consider the aggregate cost of all mandated benefit laws, or how such costs have contributed to the growing problem of the uninsured.

Many employer and insurer groups would rather limit the number of mandated benefit laws passed at both the state and federal-levels or require cost-impact assessments before mandated benefit laws can be enacted. They also would like to amend the language of mandated benefit laws, so that carriers are not required to provide coverage for specific services, but are instead obligated to make such coverage available to consumers if they elect to pay a higher premium. These types of reforms would help keep the cost of providing health coverage low, while also guaranteeing consumers the opportunity to select the type of coverage that best suits their specific needs.

NAHU's Action

NAHU members all over the country have worked hard to oppose mandated benefit laws in their particular states. On a national level, NAHU has worked to curtail costly federal mandated benefit initiatives, such as working through coalitions to prevent expansion of the 1996 Domenici-Wellstone Mental Health Parity Act. In addition, NAHU has submitted comments to national organizations of state policymakers voicing our concerns about the overall role mandated benefit laws have played in raising the number of uninsured.

During 2001, NAHU submitted written testimony written testimony to the National Conference of Insurance Legislators concerning their proposed model legislation mandating that insurance carriers provide enrollees with equal coverage for the diagnosis and treatment of mental health and substance abuse conditions as is provided for the diagnosis and treatment for all other physical illnesses.

Additional Resources

AHIP's issue brief on mandates

NCPA: Avoiding Costly Mandated Benefits

Health Insurance Mandates in the States 2004
The Council for Affordable Health Insurance (CAHI) has released a report showing that the various states collectively impose more than 1,800 health insurance mandates.... While the mandates are politically popular, CAHI urged state legislators and Congress to undertake a cost-benefit analysis before adding new mandates.

In a sweeping report on the U.S. health care market, antitrust officials with the Justice Department and Federal Trade Commission said imposing too many rules and regulations could hobble competition and ultimately be bad for consumers. (July 2004)

The Equal Employment Opportunity Commission (EEOC) on April 23, 2004 overturned the Third Circuit Court of Appeals interpretation of the Age Discrimination in Employment Act (ADEA) in a 3-1 decision in the case of Erie County Retirees Association v. County of Erie. This decision will allow employers to provide greater benefits to those 55-64 than to those over 65 for whom employers traditionally provide wrap-around coverage.

EEOC Approves Proposal to Exempt Retiree Health Plans from Age Discrimination in Employment Act - EEOC Press Release - April 22,2004

Age Discrimination in Employment Act; Retiree Health Benefits - Proposed EEOC Final Rule

A Message To America's Retirees - EEOC Open Letter to Retirees - April 23, 2004

Issue Brief on Mandated Benefits from the CA Policy Roundtable/Kaiser Family Foundation

Mandates Drive Up Health Insurance Costs

An Easy Way to Make Health Insurance More Expensive

State Mandated Health Insurance Benefits

Content copyright © 1998-2009 National Association of Health Underwriters. All rights reserved.
National Association of Health Underwriters · 2000 North 14th Street, Suite 450 · Arlington, VA 22201
703.276.0220 · fax 703.841.7797 · info@nahu.org