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This seemingly irrational proliferation of benefit mandates is driven by special interest groups. State legislators are under constant pressure from lobbyists representing dentists, chiropractors, acupuncturists, and a myriad of other health care providers. The sponsors of benefit mandates know that elected officials would rather go along with some obscure piece of legislation than oppose a politically savvy and well-funded interest group.
And the politicians usually confirm this cynicism. A typical example can be found in none other than Barack Obama. When Obama was a state senator in Illinois, he never met a benefit mandate he didn’t like. As Scott Gottlieb recently pointed in the Wall Street Journal, “during Mr. Obama’s tenure in the state Senate, 18 different laws came up for a vote and passed that imposed new mandates on private health insurance. Mr. Obama voted for all of them.”
THERE ARE, HOWEVER, a few politicians willing to ignore special interest pressure. Among them is Gov. Charlie Crist of Florida, who has pushed through legislation that will allow mandate-free policies to be sold in his state. And, on the national level, Nebraska congressman Jeff Fortenberry has introduced “America’s Affordable Health Care Act” (AAHCA), which would permit insurance companies to offer limited-mandate health plans anywhere in the country.
The Fortenberry legislation is particularly promising because it capitalizes on the successes states like Arkansas, North Dakota, Utah, and others have had with mandate-free health coverage. AAHCA permits insurance carriers to offer up to three limited-mandate health benefit plans specifically designed for individuals and families without coverage through an employer or some government program. The monthly premiums for these limited-mandate plans would be well below the cost of their mandate-heavy counterparts.
AAHCA augments its mandate solution with several well-thought-out provisions designed to protect high risk patients from slipping through the cracks of the individual health coverage market. Some health care analysts fear that patients with pre-existing and chronic conditions such as diabetes would be unable to find coverage in a less regulated insurance environment. The Fortenberry bill addresses this issue by expanding high risk pools.
A high risk pool is a non-profit association, typically created by a state legislature, that provides a safety net for medically uninsurable patients. They are usually funded by the actual members, so they tend not to be a heavy burden on the taxpayers. More than thirty states have created such pools, but their funding, structure, and effectiveness varies wildly from program to program. AAHCA encourages the proliferation and systemization of state high risk pools by providing for increased funding and the development of best practice protocols.
THE FORTENBERRY LEGISLATION is not, of course, a panacea. The problems facing U.S. health care are far too numerous and complex to be solved in one fell swoop. Nonetheless, like Charlie Crist’s “Cover Florida” plan, it is a serious attempt to address the inflationary pressure caused by state-imposed benefit mandates. And, using the most conservative estimates offered by Bunce and Weiske, the legislation could decrease the cost of basic health coverage by 20%. In a national insurance market, this is not small change.
More importantly, AAHCA has the potential to make a sizeable dent in uninsured problem by eliminating the necessity, currently faced by many patients, of choosing between the insurance equivalent of the GalactoMaximus and no health coverage at all.
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