Health Insurance Rates Impacted by State Mandates
Recent studies have shown that state health insurance mandates such as guaranteed issue, community rating and specific benefit mandates have made rate variances between different states extreme, and in the process reduced competition.
The federal McCarran-Ferguson Act was enacted to allow states to set their own requirements as to what and whom health insurance companies must cover. As a result, some states cover such things as marriage counseling, acupuncture, and hairpieces. Some experts believe that about 25% of the uninsured market doesn’t purchase health insurance because of the needlessly high health insurance rates.
Another mandate that has driven up health insurance rates in some states is guaranteed issue (a mandate that requires health insurance companies to accept all who apply regardless of health condition) which when in combination with community rating (individuals don’t pay more due to their relative unhealthiness) forces the carriers to raise their rates for everybody to protect themselves against potential losses that result.
One proposed solution to the countries delicate health insurance market at the national level is the Health Care Choice Act (H.R. 4460)
The Health Care Choice Act would allow shoppers to buy individual health insurance online, over the telephone or through an agent or broker from any health plan in the country. Consumers could choose among policies from health insurers anywhere in the country. The health plans would be regulated by the insurer’s home state (i.e. if an Ohio resident purchased a policy from Blue Cross Blue Shield of North Carolina, they would be regulated by the health insurance laws in NC). If consumers have no need for benefits that are mandated in their state (like fertility treatments or hairpieces) they could purchase a health plan from a insurer in another state that does not require the health insurance company to offer them
Allowing consumers to select from a national pool of health plans, will give health insurance shoppers more opportunities to find affordable health insurance, and plans that better fit their needs.
