Health insurance mandates

KM | July 31, 2008

Q: I am working on an article on insurance mandates. Would you mind answering a few questions? 1) What is the latest trend in mandated coverage? 2) Anything set my state's mandated coverage apart from the other states? 3) Anything you want to add?

A: Thanks for asking MedSave.com for comment on your article. You might have seen the short article at http://www.medsave.com/health%20insurance%20mandates/Health-insurance-mandates-in-Pennsylvania.htm. Please feel free to consider these additional comments:

The most recent trend in mandates is to avoid calling them "mandated coverage". Mandated coverage developed a bad public image as an increasing number of people become aware of the costs these were adding to everyone's health insurance. Estimates vary, but on average an Oklahoma resident can expect that $.15 of every dollar they spend on health insurance goes to benefit a relatively few people (aka a "special interest group") and do not benefit the vast majority of those who pay for health coverage. As overall health care costs continue rise to the point where the average person/employer cannot afford it, this became a heated issue. Most recent health insurance mandates apply to cover types of service providers rather than add specific named benefits. For example, a major medical insurance policy that provides "ordinary and necessary medical expenses" but not dental expenses would not normally pay benefits to a dentist. But if dentists are mandated by law as eligible medical care providers, then a medical procedure provided by a dentist could be a covered expense. A dentist who previously could not bill a major medical provider for any service might now be able to claim reimbursement for treating gum disease. Similarly, while massage therapy is not ordinarily considered a qualified medical expense, a massage therapist who treats a back injury may be eligible for reimbursement in states that mandate massage therapists as eligible medical treatment providers. The primary effect of this trend, in my opinion, is to simply expand the growth of "alternate medicine". Insurers know that alternate medicine is frequently less expensive than standard AMA procedures, and people like the feeling of choice in treatment. Medical care reimbursements are spread over a larger pool of providers, but might not have as direct and immediate effects in raising overall costs.

Finally, you might wish to consider the huge growth in health insurance that is exempt from most mandates. This coverage is referred to as "short term", "limited benefit" or "mini-med" coverage depending on the specific plan. Collectively these types of insurance account for virtually all net growth in health insurance policies. These policies are typically priced at about half the cost of traditional major medical policies. Short term major medical insurance is designed to be immediate issue and can not be renewed for up to three years. Limited benefit and mini-med policies define the specific procedures covered and limit the dollar amount of coverage to pre-defined limits. The policies tend to avoid large deductibles and co-payments that annoy policyholders. Of course, the flip side is that they provide far less coverage for catastrophic expenses. MedSave.com is one of the nation's leading providers of these low cost health insurance plans and much more information is available on our Web site. You may also wish to consider: http://www.medsave.com/articles/Covering-the-uninsured-2008-Update.htm (the section "Mandated Coverage is not Welcome")

http://www.medsave.com/articles/Review-of-Core-Health-Insurance.htm (A review of a popular low cost universal health insurance policy available limited benefit policy that is exempt from most mandates) http://www.medsave.com/healthinsurance/?p=20  (on health insurance mandates)

http://www.medsave.com/healthinsurance/?p=9  (on limited benefits insurance)

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