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private insurance needs reform as well

History of Mandates in Healthcare in Louisiana    (Baton Rouge Brief)

Federal Mandates in Health Insurance Mandates,    May 21, 2009

Examples of some of the mandates:

Pregnancy Discrimination Act of 1978 requires health plans to cover pregnancy like any other covered medical condition.

Newborns' and Mothers' Health Protection Act of 1996 requires minimum hospitalization benefits for mothers immediately following childbirth

Mental Health Parity Act of 1996 requires equal annual/lifetime benefits for mental health benefits as per other benefits, provided the plan covers mental health benefits

Women's Health and Cancer Rights Act of 1998 requires coverage of breast reconstruction if the plan covers mastectomy and the surgery is performed in connection with a mastectomy.

What is a state health insurance mandate?

A state health insurance mandate is a state law that compels insurers to either pay for or offer coverage for certain illnesses, provider types, or groups. State health insurance mandates usually take shape in coverage for illnesses such as alcoholism, Lyme disease, and autism; access to treatment from different types of health practitioners such as chiropractors, acupuncturists, and naturopaths; as well as additions to covered person definitions like adopted children, newborns, and handicapped dependents.

How prevalent are state health insurance mandates across the U.S. and in Louisiana?

The number of state health insurance mandates in the U.S. has steadily been on the rise since 1979. As of 2007, 1,594 mandate laws were on the books, which is a 533 percent increase from the 252 mandates that were in effect in 1979. The average per state is at nearly thirty-two mandates per state, up from five per state in 1979.

Who is affected by state health insurance mandates?

Health Insurance in Louisiana                    Percentage of population*

Covered by some type of insurance                             81.5%

Covered by private insurance                                      60.5%

Employment based                                                    53.8%

Own employment based                                              27.6%

Direct Purchase                                                          7.4%

Covered through government                                        30.6%

Medicaid                                                                     16.0%

Also by private insurance                                               2.3%

Medicare                                                                     14.7%

Also by private insurance                                                5.7%

Also by Medicaid                                                            2.3%

Military                                                                           3.1%

Uninsured                                                                      18.5%

*Percentages will not add up due to standard error and instances where individuals were counted in two categories

Many different parties can potentially be affected by the addition of state health insurance mandates. According to the U.S. Census Bureau, more than 60 percent of Louisiana residents are covered by private health insurance and are thereby directly affected by state health insurance mandates.  

For the business community, additional state health insurance mandates, and the subsequent costs associated with them, result in many small business owners having to choose between paying the higher cost of insurance and not offering coverage to their employees.

In January 2000, the Congressional Budget Office estimated that a mandate-induced cost increase of 1 percent would lower the probability of a small firm’s offering health insurance by 2 percent.   Many large firms choose to self-insure their employees, which circumvents state mandates, but requires the company have adequate financial resources available in order to cover any large claims. 

For the individual, studies have indicated that rising insurance costs as a result of state health insurance mandates can result in the loss of insurance or an inability to afford coverage. A 1988 study, for example, estimated that state health insurance mandates resulted in 14 to 25 percent of the uninsured population being completely unable to afford health insurance.

A more recent study found that a single additional state health insurance mandate would result in a 0.4 percent increase in the uninsured population.  Given that each state had an average of eleven state health insurance mandates at the time of the study, the study concluded that approximately 4 percent of the population was uninsured due to state health insurance mandates.

If we applied the findings of that study to Louisiana today, where we now have forty-three mandates, it implies that up to 17.2 percent of Louisianans, or roughly 759,000, could be priced out of health coverage due to state health insurance mandates.