Legislated health benefits cause loss of essential care

March 20, 2002|By Jay Hancock

APPARENTLY deciding Maryland needs more people without health insurance, the legislature forced medical plans last year to cover colon cancer tests and children's hearing aids, as well as slimming surgery for fat people.

This term, the General Assembly is thinking about compelling payment for meningitis vaccines and mental health "crisis" care at home, as well as expanding obligatory coverage of in-vitro fertilization and podiatry.

Other items added to the mandatory medical buffet in recent years include wigs for cancer patients, bone-density and prostate-cancer screening, contraceptives, alcoholism treatment and surgical breast reconstruction.

Maryland leads the nation in this kind of duress, which is well-intentioned but swells the legions of the uninsured as certainly as water flows downhill.

Imagine if the General Assembly allowed sales of only one kind of car: a buffed, loaded, eight-cylinder Cadillac, to use an analogy loved by the enemies of mandates. Fewer people could afford to drive.

By forcing insurers to offer only Cadillac health plans, the legislature makes medical care similarly pricey and out of reach.

About 800,000 Marylanders lack health care coverage, and the legislature at least pretends to care. So why does Annapolis keep making it harder for people to get insurance?

When it comes to heating bills and telephone tolls, the Assembly is fussily sensitive about consumer costs. So how come legislators willfully keep cranking up the price of medical coverage?

The requirement for prostate cancer screening accounts for $38 of the yearly cost of a typical policy that is subject to the Maryland rules, according to a study last year for state regulators by the consultant William M. Mercer Inc.

Contraceptives cost $10. Insurance payments for "morbid obesity" surgery amount to $26 a year of the typical policy's cost. In-vitro fertilization comes to $17, and mental health and drug- and alcohol-abuse treatments account for $265 per year, according to the Mercer study.

Maryland has about 40 legislatively mandated health insurance benefits, more than any other state. Pennsylvania and Delaware have fewer than 20. Add up Maryland's mandates and they comprise $814 of the cost of a typical non-HMO group plan, says the Mercer study.

That's 14 percent of the cost of an average policy, Mercer calculated, and it could be even higher. A few years ago, the General Accounting Office figured health insurance requirements accounted for up to 22 percent of Maryland's medical claims costs, and the menu of required coverage is even longer now.

However measured, these expensive decrees price people out of the market. Extrapolating from Congressional Budget Office research on the relationship between medical costs and the uninsured, we can figure that the elimination of medical mandates would add at least 12,000 - and probably a lot more - uncovered Marylanders to the insurance club.

You can imagine how the insurance commandments are handed down by Annapolis. Doctors, hospitals and other practitioners form the core constituencies. Patients supply compelling stories. Legislators figure a few more dollars paid by business, which finances most medical care and whose pockets are known to be bottomless, won't hurt anybody.

And so the mandates menu grows.

In the real world, the higher premiums generated by mandates cause many companies to stop offering health insurance altogether. Instead of being insured for cancer wigs and morbid obesity surgery, their workers aren't covered for anything. Is that an improvement?

The most perverse aspect of Maryland's mandate mania is this: Mandates drive up the cost of health insurance precisely for the companies that can least afford it. Large employers that are self-insured - those that bear their own risk for medical claims and could best afford the mandates - are exempt because they are regulated federally, not by the state.

The medium-sized and smaller companies are left to bear the mandate burden.

"The people who are damaged by this don't appear in the halls of the state legislature," says Robert Moffit, a Heritage Foundation analyst who testified last week in favor of a Maryland bill that would enable the sale of a few no-frills, no-mandate health insurance policies. Moffitcalls Annapolis' mandates mongering "a kind of raw training in special-interest group politics."

All of the Maryland-required procedures help people and sometimes save lives. But that doesn't mean they should be required by law. Are they cost-effective? Subject to abuse? It doesn't seem to matter.

Many mandates are luxuries in a state with 800,000 uninsured people. It is embarrassing to lose your hair to chemotherapy, but when you have cancer it's not your biggest problem. Deaf children should be helped, but it is not too much to expect the parents who love them and brought them into the world to scrimp and sacrifice for a hearing aid.

If workers demand certain medical coverage in sufficient numbers, then employers will offer them without being forced. If disease-screening tests save more than they cost by catching early illnesses, insurers will cover them voluntarily.

If not, maybe patients should pay. Let's worry first about covering everybody for appendicitis and broken legs. We can worry about in-vitro fertilization later.

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