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Thursday, December 17, 2009

Health Index 2009: Ranking the States

On December 16, the Small Business & Entrepreneurship Council (SBE Council) released its "Health Care Policy Cost Index 2009." The Index ranks the states and District of Columbia according to public policy measures that impact the cost of health coverage.

SBE Council chief economist Raymond J. Keating, author of the report, said: "As the debate at the federal level proceeds regarding health care reform, there are lessons to learn from the states. Namely, various states provide lessons in what not to do on the policy front. Elected officials usually like to tout that they have imposed new regulations and mandates on insurers in order to improve access and quality. Unfortunately, those regulations and mandates translate into higher insurance costs for small businesses, entrepreneurs and most everyone else."

Legislation moving through the Congress (House-passed H.R. 3962, and the Reid bill currently being debated in the Senate) includes intrusive regulatory measures like those adopted by states whose health coverage costs are more expensive. According to SBE Council's Keating, members of Congress should be very concerned about whether these expensive and intrusive health bills will drive up the cost of coverage as many private studies and the Congressional Budget Office (CBO) have found. The American public is also concerned about the prospect of higher costs as a new Washington Post-ABC News poll finds they are fearful that federal health legislation will drive their costs higher. According to survey results:

• 53 percent, "see higher costs for themselves if the proposed changes go into effect than if the current system remains intact."

• 55 percent say "the overall cost of the national health-care system would go up more sharply."

Keating continued: "Rather than looking at more regulations and mandates at the federal and/or state levels, policymakers should be looking for common sense ways to make the market more competitive so that consumers, including small businesses, have more affordable choices."

The "Health Care Policy Cost Index 2009" ties together seven measures, including tax treatment of health savings accounts, various forms of guaranteed issue regulation, various community rating regulations, number of insurance coverage mandates, and whether or not states have high-risk pools. (The "Health Care Policy Cost Index 2009" is a spin off of SBE Council's "Small Business Survival Index 2009.")

Among the 50 states and District of Columbia, the Top-10 states in terms of health care policies that lead to greater affordability of health coverage are: 1) South Carolina, 2t) Alaska, 2t) Nebraska, 4) Iowa, 5) Wyoming, 6) South Dakota, 7) Oklahoma, 8) Kansas, 9) Utah, and 10) Montana. Meanwhile, the Bottom-10 states are: 42) Connecticut, 43) Florida, 44) California, 45) Vermont, 46) Washington, 47) New York, 48) Rhode Island, 49) New Jersey, 50) Massachusetts and 51) Maine.

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