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Monday, January 04, 2010

Small Biz Health Care Daily: Regulations, Mandates and Costs at the Federal Level and in the States

Leaders in Congress and the Obama White House apparently choose to ignore the economic realities of mandates and regulations when it comes to health care.

The reality of the situation, however, is driven home by SBE Council’s “Health Care Policy Cost Index,” which ranks the states according to public policies that affect the cost of health care and health insurance.

As noted in the report:

“Other major negative factors in the health care equation are government mandates and regulations. For example, elected officials take credit for mandating that insurance companies provide certain kinds of coverage, but each mandate and regulation comes with costs. For example, the Council for Affordable Health Insurance reported in ‘Health Insurance Mandates in the States 2009’ that ‘mandated benefits currently increase the cost of basic health coverage from a little less than 20% to perhaps 50%, depending on the number of mandates, the benefit design and the cost of the initial premium.’ Indeed, no matter how nice it might sound to some, government intervention in markets – including regulations and mandates – comes with costs.”

The report arrives at quite a different conclusion than what is being touted in our nation’s capital:

“Whether at the federal level or in the states, public policies impact health care costs. If policymakers are serious about having a positive impact on health care, then rolling back costly, unnecessary mandates and regulations, and implementing measures that remove obstacles to real, private sector choice and competition, are the reforms needed.”

Check out the “Health Care Policy Cost Index” and where you’re state ranks here.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council

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