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Mandates and Consequences

Wednesday, May 21, 2014 13:27
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Years ago, there was a cute advertising campaign with the slogan “It’s in there!” The message referred to “homemade taste,” and implied various wholesome ingredients.

Unfortunately, a concept that works for marinara doesn’t translate well to health insurance, a lesson that seems to have eluded Tar Heel State legislators.

FoIB Jeff M tips us to this development:

North Carolina insurance policy holders will pick up $10.5 million in additional premium costs if a bill requiring expanded coverage of chiropractic services … is approved in the General Assembly’s short session opening this week.”

We’ve long noted that mandated benefits drive up the cost of policies, often in ways that aren’t immediately obvious. For example, this new chiropractic benefit will increase demand, benefiting chiropractors. But it’s also a signal to other providers that they, too, should be clamoring to get on board the gravy train:

Critics of the health mandate to lower patients’ co-pays for chiropractic services … say Senate Bill 561 would entice other specialists, such as physical and occupational therapists, to seek similar payment parity. That would shift more costs from individual patients to all insurance consumers

No kidding.

Now, one could argue that insurance is, after all, about “spreading the risk.” And that’s true, up to a point. The problem is that not everyone shares the same kinds of risks, and these mandates fail to take into account the disparate impact they’ll have on other consumers while inflating premiums ever higher.

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