State Mandates Destroy Affordable Health Insurance
State requirements of manadated insurance benefits increases the price of health insurance and directly adds to the number of uninsured. This trend is particularly hard-felt in student health insurance plans.
(PRWEB) February 8, 2005
State laws known as “mandated benefits” continue to be a primary obstacle to affordable health insurance in many states. This month MedSave. com announced that the nation’s largest issuer of student health insurance discontinue selling policies in Montana because of the high cost of complying with state-mandated benefits laws. Many states have more than twenty of these mandated benefits, according to a 2003 report by the United States General Accounting Office.
Student health insurance is only viable if it costs significantly less than regular health insurance. Students generally have fewer health problems than older age groups, so student health plans are usually a trimmed-down type of policy priced at a fraction of the price of most other health insurance plans. A typical student health insurance costs under $100 per month, while an average health insurance plan for other adults costs about $400 per month. Adding the state-required mandates boosts the cost of regular health insurance by 7% to 17%, but almost doubles the cost of student health insurance, according to Tony Novak, principal of MedSave. com. At least one health insurance plan in Montana is exempt from state mandates under the law, but student health insurance is currently not exempt. The exit of this major insurance inevitably means that many Montana students will pay higher rates for their health insurance. Many other students will drop this coverage entirely. According to a recent article in the Wall Street Journal, each percentage increase in the price of insurance directly results in another 300,000 people opting to go without health insurance.
This most recent example in Montana is typical of a long-term trend working against firms like MedSave. com. MedSave. com is a national leader in online enrollment for low cost health insurance.
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