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Abstract
Every US state requires private health insurers to cover certain conditions, treatments, and providers. These benefit mandates were rare as recently as the 1960s, but the average state now has more than forty. These mandates are intended to promote the affordability of necessary health care. This study aims to determine the extent to which benefit mandates succeed at this goal. Using fixed effects and difference-in-difference research designs with data from the restricted Medical Expenditure Panel Survey—Household Component (MEPS-HC), it provides the first empirical estimates of how health insurance benefit mandates affect out-of-pocket costs and total spending on health care. Both strategies find that mandates significantly reduce out-of-pocket spending, but they are divided on whether mandates also reduce overall health care spending and spending by private insurers.
Highlights
Much of US health care policy is focused on expanding access to health care, and on making health insurance and health care more affordable
US states mandate that private health insurance plans cover certain conditions, treatments, and providers
Since the 1960s, the average state has gone from mandating fewer than one specific health insurance benefit to more than 40 today (Laudicina et al 2013), a trend recently strengthened by the Affordable Care Act’s (ACA) Essential Health Benefits provision
Summary
Much of US health care policy is focused on expanding access to health care, and on making health insurance and health care more affordable To this end, US states mandate that private health insurance plans cover certain conditions, treatments, and providers. If a state mandates that health insurance plans must cover a new treatment, such as autism therapy, it would seem to follow that the therapy should become more accessible and more affordable. This is certainly a major goal of state legislatures when they pass such mandates (Bellows et al 2006). This article is the first to test the hypotheses that health insurance benefit mandates reduce out-of-pocket health care spending by households, increase spending by private insurers, and increase overal health care spending
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