Policy Documents

The Political Roots of Health Insurance Benefit Mandates

Douglas Webber and James Bailey –
May 29, 2014

A large body of literature has attempted to evaluate the effect of mandates on health, health insurance, and the labor market. However, previous papers did not consider the political processes behind the passage of mandates. In fact, when they estimate the laws’ effect, almost all papers on the subject assume that mandates are passed at random. We use fixed effects estimation to determine why some states pass more mandates than others. We find that the political strength of health care providers is the strongest determinant of mandates. Our paper opens the way to estimating the causal effect of mandates on health insurance and the labor market using an instrumental variables strategy that incorporates political information about why mandates get passed.