Health Benefit Mandates Are Unnecessary

Published March 13, 2015

There are probably more myths about health care public policy than anyone outside the mathematics department at MIT can put a number to. I recently ran across one of the more uninformed myths, one that has led to a great deal of bad public policy.

I’m referring to the idea that without government mandating coverage of certain treatments and types of providers, health insurance companies wouldn’t offer coverage for vital health care services. I still remember a conversation I had with one otherwise very smart young man who said something along the lines of, “I’m just afraid without mandates, somebody’s going to buy a policy that doesn’t cover cancer.”

Similar thinking recently appeared in a letter to the editor where the writer claimed insurers would not cover diabetes if given the choice because it’s an expensive condition to treat.

History proves otherwise.

The modern health insurance industry in the United States has been around for at least 85 years, beginning with the founding of Blue Cross in 1929. Cancer has been around even longer. I have yet to learn of a single health insurer that has concluded cancer is just too expensive and hence doesn’t include treatment for the disease in its policies.

A 2009 report by the National Conference of State Legislatures (NCSL) helps prove this point. NCSL studied cancer mandates in all 50 states, finding a total of 25 specific mandate types concerning cancer.

For example, there are mandates requiring insurance coverage of breast, cervical, colorectal, ovarian, prostate, and testicular screening; hospice stays; off-label drug use; and even wigs.

Absent from the list, however, is a mandate that insurers actually cover cancer. Every cancer-related mandate on the books in 2009 was of the “add-on” variety, meaning lawmakers assumed coverage of cancer was already included in all policies sold despite there not being a mandate for it.

Consider chemotherapy, a common treatment for cancer. According to the NCSL report, in 2009 only seven states had mandates requiring insurers to cover chemotherapy treatments. Does anybody really believe chemotherapy was unavailable in 43 states in 2009, or that it was difficult to get insurers to cover it? Of course not.

The reason it never occurred to legislators to mandate insurers cover cancer is pretty obvious: There would not be much of a market for health insurance that doesn’t cover cancer. The proliferation of government mandates raises the cost of insurance without adding anything truly essential. The mandates are really more a matter of health care providers using government to force insurance companies to pay for their services regardless of whether patients would really prefer to have a share of the costs of those services added to their monthly insurance premiums.

Republicans trying to develop a replacement plan for Obamacare should keep this in mind and put together a plan that would allow health insurance free of all mandates to be sold to those who don’t care whether infertility treatment or chiropractic care are covered. Let mandate-free policies be sold alongside the mandate-heavy plans Obamacare requires, and then let the market decide.

And let’s stop worrying about someone buying a product that has never existed, such as health insurance that doesn’t cover cancer.