Health Insurance Mandates

Published June 13, 2008

One of the major causes of high-priced health insurance in the U.S. is the high number of mandatory minimum coverages required by some state governments. A new law in Florida will allow insurers in that state to offer minimum-coverage health policies that are exempt from most of the state’s mandatory coverages.

Florida is currently 13th in the country with 48 minimum individual coverage mandates (, including dental anesthesia, hair prosthesis, orthotics, and “second surgical opinion.” Minnesota currently holds the lead with 64 required coverages.

While each of these (as well as the other 44 mandatory coverages Florida law requires) can be beneficial to some consumers of health coverage, every one of these is a required coverage on every single health insurance policy sold in the state of Florida, regardless of desire or potential need. Because they are prohibited by law from purchasing health coverage across state lines, residents of Florida have had, until now, no choice but to pay for every one of the 48 mandated coverages when purchasing their health insurance policy.

Florida recently sought to stem the rising tide of health insurance premiums, and to reduce its number of uninsured citizens, by passing a bill, known as “Cover Florida,” that allows streamlined insurance policies, with fewer coverages and at lower cost, to be sold to individuals who qualify.

The documents linked below offer additional information about Florida’s new approach and insurance mandates generally.

The Florida Revelation
This May 29, 2008 editorial from The Wall Street Journal praises Florida for “nudg[ing] the government out of the health care marketplace” and providing real price relief and policy choice to consumers of health insurance plans.

Insurance Mandates
The Las Vegas Review Journal editorial published June 1, 2008, also praises Florida for adopting a “market-based solution to providing health coverage to the uninsured,” noting it makes “perfect sense” and urging the Nevada legislature to “crib Gov. Crist’s idea and give the free market a chance to meet a demand that they [the legislature] clearly can’t.”

Study Doubts the Benefits of Health Insurance Regulation
This article from the June issue of Health Care News discusses an American Enterprise Institute study that finds minimum coverage regulations force individuals to carry more coverage than they can afford or their assets warrant, creating an environment where health insurance is unaffordable and a bad value for all but the sickest individuals.

Escape from New Jersey
This May 29, 2008 editorial from The Wall Street Journal praises the decision of Jay Webber, a Republican assemblyman in Trenton, to introduce legislation to let New Jersey residents buy health insurance from any registered insurance provider in any of the 50 states.

Florida Passes Bill to Boost Private Health Coverage for Uninsured
This June 2 article from the American Medical Association’s American Medical News publication discusses the effect the Cover Florida program could have on the number of the state’s uninsured.

State Laws Can Cripple Market for Health Insurance
This Health Care News article discusses a study by the Council for Affordable Health Insurance that investigates the popularity of health insurance mandates and minimum coverage levels in a number of states. While these regulations may satisfy narrow special interests, they dramatically raise the cost of health insurance for most consumers.

Reforming Health Care in Wisconsin
In this transcript of his testimony before the Wisconsin state legislature, Michael Tanner, director of health and welfare studies at the Cato Institute, explains how repealing excessive minimum coverage mandates is one of the most effective steps a state can take to reduce the cost of health insurance and thereby increase the number of people with insurance.

Analysis: State Mandates Drive Up Insurance Costs
This Health Care News article shows the dramatic financial effects of mandates (almost four-fold difference) in health insurance rates from low mandate/low cost states (Iowa and Wyoming) to high mandate/high cost states (New Jersey and New York).

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other environment topics, visit The Heartland Institute’s Web site at and PolicyBot, Heartland’s free online research database.

If you have any questions about this issue or The Heartland Institute, you may contact Jeff Emanuel, research fellow for The Heartland Institute and managing editor of Health Care News, at 312/377-4000 or [email protected].