An Examination of State Non-Group and Small-Group Health Insurance Regulations

A new working paper written by Anthony T. Lo Sasso, Ph.D., University of Illinois at Chicago and released by the American Enterprise Institute.The present upswing in state-level efforts to “do something about health care,” combined with presidential campaign-related rhetoric, suggests that health care is back with a vengeance on the public consciousness. Many states are proposing what appear to be new strategies to cover the uninsured when in reality the “new” strategies rely on old approaches that have not proven highly effective in the past, notably community rating and guaranteed issue regulations. Using data culled from a popular health insurance distributor and the published literature provides a compelling portrait of the predictable distortions that can result from regulations aimed at improving perceived deficiencies in the non-group and small group health insurance markets. The information compiled and presented here provide a compelling portrait of the predictable distortions that can result from regulations aimed at improving perceived deficiencies in the non-group and small group health insurance markets.  After reviewing both theoretical and empirical literature, the author concludes: “The predictions from economic theory are unambiguous and the bulk of the scholarly literature consistently point to decreases in coverage for young and healthy individuals and (with less regularity) increases in coverage for older and unhealthier individuals. A common sense look at the premiums for non-group health insurance policies in regulated and unregulated markets suggests that regulated markets offer only limited options for the healthy and still quite expensive options for the unhealthy.”  Abstract (html) with link to full report (pdf).

---

Possibly related posts: (automatically generated)

• ’Opt-in’ insurance for 50 states: A deal-maker for health care reform?
• Biden Says Tighter Regulation of Insurance Industry Is Critical to Health R…
• Bad Medicine