When you hear the U.S. government now requires all health insurance plans to cover a certain medical procedure, it may feel like a win for consumers. The part they don’t tell you is what this new mandated coverage is actually costing on the back end — hence driving up premiums.
One mandate in New Jersey allows coverage for four cycles of in-vitro fertilization (per lifetime) for employees of companies with more than 50 employees, which can cost the carrier upwards of $40,000; the costs don’t stop there. With in-vitro fertilization, mothers often have multiple births, premature births and/or high-risk pregnancies requiring more monitoring, and more costs all around.
While it is not my point to say that a person should or should not be entitled to have a child, it is a costly mandate. I know of several people who went to work for a New Jersey large group employer instead of one in Pennsylvania so they could get this coverage. People will quit their jobs and come to a New Jersey employer when a $40,000 in-vitro benefit is part of the salary package.
There is a perception that the cost of new mandates is somehow absorbed by the government or by the health insurance carriers. A recent Kaiser Family Foundation study showing a 9 percent increase in rates for employer-sponsored health insurance plans between 2010 and 2011 suggests that is not the case at all.
As an insurance broker and member of the New Jersey Association of Health Underwriters, I meet with small-business owners every day to discuss their health insurance plans. Often, the discussion turns to the costs of health insurance and what businesses can do to keep offering quality benefits to their employees. We review options that can save them money, such as higher-deductible plans combined with health savings accounts. These are useful options, but not the gold standard, no-questions-asked plans of years before.
We talk about special needs and certain coverage for specific illnesses. It is my job to explain to clients why the price of coverage continues to rise each year because of additional mandates and escalating medical costs. The average family health plan today costs more than $15,000 a year.
When lawmakers considering a new mandated health benefit convene, they hear from organizations and lobbyists dedicated to finding financial support to fight a certain health concern. They hear from passionate doctors who treat the ailment. They hear from patients who have suffered. I know the testimony can be compelling. What politician wants to be attacked in campaign ads for ignoring the needs of the sick?
The voice they aren’t hearing is the voice of the consumer. These are the people who need to decide between keeping their insurance coverage and paying their mortgage. They are the small-business owners who would like to hire another employee, but aren’t able to afford the additional health insurance premiums.
I understand the need to ensure that policyholders will be covered when they become ill. But in this economy, people also need choices. If consumers want to purchase a basic, low-cost policy they can afford, they should be free to do so — without all the mandates.
Health insurance rates in New Jersey are among the highest in the nation, due, in large part, to lawmakers requiring insurance companies to keep adding services as part of the basic plan. Now, with President Barack Obama’s health care reform law, rates will continue to climb. The next time you hear about additional coverage you’re being ‘given,’ remember that nothing comes for free.
Wendy Ebner is president of the New Jersey Association of Health Underwriters and director of business development with Savoy Associates, in Hamilton.