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Costly Mandates Price Many Workers Out of Health Care Insurance, Committee Told
June 29, 2005

House Committee on Energy and Commerce
Published June 28, 2005

The relentlessly expanding mass of state regulations is driving up the cost of health insurance, forcing many working Americans to skip insurance coverage, witnesses told a hearing of the House Energy and Commerce Subcommittee on Health today.

The session was called to consider U.S. Rep. John Shadegg's Health Care Choice Act (H.R. 2355), legislation which could increase competition and lower premiums by allowing health insurers to sell coverage across state lines in any secondary state, but only be subject to the primary state's insurance regulations.

"The Health Care Choice Act will harness market forces to lower the cost of health insurance, and reduce the number of uninsured Americans," said Shadegg, R-Ariz. "As Speaker Hastert said when this bill was introduced, 'we shouldn't be forcing people to buy a Cadillac when all they need is a Chevy.'"

A January 2005 study by the Council for Affordable Health Insurance (CAHI) concluded that there are currently 1,824 mandates on state health insurers. While many rules impose welcome standards, others are questionable. According to one witness, acupuncturists are mandated in 11 states, massage therapists in 4, osteopaths in 24, and chiropractors in 47.

A 2004 study by eHealthInsurance found monthly premiums varying widely across different cities. In their study they found that for a family of four an insurance product with a $2,000 family deductible and 20 percent coinsurance could be had in Kansas City, Mo. for a monthly premium of $171.86, while that same coverage in Boston would cost $767.30 a month in premiums.

Dr. David Gratzer, senior fellow at The Manhattan Institute welcomed the bill, saying a "regulatory malaise" has stifled choices for consumers. Gratzer pointed to New York, New Jersey and Connecticut, where Health Savings Accounts, enacted in 2003 as part of the Medicare prescription drug benefit, are unavailable.

"I hope, if you're a New Yorker, you like managed care because, if you're in the individual market, your choices are managed care, managed care and managed care," Gratzer said.

"America's health care system doesn't have a market problem, it has a government problem," said House Energy and Commerce Committee Chairman Joe Barton, R-Texas. "Both the system and the uninsured are afflicted by the consequences of years of government meddling - too many regulations, too many subsidies, too many mandates and too many policies that were supposed to 'improve' health insurance. These efforts have combined to distort the market and make it very difficult for working Americans to purchase reasonably priced health insurance."

Barton said a markup of H.R. 2355 could come in "the very near future."

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