The legislature’s Insurance and Real Estate Committee may not fully realize it, but they voted to raise the healthcare costs of small businesses in Connecticut this week.
How? By approving two more health insurance mandates—laws that require state-regulated insurance policies to cover certain medical procedures and services.
Small businesses generally cannot afford to self-insure (that is, directly pay for their employees’ medical claims), so they must purchase healthcare through state-regulated, fully-insured policies. And with each new or expanded mandate, the cost of insurance for these plans rises.
Connecticut now has at least 59 health insurance mandates, and by some counts the tally is well over 60. Each mandate immediately raises health insurance premiums. Add them all up and the result is that it’s harder for small businesses and their employees to afford health insurance.
The Council on Affordable Health Insurance (CAHI) estimates that health benefit mandates add an estimated 20% to 50% to the cost of health insurance in Connecticut.
And a recent report by the National Center for Policy Analysis estimates that 25% of the uninsured in the U.S. have been priced out of the market by state mandates.
Larger businesses, on the other hand, are more likely to self-insure, which means they avoid the state-regulated mandates. Consequently, mandates unfairly and disproportionately make health insurance more expensive for those that can least afford it—small businesses and their employees.
For years the business community has asked the committee to avoid adopting these costly measures that only make health insurance more expensive and increase the likelihood that companies will have to drop coverage.
Recently, the committee defeated a proposal that included several mandates. That was a good decision. However, if lawmakers are truly serious about reducing the cost of healthcare in Connecticut, they must say “no” to all of these proposals and impose a moratorium on any further mandates.