For years, insurers and employers have grumbled about the costs added by state insurance mandates. But no one was quite sure what those costs were.
Yesterday, a report to the Health Care Access and Cost Commission put a price tag on those mandates -- a total cost of $604 per year per policy, or 15.4 percent of the premiums for typical group coverage.
However, the study said, many of those costs would have been covered by insurance anyway (such as a mandated mammogram that would have been covered as part of normal preventive services), so the added cost of the mandates was estimated at just $148 per year, or 3.8 percent of premiums.
Also yesterday, the commission's annual report on health costs in Maryland placed the total bill for care in 1997 at $15.9 billion, up 2.8 percent from the previous year.
While the overall cost study has been produced for several years, the review of mandates was ordered last year by the state legislature, concerned that the costs of mandates might be putting Maryland at a disadvantage in attracting business. The commission, in turn, hired William M. Mercer Inc., an actuarial consulting firm, to calculate the costs, based on commission data, a survey and Mercer's own databases.
While Maryland, with 25 mandates, has more than neighboring states (Virginia has 12; Pennsylvania, eight; Delaware, two), "the dollar value is similar to other states in the region," because nearby states tend to have adopted the most expensive mandates, said Barbara G. McLean, deputy director of the commission.
Those expensive mandates, the study found, were mental health coverage equal to other coverage, at $213 per year per policy total and $21 in added costs, and maternity coverage, $137 total and $37 added.
In some cases, the cost of the mandate is low, although it involves an expensive medical procedure, because relatively few people are involved. For example, the total cost of mandated coverage for in vitro fertilization was pegged at $6 a year.
The commission recommended the legislature put a cap on mandates, something in the range of 2 percent to 2.2 percent of average annual wages. (Current mandates have a total cost of 1.9 percent of wages, according to the study.)
If the cap were reached or exceeded, "it would act as a signal to the legislature that it's time to re-examine and rethink," McLean said.
The report does not attempt to determine whether the mandates produce savings. Advocates say mandates for preventive services can help avoid expensive care later. McLean said there were not enough data to make an accurate estimate of savings.
Some of the mandates do not apply to HMOs, but do apply to other health insurers. None applies to large employers that self-insure, which are regulated by federal law. About a third of insured Marylanders come under that category, according to commission estimates.
The annual expenditure study reported that 13.4 percent of Marylanders are not insured at all, a number that has remained fairly steady over the past few years.
Among other findings of the expenditure study:
While per capita health spending for HMO members is still lower than for those with other forms of insurance, the gap is narrowing, probably because the HMOs are no longer insuring people who are, on average, much healthier than those in other types of plans.
Total spending rose most rapidly for nursing homes, up 12.5 percent over 1996, and home health services, up 8.3 percent. Spending on inpatient hospital care and on physician services each increased less than 1 percent -- but those two categories still account for just over half of all health costs.
Co-payments and deductibles accounted for 4.7 cents of each dollar spent on health.
Pub Date: 12/04/98