Abstract
This paper examines the effects of laws mandating that health insurance cover specific conditions, procedures, providers, and beneficiaries. Unlike previous work, this paper considers the market for employer-based health insurance rather than the much smaller individual market, and uses a panel data approach to account for unobserved heterogeneity among states. Using a fixed effects model, I find that the average mandate increases premiums by 0.44–1.11 percent annually. This implies that new mandates were responsible for 9–23 percent of all premium increases over the 1996–2011 period.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Baltagi, Badi H., and Ping X. Wu . 1999. Unequally Spaced Panel Data Regressions With AR(1) Disturbances. Econometric Theory, 15 (6): 814–823.
Cummins, Jeff 2011. Party Control, Policy Reforms, and the Impact on Health Insurance Coverage in the US States. Social Science Quarterly, 92 (1): 246–267.
Drukker, D.M. 2003. Testing for Serial Correlation in Linear Panel-Data Models. Stata Journal, 3 (2): 168–177.
Gohmann, Stephan F ., and Myra McCrickard . 2009. The Effect of State Mandates on Health Insurance Premiums. The Journal of Private Enterprise, 24 (2): 59–73.
Gruber, Jonathan 1994a. The Incidence of Mandated Maternity Benefits. The American Economic Review, 84 (3): 622–641.
Gruber, Jonathan . 1994b. State-Mandated Benefits and Employer-Provided Health Insurance. Journal of Public Economics, 55 (3): 433–464.
Jensen, Gail A., and Jon R. Gabel . 1992. State Mandated Benefits and the Small Firm's Decision to Offer Insurance. Journal of Regulatory Economics, 4 (4): 379–404.
Jensen, Gail A., and Michael A. Morrisey . 1999. Employer-Sponsored Health Insurance and Mandated Benefit Laws. The Milbank Quarterly, 77 (4): 425–459.
Kowalski, Amanda E., William J. Congdon, and Mark H. Showalter . 2008. State Health Insurance Regulations and the Price of High-Deductible Policies. Forum for Health Economics & Policy, 11 (2): 1–24.
Lahey, Joanna N. 2012. The Efficiency of a Group-Specific Mandated Benefit Revisited: The Effect of Infertility Mandates. Journal of Policy Analysis and Management, 31 (1): 63–92.
LaPierre, Tracey A., Christopher J. Conover, James W. Henderson, J. Allen Seward, and Beck A. Taylor . 2009. Estimating the Impact of State Health Insurance Mandates on Premium Costs in the Individual Market. Journal of Insurance Regulation, 27 (3): 3–36.
Laudicina, Susan, Joan Gardner, and Kim Holland . 2011. State Legislative Healthcare and Insurance Issues, Technical Report: Blue Cross Blue Shield Association.
Monheit, Alan C., and Jasmine Rizzo . 2007. Mandated Health Insurance Benefits: A Critical Review of the Literature, Technical Report: New Jersey Department of Human Services, http://www.cshp.rutgers.edu/Downloads/7130.pdf.
Rothschild, Michael, and Joseph Stiglitz . 1976. Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information. The Quarterly Journal of Economics, 90 (4): 629–649.
Sloan, Frank A., and Christopher J. Conover . 1998. Effects of State Reforms on Health Insurance Coverage of Adults. Inquiry: The Journal of Health Care Organization, Provision and Financing, 35 (3): 280–293.
van der Goes, David N., Justin Wang, and Katharine C. Wolchik . 2011. Effect of State Health Insurance Mandates on Employer-Provided Health Insurance. Eastern Economic Journal, 37 (4): 437–449.
Acknowledgements
Thanks to Art Carden, Laura Shinn, Eleanor Lewin, David Cutler, members of the Temple Dissertation Seminar, and four anonymous referees for useful comments. Thanks to Steven Landess for help securing data.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Bailey, J. The Effect of Health Insurance Benefit Mandates on Premiums. Eastern Econ J 40, 119–127 (2014). https://doi.org/10.1057/eej.2013.16
Published:
Issue Date:
DOI: https://doi.org/10.1057/eej.2013.16