Coverage Mandates Included in Massachusetts Health Insurance Law Cost $1.3B Annually, Report Finds

Coverage of 26 health benefits mandated under Massachusetts' health insurance law account for 12 cents of every $1 paid for health insurance, and statewide, the mandates cost about $1.3 billion annually, according to a report released on Monday by the state Division of Health Care Finance and Policy, the Boston Globe reports. The report was commissioned in 2006 as part of the law.

The report reviewed studies about the mandates and estimated that most of them were cost-effective. However, the report suggested that regulators consider removing several mandates that are not considered to be the standard of care, such as bone marrow transplants for breast cancer treatment. The report also found that five of the coverage mandates -- maternity care, mental health, home health, pediatric preventive care and infertility services -- account for 80% of the total cost of mandated benefits. Excluding benefits mandated by federal law, the state's mandates would cost up to $687 million annually, or roughly six cents of every $1 paid for health insurance, according to the report.

The release of the report effectively lifts a moratorium imposed by the law on adding mandated health benefits. Universal health coverage advocates say that the report's findings indicate that "regulators and lawmakers are not going to be able to wring significant cost savings from slashing existing benefits," the Globe reports. However, insurers and small businesses contend that the report shows the mandates are driving up health costs. Businesses say the mandates increase costs by roughly $1,300 annually per employee in a family plan.

A moratorium was included in the law on including additional mandated health benefits until the report was released. State lawmakers already are considering proposals to expand the mandates. The report did not include the estimated cost of mandatory prescription drug benefits, which is being phased in this year (Lazar, Boston Globe, 7/8).

The report is available online.