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Mandating coverage

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These mandates apply only to those health insurance policies controlled by state health insurance laws - usually policies purchased by small businesses and individuals.Most large companies avoid state mandates by self-insuring under the Employee Retirement Income Security Act (ERISA), which exempts self-insured companies from state oversight.

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They may apply to all individual and group plans regulated by the state, or they may be more limited.Consumer Operated and Oriented Plan Programs (COOPs) were really a political compromise between Members of Congress who wanted a public plan option and those who didn’t.Once the Affordable Care Act passed, COOPs had outlived their usefulness.Because the federal mandates would apply universally, self-insured companies would come under federal control. The real threat behind the Congress's newfound interest in mandating health insurance benefits is incremental rather than immediate.One or two federal mandates may not increase the cost of health insurance significantly but, as in the states, once the door is open every special interest will hurry through to besiege the legislature.When the legislators succumb and the dust settles, health insurance will cost more, employers and individuals will cancel more policies and Congress will face a growing uninsured "crisis" - a crisis largely of its own making.

For decades, states have set rules for health coverage through mandates, laws that require insurers to cover specific types of medical care or services.

A new analysis prepared for the National Center for Policy Analysis by the actuarial firm Milliman & Robertson estimates the costs of 12 of the most common mandates and finds that, collectively, they can increase the cost of insurance by as much as 30 percent. Although there were only seven state-mandated benefits in 1965, there are nearly 1,000 today.

While many mandates cover basic providers and services, others require coverage for such nonmedical expenses as hairpieces, treatment for drug and alcohol abuse, pastoral and marriage counseling.

However, economists recognize that employee benefits are a substitute for wages in the employee's total compensation package.

Higher benefits often force employees to take lower wages whether they like it or not.

However, the federal govern-ment's new mandates - banning "drive-through" baby deliveries and requiring that any cap on mental health benefits be the same as the cap on physical health benefits - apply to all insurance.