We promised we would never let this false information go unanswered. Once again, someone has misused the DHCFP study on the cost of mandated health insurance benefits in Massachusetts to make the false claim that mandated benefits add up to 12% of insurance costs. Once again, it’s our job to correct the misinformation. (See our original blog here, and our followups correcting the Herald, and HPHC CEO Charlie Baker.)
This time it’s the Massachusetts Association of Health Plans (MAHP). In their 2008 annual report, they devote a page to mandated benefits. They claim that “Mandated benefits are one reason the cost of coverage in Massachusetts is so high. A state report tagged the cost of current mandated benefits at $1.3 billion or 12¢ for every dollar paid for health insurance.”
No, that’s not the conclusion of the DHCFP study. The DHCFP properly takes out from the impact of state mandates the cost of federal mandates and benefits that would be provided even without a mandate. Their conclusion: “mid-range estimates in the three to four percent of premium range (roughly $300 million to $400 million annually) may be a reasonable estimate of the mandate laws’ marginal impact on health care costs directly associated with the covered benefits described in the laws.”
That’s three to four percent. Not 12%.
People can disagree over whether specific new mandates are in the public interest or not, and understanding the cost of a mandate is helpful for that discussion. MAHP says we should put a moratorium on new mandates until medical costs remain flat for two years. We might disagree on some mandates, agree on others.
But MAHP along with everyone else has an obligation to be honest with what the authoritative study has concluded.