From Heart Transplants to Hairpieces: The Questionable Benefits of State Benefit Mandates for Health Insurance
A benefit mandate is simply a state law that requires a health plan to pay for (or at least offer) a specified treatment, but there is nothing simple about quantifying the costs of such mandates.
This paper reviews 28 original actuarial and econometric articles that attempt to estimate the cost of benefit mandates, as well as others that summarize the literature on mandates during the last two decades of their development. The results vary widely. No scholar has replicated the experiments of his colleagues, thereby rendering scientific conclusions impossible. The hardy few who have attempted to measure the costs use different (often uncertain) data sources, and run them through different models, often of dizzying complexity.
On balance, this research yields a rather broad set of results. Even so, we are able to reach some conclusions about costs and offer public policy guidelines for mandates, which affect every American.