U.S. Census officials just revealed that 17.2 percent of North Carolinians went without health insurance between 2006 and 2007, up 2.1 percentage points from the preceding two years. That’s greater than the national average and translates to about 1.5 million uninsured Tar Heels.
These statistics are unfortunate, but they’re not surprising. North Carolina’s government has thrown up countless regulatory roadblocks that have made health insurance too expensive for ordinary consumers. If state officials want to expand health insurance in the state, they must reduce government interference with people’s health care and return decision making power to patients.
These moves, which would improve “health ownership” in the state, would significantly enhance the quality of care and bring costs down, making private insurance a reality for many more Tar Heels.
States with higher levels of health ownership spend just a fraction of what North Carolina does on health care each year. In the Pacific Research Institute’s annual state-by-state ranking of health ownership, North Carolina placed near the bottom for the second year in a row.
Lawmakers can start by cutting the number of burdensome benefit mandates. Today in North Carob, no matter a policyholder’s age, medical condition, or behavior, every insurance policy is required to cover marriage therapists, drug abuse treatment, chiropractics, and a host of other extraneous medical procedures. North Carolina has 47 of these mandates-more than almost any other state-and they significantly drive up the cost of insurance, pricing many families out of the market.
States at the top of the health ownership rankings, by contrast, don’t overload private health plans with onerous benefit mandates. Alabama, which has the highest level of health ownership in the country, imposes just 19 of them.
North Carolina also needlessly injects politics into insurance regulation by electing a state insurance commissioner. Because the commissioner must face voters every four years, he or she has a strong incentive to advocate popular but expensive regulations like benefit mandates-in order to curry public favor.
North Carolina doesn’t just over-regulate insurers. It butts unnecessarily into the affairs of healthcare providers too.
Over a quarter of all hospitals and hospital beds in the state are owned by local or state government. The vast majority of scholars agree that private hospitals deliver far more efficient and effective care than state-controlled facilities.
Compare this to Pennsylvania, where just one percent of hospitals are owned by some level of government.
Finally, North Carolina’s medical tort system, which ranks in the bottom half nationwide. forces health insurance premiums ever higher. Across the country, one in every eight doctors gets hit with a medical malpractice suits each year. And in North Carolina, it’s particularly bad. The average malpractice claim payment in North Carolina, at nearly $330,000, is higher than most other states. When physicians must pay high malpractice premiums to guard against potentially debilitating lawsuits, those costs get passed along to health plans, and ultimately patients.
All told, the monetary burden of excessive health regulations and medical tort costs amounted to $169.1 billion nationally in 2002. Medical tort costs alone accounted for more than $80 billion.
With such deficiencies in mind, it’s no surprise that North Carolina has such a high percentage of citizens without private health insurance. Private coverage is prohibitively expensive for many, so the state is forced to cover nearly one in every five residents under Medicaid, at a yearly cost of about $9 billion. Only by granting North Carolinians greater control over their healthcare decisions can the government drive down costs, improve health care, and expand insurance coverage in the state.