So, you want to replace profit-driven health care with politics-driven medicine?

In 1997, government-mandated coverage raised the cost of health
insurance by 15% to 30%. Costs have risen even higher since then.

A clever video takedown of Oregon's heavily politicized Medicaid system is currently making the rounds, and serving as a warning against further government involvement in the provision of health care. Produced by Colorado's Independence Institute, the video (below) shows how ailments with political constituencies are covered under the government medical system, while unchampioned conditions get short shrift. The video makes good points, but it misses the fact that politicized government decisions already play a role in driving up the cost of private medical coverage.

Back in 1997, the National Center for Policy Analysis (NCPA) brought  in the actuarial firm Milliman & Robertson to estimate the costs created by increasingly common laws mandating coverage by private health insurance companies of growing lists of providers, conditions and benefits. Under pressure from constituencies for chiropractors and autistic children, for instance, lawmakers were ordering private insurers to include all sorts of things in their coverage that only a few customers might care about -- but for which everybody had to pay.

At that time, wrote NCPA President John C. Goodman, "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."

In its study, Milliman & Robertson found that the twelve most common mandates -- the ones most often replicated from state to state -- could increase the cost of a family health insurance policy by as much as 15 to 30 percent. For a small business employing 25 people, such mandates could increase premiums by $20,000 per year.

That was in 1997. Mandates have only increased in scope and cost since.

In 2005, the Council for Affordable Health Insurance revisited the issue, and went beyond the 12 mandates examined in 1997 to study the impact of dozens of conditions, providers and other benefits that, by law, had to be included in private health care coverage. The report (PDF) found that each mandate usually raised the cost of health care by anywhere from under one percent to three percent, with a few mandates hiking bills by  as much as ten percent. But many tiny increments taken together can add up. The "nearly 1,000" mandates found by the NCPA in 1997 had turned into "more than 1,800."

And costs?

CAHI said, "mandated benefits currently increase the cost of basic health coverage from a little less than 20% to more than 50%, depending on the state."

Mandates are insidious because there's always a good argument as to why any given condition or service should be covered by health insurance. How does a lawmaker say "no" to requiring services for autistic kids? It's not easy to say that this condition should not be covered. But there's always another this condition to add to the growing list of mandates.

And when you impose those mandates, you raise the cost of health coverage beyond the reach of growing ranks of people. As CAHI put it:

Mandating benefits is like saying to someone in the market for a new car, if you can’t afford a Lexus loaded with options, you have to walk. Having that Lexus would be nice, as would having a health insurance policy that covers everything one might want. But drivers with less money can find many other affordable options; whereas when the price of health insurance soars, few other options exist.

We can go farther with that analogy. Mandating benefits is like outlawing Fords and Kias so that only luxury cars are available, and thereby creating a situation where everybody complains that automobiles are unaffordable. Well, of course -- affordability was made illegal.

The distorting effects of politicized medical decisions in Oregon are clearly covered in the Independence Institute's video (below). But we're all already living with the results of government intrusion into medical decisions.

email J.D.: civilliberties (at) tuccille.com