Best insurance is what you can afford

When you go to the grocery store, nobody makes you fill your cart with specific food items, including ones you don't really want and perhaps can't afford.



When you buy a computer, the government doesn't compel you to load it with dozens of extra software programs you can't use.



But when individuals and small businesses buy health insurance, the state of Montana insists that they buy policies that include coverage for 35 services or procedures, ranging from podiatry to drug abuse treatment to dentures. There's absolutely nothing wrong with buying insurance for any of these services or others, but there is something wrong with the state Legislature or Congress forcing you to do so.



Mandated coverage costs money. The Montana Auditor's Office cites figures provided by Blue Cross Blue Shield estimating those 35 state mandates cost just $15.50 per month extra. Really? The actuarial firm Milliman & Robertson did a study in 1997 for the National Center for Policy Analysis and found the 12 most common coverage mandates imposed by states jack up the cost of insurance by



30 percent.



Whatever the amount, it's something we should have second thoughts about in an era when 44 million Americans can't afford health insurance.



What got us thinking about this was an editorial in Monday's Wall Street Journal endorsing a bill in Congress to allow people who buy health insurance on the open market to shop around the 50 states for the best deal. The bill, introduced by Arizona Republican Rep. John Shadegg, would allow people to buy the insurance they want and can afford, not what their states mandate. The Journal cites figures provided by eHealthInsurance.com showing that a typical policy for a family of four costs as little as $172 a month in Missouri but can cost as much as $840 a month in New York or $1,200 a month in New Jersey.



State Auditor John Morrison says Shadegg's bill is a terrible piece of legislation - that it would allow an insurance company licensed in one state to do business nationwide without licensing in other states. He says the bill is part of a move by some Republicans to deregulate insurance and that doing so would be a disaster for consumers. Maybe. But would the results really be worse for consumers? How could it be worse for the 44 million who can't now afford health insurance? The policies in question are ones bought by individuals and small employers - large employers who provide insurance aren't affected. It's sort of like arguing what's best for motorists is driving Cadillacs. It may be true. But what's also true is that most people can't afford them.



Shadegg's bill wouldn't prohibit states from mandating coverage. It simply would free consumers to shop around. The standard argument for coverage mandates is that they're needed to protect consumers. But what they really do is provide a guaranteed revenue stream for providers. Legislators may take credit for giving something to the consumers for nothing when they are really giving something to the providers for nothing. A win-win for the legislators, but not necessarily a good bargain for the consumers. We can't say that Shaddeg's bill is the perfect approach, but we can say the matter of mandated coverage is worth greater scrutiny.



And the one thing we know for sure is that the most comprehensive insurance policy in the world isn't much good if you can't afford it.