Uninsured Rates Rise Dramatically in States with Strictest Health Insurance Regulations

• Published in: Policy File 1998
• Main Authors: Arnett, Grace-Marie, Schriver, Melinda L
• Format: Report
• Language: English
• Subjects: Government; Health care policy; The Heritage Foundation

During the heated debate on health care reform several years ago, some states jumped ahead of the rest by aggressively regulating their health insurance markets to speed reform. The data are now in, and they show that these attempts have backfired by harming the very citizens they were designed to help. Between 1990 and 1994, 16 states passed the most aggressive laws designed to increase access to health insurance for their uninsured citizens. They imposed mandates and regulations on health insurance for small employers and individual citizens, implementing at the state level many of the provisions contained in the failed Clinton health care bill. The results: In 1996, all 16 states experienced an average annual growth in their uninsured population eight times that of the other 34. In 1996, the one-year average growth rate in the uninsured population in the 16 regulatory states was 8.14 percent; in the other 34 states, however, it had fallen to only 1.02 percent. In 1990, before the blizzard of health care reform legislation, the two groups of states had been nearly equal at 4.6 percent and 3.9 percent, respectively. Although the primary intention of insurance reforms is to make insurance coverage more affordable and available, thereby increasing the number of people covered by private health insurance, the 16 states that complemented these more comprehensive reforms have had the exact opposite experience.