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Commentary

The Effect of State Regulations on Health Insurance Premiums: A Preliminary Analysis
Michael New, Heritage Foundation, 10-27-05

Michael New points out that while many state and federal policymakers decry the growing numbers of Americans without consistent access to affordable health insurance, they ignore evidence that “government policy, particularly excessive regulatory intervention, may price many Americans out of coverage and thus contribute to the high numbers of uninsured.”

New’s study attempts to determine the effect of state health care regulations on health insurance and finds that “state level regulations of health insurance are correlated with higher premiums.”

The regression model estimates that the presence of health plan liability laws increases monthly premiums by $26.72. Laws that give subscribers direct access to specialists increase monthly premiums by $33.10. Provider due process laws increase premiums by $22.49. Finally, each additional mandated benefit increases monthly premiums by $0.89. All of these findings easily achieved statistical significance.


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