GOVERNOR PATRICK’S move last month to require health insurers to cover gender reassignment surgery revived a perennial flash point: For health insurers and the employers who pay most premiums, opting not to cover some services makes insurance cheaper. But for people with expensive medical conditions, these decisions often seem arbitrary or unjust. Over the years, lawmakers have wrestled with requiring insurers to pay for treatments for a variety of conditions, from infertility to tobacco addiction to gender dysphoria. So which criteria should be used in the decision-making process?
Listen to the public’s common sense
For nearly every health insurance mandate, there’s a heart-wrenching story. And while you can’t legislate by emotion, you can gauge the public’s values and its willingness to consider costs and benefits. Years ago, I sat in a State House hearing with families whose kids had a rare genetic disorder that led to the loss of teeth. They were asking the state to mandate coverage of dentures and dental implants — which, according to a state-commissioned analysis, would add 28 cents per year to premiums. Ask most voters if they’d spend some pocket change on a few kids’ chance at a normal life, and they’d probably say yes.
The public often senses — before the insurance actuaries do — which expenses are worthwhile. Some analysts complain about Massachusetts’ mandated coverage for infertility treatments. (I was once a beneficiary; a month of frequent doctor visits yielded a boy who is headed to kindergarten this fall.) But there’s a cost-benefit calculation here, too. In states without mandates, a round of in vitro fertilization can cost tens of thousands of dollars. Some families mortgage their homes and deplete their nest eggs for a single chance at pregnancy. And those financial stakes lead to risky behavior, such as implanting multiple eggs — which increases the chances of multiple births, which can lead to expensive neonatal care.
Ask people if they’re willing to help infertile couples make families, and they might say no. Ask if they’d spend a few dollars to see fewer infants in intensive care, and the answer might be different.
Let the market decide — or at least set standards
This issue is like a balloon. You have a health problem that, by the state’s judgment, requires a mandated benefit, which causes an economic problem (drives up costs). Then you need to mandate something else (regulatory price controls or restrictions on how medicine is practiced) that causes other unintended consequences.
The deeper problem is that only a small sliver of our population can vote with their feet to switch insurers. If we had a competitive marketplace for insurance, and it was not linked to our employment, you would see insurers advertising all the additional benefits they offer — instead of fighting the Legislature and advocates to prevent another mandate. It’s not a perfect comparison, but think of the smartphone market. No regulatory or legislative body dictates which features your phone must have. The companies do the design innovation on their own, and try to sell you on the new features they add.
All that said, the Legislature should do four things within the current political realities:
1. Set standards that proposed mandates must satisfy — in terms of the number of individuals affected, the cost of other treatment options, etc.
2. Consider alternatives to a mandate, such as offering tax credits to companies that voluntarily offer such coverage, or individual deductions to offset the cost of care.
3. Stipulate that any new mandate will be suspended, or allowed to expire, if premium costs for small companies rise faster than a specific rate threshold.
4. Require an independent analysis that includes the cost impact for states (or companies) that have implemented the same coverage previously. Why would you mandate something without knowing the cost or if it even works?
Consider the cost of not getting care
Everyone wants the medical care they need when they’re sick. So how should we respond when insurers won’t cover the best, or the only, treatment for a serious health condition? Beyond ensuring that the treatment is both necessary and effective, we should also consider the long-term costs of not providing treatment, which are frequently greater than the cost of the treatment itself. The collateral consequences of untreated disease, such as physical therapy, psychotherapy, or pain management, can be costly for insurers. When someone cannot work due to pain, immobility, or depression, society ends up paying for that person’s health care and other necessities.
While every situation is different, let’s consider, as an example, a piece of legislation that we are supporting: It would provide medical treatment for lipodystrophy, a disfiguring side effect of older HIV medications. Lipodystrophy creates a highly visible physical impairment. Many who suffer from this condition do not leave their homes and become depressed, even suicidal. Insurers cover restorative procedures for the side effects of other life-saving treatments, including breast reconstruction for cancer patients, but they won’t cover inexpensive treatments for lipodystrophy.
Society pays for this disparity through added medical costs when people stop their HIV drugs due to fear of developing lipodystrophy. We could call for fairness in addressing this disparity. Instead, let’s apply basic principles of cost-effectiveness, and protect our collective medical and fiscal health.
No more coverage mandates — period
In 2006, Massachusetts consumers were told they should be personally responsible and pay their fair share for the cost of their health care. But big specialty medical providers, biotech firms, and other powerful health care interests immediately began lobbying to expand the scope of what consumers and taxpayers were forced to buy. Once services or products are mandated, utilization skyrockets. So do provider reimbursements, resulting in huge profits and unaffordable medical inflation.
Massachusetts has added an incredible 21 new mandates and assessments since health care reform was signed into law eight years ago. That’s nearly three per year that consumers and taxpayers have been told they must pay for — but not everyone. Our insurance laws are discriminatory. Large, self-insured employers operate under federal law and are not subject to state mandates; yet employees of small businesses are, and they must bear the full cost.
Common sense tells us that everyone needs good coverage for hospitalization and preventive care. But we need to start moving in the consumer-friendly direction of placing some of these mandates under a category of optional insurance — similar to the additional riders you can add onto home and auto insurance. Maine has been a leader on this approach.
We’re straying further away from the concept of health insurance being designed to pay our fair share. We’ve reached the point of requiring certain consumers to pay for someone else’s care, by mandating coverage they don’t want, will never use, and can’t afford.