Day 13: Reduce Unnecessary Regulations That Drive Up Cost of Health Care
Health care is among the most heavily-regulated areas of the economy. One particularly costly regulation requires health insurance companies to be licensed and regulated within their respective states. Among other things, this forces young, healthy individuals looking for "bare bones" insurance plans to pay for a slew of coverage items that they have no need or desire for and that dramatically increase the prices of their plan. New Mexico’s 59 mandates are more than all but a handful of states, thus driving insurance prices in the Land of Enchantment higher than necessary.1
Aside from the mandates, New Mexico is a relatively sparsely-populated state that allows fewer opportunities for "risk pooling" (the very point of insurance).2 This drives up the cost of health insurance plans in the state. Enabling additional health insurance companies to do business in the state along with larger risk pools will inevitably drive down the cost of this insurance.
The Public Regulation Commission should allow any insurance company licensed in another state to do business in New Mexico. Absent that ideal situation, the PRC should negotiate "compacts" with other states to allow reciprocity agreements between states to allow insurance companies licensed in one state to practice in both states.
The Legislature should undertake an effort to reduce or eliminate regulations, perhaps making them optional under certain low-cost health plans targeted at young people. Foisting 59 mandated coverages on anyone who purchases health insurance is like mandating that a young or poor person purchasing a car must buy a fully-loaded BMW or go without a car.
1Victoria Craig Bunce, "Health Insurance Mandates in the States, 2011," Council for Affordable Health Insurance, 2012, http://www.cahi.org/cahi_contents/resources/pdf/MandatesintheStates2011ExecSumm.pdf
2http://en.wikipedia.org/wiki/Risk_pool