Policy Documents

Mandated Benefits Review Act

American Legislative Exchange Council –
January 10, 2001

In this model legislation, the bill states:

The purpose of this Act is to initiate a review of all current and proposed state-mandated benefits. Mandated health insurance benefit laws require that health insurance contracts cover specific diseases and disabilities and provide for specific health care services. With few exceptions, mandated benefits raise the cost of conventional health insurance. In fact, it is estimated that as many as one out of every four people who lack health insurance have been priced out of the market by costly mandates.4 And one insurance company in Massachusetts estimates that mandated benefits add nearly $55 per month to the cost of a policy.

The bill would create an independent committee to review all current state-mandated benefits. The committee would be charged with reviewing the cost effectiveness, the medical efficacy, and the social need for each mandated benefit. All existing mandated benefits and mandated health insurance coverage would expire within one year after the effective date of the Act unless specifically reauthorized by the legislature on the basis of the committee’s findings. All future, proposed mandated benefits would need a financial impact statement and a recommendation of need from the committee.