The Forgotten Five

Important Economic Facts Missing in the News

Missing Economic Fact #5: Government Health Care Mandates Increase the Number of Uninsured Americans

Viewers of the October 20 NBC Nightly News were greeted by Tom Brokaw, in his introduction to that evening's first story, telling them that "American health care is in crisis, and it's only getting worse fast." In the ensuing report, correspondent Robert Hager said that one of the problems in U.S. health care is "the number of Americans with no health insurance is greater than ever -- 41 million uninsured now; that number growing by an additional one million a year."

The problem of uninsured Americans has been a constant theme in health care reporting this decade. But as with NBC's Hager, few reporters actually attempt to explain why the number of uninsured Americans seems to grow by the year.

One reason: misguided government regulation. "For more than 30 years, state legislatures have passed laws driving the cost of health insurance higher," explain John C. Goodman and Merrill Matthews Jr. in a National Center for Policy Analysis (NCPA) report. "Known as mandated health insurance benefit laws, they force insurers, employers and managed care companies to cover -- or at least offer -- specific providers or procedures not usually included in basic health care plans." They note that "while there were only seven state-mandated benefits in 1965, there are nearly 1,000 today," including requirements for "such non-medical expenses as hairpieces, treatment for drug and alcohol abuse, pastoral and marriage counseling."

Most importantly, these mandates have produced some unintended consequences. Goodman and Matthews cite a National Bureau of Economic Research survey which "found that the cost of mandated benefits is usually borne by employees in the form of reduced wages, reduced work hours or loss of employment." Their own analysis, prepared for NCPA by the actuarial firm Milliman & Robertson, finds that the 12 most common mandates together "increase the cost of insurance by as much as 30 percent." This causes some small businesses to cancel their employees' insurance policies, increasing the nation's pool of uninsured workers.

Goodman and Matthews point out that the federal government has recently taken up this practice, imposing "two mandates that affect health insurance policies nationwide." These two "may not increase the costs of health insurance significantly but, as in the states, once the door is open every special interest will hurry through to besiege the legislature."

"When the legislators succumb and the dust settles," they conclude, "health insurance will cost more, employers and individuals will cancel more policies and Congress will face a growing uninsured 'crisis' -- a crisis largely of its own making."9 Responsible reporters will include such arguments in their stories about health care policy.

Sources For Journalists
Whom To Call For More Details On This Missing Fact

John C. Goodman or Merrill Matthews Jr. National Center for Policy Analysis (214) 386-6272
Michael Cannon Citizens for a Sound Economy (202) 783-3870


1) Mitchell, Daniel J., "Class Warfare Tax Policy: Myth and Reality," Heritage Foundation Backgrounder No. 1131, July 18, 1997. (

2) Schmitt, Eric, "House Vote Keeps Peanut and Sugar Price Supports," The New York Times, February 29, 1996, p. A19.

3) Tolman, Jonathan, "Federal Agriculture Policy: A Harvest of Environmental Abuse," Competitive Enterprise Institute's Environmental Studies Program, August, 1995. (

4) Anderson, Terry L. and Leal, Donald R., "The Rise of the Enviro-Capitalists," The Wall Street Journal, August 26, 1997, p. A16. (

5) Moore, Stephen, "GOP Budget Revolution: Promises Made, Promises Broken," Cato Institute Policy Analysis No. 281, September 2, 1997. (

6) Bartlett, Bruce, "Back Home Explaining the 'Dream Deal'," The Washington Times, August 15, 1997, p. A16.

7) Moore, op. cit.

8) Moore, Stephen, "Solving the Social Security Paradox," paper presented to Association of Private Enterprise Education, Washington, D.C., April 13, 1997. (

9) Goodman, John C. and Matthews Jr., Merrill, "The Cost of Health Insurance Mandates," National Center for Policy Analysis Brief Analysis No. 237, August 13, 1997. (