McCrory fudges the numbers

Pat McCrory says on his website, and repeats on the campaign trail, the statistic that North Carolina’s insurance mandates “increase insurance premiums by more than 41 percent.”

Where does he get those numbers? From the Council for Affordable Health Insurance.

CAHI estimates that each of the mandates in NC adds 1 percent or less to the price of insurance premiums. So McCrory adds up the total number of mandates to get his nifty statistic.

But here’s what one of the authors of the report, JP Wieske, says in a comment to one of our previous posts about adding up the numbers:

Additionally, if you have looked at our whole report, you’ll find we caution against adding up the numbers. In fact, you’ll find the vast majority of mandates are actually listed at less than 1% — a position that is often used by mandate advocates. We also don’t reccomend adding them up because we use ranges.

I also want to emphasize the impact on premiums can vary quite a bit — from state to state and plan to plan. In truth, estimating mandates across the whole market — large group, small group, individual, PPO, HMO, high deductible, managed care, etc. creates many variables.

Our data is based on what our member actuaries see in their job, and how they price real products.

I would add that because CAHI gets its information from insurance companies it does not provide a detailed explanation of how the numbers are derived. So, McCrory, please stop using bogus numbers.


  1. Libertarian Girl

    October 31, 2008 at 10:59 pm

    Just because one of the study’s authors says the numbers can vary doesn’t mean the whole thing is bogus. My relatives in New Jersey used to have very affordable health plans before NJ passed a raft of mandates– hair transplants, etc.— in the mid-’90s. Now, a healthy 22-year-old with no medical problems can’t get a monthly policy for less than $1,500 a month. This is from a time when a very decent family policy could be had for a few hundred dollars a month before the mandates started.

    It’s definitely true in New Jersey and has been well-covered in various reports, and it’s probably true in North Carolina but maybe hasn’t been covered as much. If it’s true, it needs to be fixed: an insurance company couldn’t sell an affordable policy if they wanted to. It would be illegal because it wouldn’t have all these mandates.

  2. JP Wieske

    November 2, 2008 at 3:45 pm

    In fact, the point above is exactly right. On some plans, mandated benefits can and do lead to very significant rate increases, on others maybe not so much. And equally important is which mandates, and how the mandates were implemented. The federal Women’s Cancer Rights Act mandated coverage for breast reconstruction surgery for mastectomies. The cost of the mandate itself was neglibile, but each insurer had to pay in the range $1 million a year to pay for annual notices no one ever reads (printing, stuffing envelopes, plus mail costs)

    I was once asked which mandate or mandates we’d eliminate first. In fact, we are agnostic. The price controls New Jersey implemented in the 1990’s are worse than any mandated benefit.

  3. AdamL

    November 2, 2008 at 3:46 pm

    Actually, “various reports” show that mandates do not increase the average price of health plans very much — anecdotes aside. To claim that mandates add thousands of dollars to the price of a plan is just silly.

  4. Adam Searing

    November 3, 2008 at 11:16 am

    I just checked out New Jersey Blue Cross. They don’t rate down by age or gender on the website but you can get an HMO plan for an average quote of about $500/mo – and I’m sure someone who is 22 and in good health it would be much less.


    Those pesky facts….they do tend to get in the way of a good story.

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