The effect of state mandates on health insurance premiums

Health insurance mandates require insurers to provide coverage for specific services, providers, or illnesses. This paper examines how state health insurance mandates influence premiums and enrollment in health insurance plans. Contrary to previous studies that compare premiums across states, we examine premiums for the same plans in cities that lie on state borders. By holding both plan and population characteristics constant, we isolate the impact of state mandates on insurance premiums. Some mandates increase premiums by 24 percent. These higher premiums reduce enrollment in health plans and may also affect the decision to become self-employed or to change jobs.