NU Online News Service, Oct. 2, 2003, 5:43 p.m. EDT – Forty-seven states impose some kind of restrictions on small group health insurance rates, and the marginal cost of state-imposed health benefits mandates is much lower than the total cost, according to a report from the U.S. General Accounting Office.

The small business health insurance market report describes the state laws and regulations that shape the small group health market.

One section of the report covers the cost of benefits mandates.

Kathryn Allen, the GAO’s health care director for Medicaid and private health insurance issues, notes in the report that many studies look at the total costs of benefits required by state mandates, rather than looking at the marginal cost of benefits that employers add as a result of the mandates.

The marginal cost is more relevant because, in many cases, “employers may have chosen to cover some or all of these benefits even in the absence of any mandate,” Allen writes.

Allen cites a Maryland study that found that the total cost of the state’s many mandated benefits account for 14% of premiums but that the mandated benefits added only 3% in marginal costs.

Other appendices in the report give information about each state’s policies regarding state small group premium restrictions, state claim denial review requirements and state strategies for complying with federal coverage access requirements.

The GAO has posted the report at http://www.gao.gov/cgi-bin/getrpt?GAO-03-1133