The Small Business & Entrepreneurship Council released last week its "Health Care Policy Cost Index 2012," which ranks the states and the District of Columbia on public policy measures that impact the costs of health-care and health-insurance coverage. Here are the ten best states for health-care policy cost, according to this year's study.
The SBE Council's index ranks the states according to eight policy measures that impact the cost of health-care for small businesses.
The first measure taken into account is Health Savings Accounts (HSA), or tax-free savings accounts that are owned and controlled by individuals. States that provided a tax deduction for individuals making contributions to HSAs or imposing no personal income tax receive a zero, while those that don’t provide a deduction receive a one. Iowa received a zero.
These two states tied for the third-place spot. Another measure the index weighs is Guaranteed Issue for Self-Employeed Group of One (GI/SE), meaning individuals may not be turned down for health insurance coverage, no matter the condition of their health or risk status. A GI mandate raises health-care costs for the self-employeed, in this case, the study said. States with GI scored a one, and those not imposing a GI scored a zero. Both states here received zeroes on this measure.
Community Rating for Small Group Market (CR/SG) mandates that an insurer charge the same price for everyone in a defined region, regardless of their varying health care risks. Everyone would pay the same price for coverage. The index rated states imposing rate bands with a score of 0.33; states imposing adjusted community rating with a score of 0.66; states imposing pure community rating with a score of one, and a states not imposing community rating with a score of zero. Nebraska received a .033 score on this measure.
The index also measured Guaranteed Issue for Individual Market (GI/Ind.), which means that people may not be turned down for health insurance no matter their condition, health or risk status. If there is an imposed state mandate for GI in the individual market the state scored a one, for some imposed products states scored .5, and states without an imposed mandate scored a zero. For this measure Utah received a zero.
Community Rating for Individual Market (CR/Ind.) was also measured for the index. This mandates an insurer charge the same price for everyone regardless of health risks. If the state imposes rate bands, it scored a .33; those that impose adjusted CR scored .66; states imposing pure community ratings scored a one and those without a community rating mandate imposed scored zero. Wyoming scored a zero for this mandate.
The next measure in the index is State High-Risk Pools (HRP). For those that cannot get health coverage due to pre-existing conditions, some states set up these HRPs. States with these pools scored zeroes and states without HRPs scored one. Montana does not implement such pools and scored a zero for this measure.
The SBE Council also measured the number of mandates. Beyond regulations like GI and CR, state laws impose a host of mandated benefits on insurers. These carry sometimes significant costs, the survey said. Each state was given a score of 0.05 for each mandate it imposes. Alabama scored a .95 on this measure.
No. 9: Wisconsin. Per capita Medicaid spending is measured, because it is a significant cost for tax payers, the survey found. The measurement of this was per capita Medicaid expenditures. Wisconsin scored a 0.99 for Medicaid spending.
North Dakota rounds out the top ten best states. Overall, this state received a 3.08 score in the index ranking.
Here are the SBE Council's top ten best states for health-care policy costs.