Peter Daniel: Government mandates are driving up healthcare costs in NC

Peter Daniel: Government mandates are driving up healthcare costs in NC

Published 12:00 am Sunday, February 2, 2025

By Post Opinion

By Peter Daniel

According to Forbes, North Carolina employers and families pay more for health care in this state than any other state in the country. Which is to say, when it comes to health care, North Carolina is the most expensive state in the most expensive country in the world.

Who pays all that money? Businesses, families and taxpayers. Of the non-government-sponsored health insurance policies in North Carolina, 87 percent are funded by employers.

Where does that money go? Health care providers, who decide what to charge for medical procedures and visits.

Businesses hire health insurance companies to administer employee benefits and to try to contain costs to the extent possible. But just like other insurance products, health insurance premiums depend almost entirely on how much providers charge for their services.

Knowing all this, I've been surprised to see free-market voices claim new government mandates on health insurance companies would somehow lower health costs. North Carolina already has the highest health care costs in the country because state law favors providers via mandated coverage benefits. More government intervention is the very practice that pushed North Carolina's health costs higher than any other state in the union to begin with.

Health insurance companies need the legislature to give them more tools to reign in North Carolina's out-of-control health prices. They don't need government prohibiting them from using the few tools still available to them right now.

It would serve everyone better if provider associations like the Medical Society would sit down and collaborate on meaningful regulatory reform to a broken system rather than constantly calling on members of the General Assembly to choose between mandates that benefit special interest groups and reasonable health insurance premiums for businesses and taxpayers, and ultimately for the citizens of our great state.

Last year's House Bill 649 is an example of a mandate that does not guarantee any cost-savings for patients and does more harm than good, which is why both I and the Affordable Healthcare Coalition of NC have opposed it in these very pages.

About one-quarter of all health spending in the U.S. — close to $1 trillion every year — is pure waste: unnecessary treatments, low-value care, fraud, and more. House Bill 649 would, by government order, gut one of the main tools health insurers use to prevent waste from happening, and therefore lower costs.

A health care system in which nobody guards against unnecessary or even fraudulent billing would be like the Wild West. I don't know exactly how it would end, but it certainly would not lower health costs.

Most would agree that North Carolina's label — the most expensive state for health care in the most expensive country for health care in the world — needs to change. We rightfully pride ourselves on massive economic development wins, based in part on an enviable tax and regulatory environment.

Oppressive health costs threaten to neuter those policies, and they may do so faster than most of us think. North Carolina's General Assembly needs health care regulatory reform now.

Government mandates like in HB 649 increase the cost of health care and simply shift money to the pockets of special interest groups, rather than guaranteeing a reduction in costs for business and patients, which in turn increases the cost of insurance premiums. This ever-increasing volume of government mandates is draining money from North Carolina families and businesses, and sapping up North Carolina's competitive advantages.

Instead of top-down mandates, the state should encourage the use of existing tools like value-based arrangements and the sharing of data by providers. Nothing prohibits providers and insurers from entering these agreements, which can include waivers for prior authorization and other utilization management tools if providers consistently meet quality goals and cost controls. Providers stand to earn more from these arrangements as a partner with insurers in the health outcome of patients.

The NCAHP remains willing to work with other associations and the General Assembly to address health care cost drivers.

Peter T. Daniel is the executive director of the NC Association of Health Plans, Inc.