This is the Cato Daily Podcast for Tuesday, February 19th, 2008. I'm Caleb Brown.

How should states proceed in making health insurance and more importantly health care more affordable?

Michael Cannon, the Director of Health Policy Studies at the Cato Institute, offers a few thoughts.

In the past few years, states have had to grapple with rising health insurance costs.

How have they generally been trying to address it?

Not very well.

The primary strategy has been to try to subsidize health insurance, to throw more money at

the problem.

And that's typically subsidies through each state's Medicaid program or S-CHIP.

And I think that's really adding more fuel to the fire.

What states should be doing is taking a hard look at how they contribute to the high cost of health insurance.

States do that primarily through laws that require consumers to purchase specific types of insurance coverage,

and also laws that restrict the

insurance

price insurance according to health risk.

What is the evidence that specific mandates

have any impact on price in the health insurance market?

Well, there is some evidence and it suggests that the effect is not overwhelming, but

it's substantial.

The Congressional Budget Office is estimated that state health insurance mandates

increase the cost of health insurance by 15% on average

which can be a substantial deterrent, I think, for a lot of people to purchase coverage.

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