Mandated hearing aid benefit for Massachusetts children: Sounds like a good idea to me

Health care reform opponents hate the idea of mandated benefits. From a free market purist’s standpoint it’s a bad idea to tell health insurers what they need to include in their products because it will tend to drive up costs and interfere with the ability of suppliers to meet market demand. This opposition to mandated benefits is a major reason that so many in the GOP are enamored of the idea of allowing health plans to sell policies across state lines.

As someone with an undergraduate degree in economics and an MBA, I really and truly do understand this free market argument and am sympathetic to it. But it’s important to take more than free market orthodoxy into account when making policy decisions.

Let’s take a look at a bill before the Massachusetts legislature that would mandate health plans to include coverage for hearing aids and related services for children 21 and under. A free market purist might attack the mandate on the following grounds, among others:

  • It forces people who don’t have children, or who have children with normal hearing, to buy a benefit they don’t want or need, driving up premiums
  • A provision like this retards innovation and boosts costs by keeping hearing aids within the realm of regulated medical devices and discouraging the development of low-cost consumer electronics solutions

Those arguments have some truth to them. But I find the counterarguments more persuasive:

  • An actuarial analysis by Compass Health Analytics indicates that the mandate will increase premiums by about 0.008 percent or about 4 cents per member per month. That’s about the cost of one postage stamp per member per year. So in practice the mandate does not drive up premiums, and even a dozen mandates like this one would have no real impact
  • Hearing aids work. They improve quality of life and they make it easier for children to develop their brains and to learn in school. Having access to hearing aids promotes equality of opportunity. The evidence on the specific economic impact of hearing aids is hard to pin down (especially¬†because¬†doing a controlled trial where some kids are denied access would be unethical) but in general investments in youth that enable them to learn better have a terrific societal return on investment

I will gladly trade off a tiny bit of economic purity for a real gain in equality of opportunity and the potential for a meaningful pay-off in societal wealth in the long-term.

July 13, 2012

6 thoughts on “Mandated hearing aid benefit for Massachusetts children: Sounds like a good idea to me”

  1. Please dispel the myth that selling health insurance across state lines is actually a solution for competition.

    All states have their own individual rules for insurance. A plan in one state may violate laws in another state.

    Nationwide carriers already operate in all 50 states to offer state specific health insurance.

    Some plans contract with facilities that are only available in the particular state or region.

    Regional health insurance carriers would not be interested in selling across state lines because they contract with specific facilities and would not be able to support the plan member.

  2. Thank you Mr. Williams for your assessment of the H.52. The impact of early access to sound through hearing aids (ideally immediately following diagnosis) is undeniable from a social/emotional, developmental, communicative and academic perspective. Hearing aids are not cosmetic but are assistive devices based on medical necessity.
    As of today, 19 states mandate some coverage for hearing aids. We hope Massachusetts will be the 20th (as well as the final New England state) with the passing of House Bill 52 focusing on pediatric coverage at this time.

  3. Thank you for agreeing that this is a worthwhile bill. I recently had a son who was born with a severe hearing loss. Unknown to my husband and I, his hearing loss is genetic. No one in either of our families have a history of hearing loss so this came as quite a shock to us. We love our son no matter what but hearing aids are really expensive. I know from experience that they work, you can completely see a difference in my son when he is wearing his hearing aids and when he is not. He is only 8 months old and he is developing wonderfuly. We are going to learn sign language as well but that takes time for us to learn and in these critical first months, all the learing he is doing is by seeing and hearing us. Without hearing aids this wouldnt be possible. I feel fortunate enough that my husband and I with some help were able are able to provide hearing aids to my son. There are a lot of people out there that arent as fortunate! Please help this bill pass so other children can get the hearing aids that they need! A price of a stamp a year is well worth the developement of a child!

  4. As a parent of a three month old who has been diagnosed with bilateral moderate hearing loss, I was shocked to learn that hearing aids are not covered by the majority of health insurance plans. Cochlear implants are covered, all the diagnostic work is covered, but the aids aren’t. It’s backwards and this is a situation where the people need to step up and let the insurance companies know that this is not ok. Thanks for sharing.

Leave a Reply

Your email address will not be published. Required fields are marked *