Lessons from Car Insurance Mandates for the Candidates

Wednesday, February 27, 2008 | Margy's Blog & Updates

Senators Clinton and Obama are continuing the debate over how best to ensure that everyone has health insurance and access to care.

Some online analysts have raised questions about the effectiveness of mandates by reviewing car insurance mandates.

We have been spending some time looking at access to car insurance in our transportation research.

Car insurance is regulated by states. Only two states do not require drivers to maintain insurance – New Hampshire and Wisconsin. Yet, a recent report finds that nearly 15 percent of drivers across the nation are uninsured.

What happens in the two states without a mandate?

Wisconsin ranks 20th with about 14 percent uninsured, while New Hampshire has one of the lowest rates of all states at 9 percent. Other state rates range from 26 percent (Mississippi) to 4 percent (Maine).

Some writers have noted that California has a low-cost insurance option for low-wage workers. In that state, these writers point out, the uninsured rate is one of the highest at 25%.

We’ve interviewed some of the key actors implementing the California low-cost insurance option and find that there is a major problem with outreach and access. Most low-wage workers probably don’t even know about the option and the incentives don’t seem to be structured in a way that encourages brokers to sell it.

A number of people are working on improving knowledge and use of the low-cost option in California, but we should not assume that low-wage drivers wouldn’t buy it—-if they knew about it.

So, what do we know? A mandate does not guarantee universal coverage in this case. And creating and implementing a lower-cost insurance option for low-wage workers will require creativity, careful implementation, and outreach.

Comments