The economics of AIDS-related health insurance regulations: Interest group influence and ideology

The projected growth in the U.S. in the number of persons with AIDS has created concern about sources of financing the costs of health care services for persons with AIDS. Private health insurers have modified or considered modifying underwriting practices in response to the AIDS epidemic, but several state governments have developed significant regulatory constraints on AIDS-related underwriting practices. We model the state government's decision to impose AIDS-related regulatory constraints (HIV testing restrictions, restrictions on the use of information about sexual orientation, and mandated AIDS coverage). We find that HIV-testing restrictions tend to be more likely in states with relatively high AIDS prevalence rates and insurance industries that are relatively weak politically. States with prevailing attitudes favorable to persons with AIDS (i.e., relatively liberal states) are more likely than other states to impose HIV-testing restrictions. Measures of prevailing attitudes (ideology) appear to be the primary determinants of regulations prohibiting questions about sexual orientation, but economic interests are the primary determinants of mandated AIDS coverage.The authors would like to acknowledge the helpful comments and suggestions of Ned Becker, Janet Bronstein, David Colby, Patrick Donnelly, Roger Faith, Robert Hughes, Robert McGuire, Delfi Mondragón, Mike Morrisey, Jack Nelson and an anonymous reviewer, with the usual disclaimer.