Opponents of health reform argue that progressive proposals would require everyone to purchase Cadillac health insurance plans and drive-up the costs of insurance. As health care crisis denier Sally Pipes pronounced during a recent Congressional hearing, “because a young man of 30 wants to get a high deductible plan, Why should he pay $12 to $15 thousand to cover my in vitro fertilization?”

Well, as the New America Foundation’s Len Nichols explained during today’s HELP committee hearing, Pipe’s in vitro fertilization (which only 13 states cover) — or other so-called benefit mandates — has little impact on the price of health care coverage:

Benefit mandates don’t really add that much to costs, the serious econometric work that is in my profession suggests three to five percent, the CBO has concluded that. The state of Texas’ Department of Insurance, not a noted left-wing organization, concluded 3 percent in the state of Texas…The reason those econometric studies find that there is very little specific next impact of specific benefit mandates because they compare the small group hubs, where those things are relevant to the large group hubs. The large group hubs are uniformly more generous,and yet they have lower costs. So let’s ask ourselves, how do they do that?

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Indeed, according to state experiences and an exhaustive study by the Congressional Budget Office, “eliminating some of the most expensive mandates — maternity, mental health, and preventive care for children — would bring” only a small reduction to health care premiums. The CBO report found that “the impact in the small group market is no more than five percent of premiums” while California’s Health Benefit Review Program “determined that eliminating all 44 of California’s mandates would reduce premiums by no more than 4.8 percent.”

“The point is this,” Nichols says, “how we pay for and manage care is far more important than the benefits that are covered.” Large employers are able to use their buying power to offer more substantive coverage and bargain for better rates. Conservatives, however, misdiagnose the cause of rising health care costs and typically propose breaking-up large purchasing pools and pushing individuals into bare bone policies on the individual market.

As Nichols explains, to lower health care costs, we need to move in the opposite direction and “extend that bargaining power and that information, that utilization potential to all of us, not just some of us.”

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When the uninsured cannot pay for the care they receive, providers shift costs to Americans with insurance in the form of higher premiums. A 2005 analysis by Families USA concluded that “in 2005, premium costs for family health insurance coverage provided by private employers will include an extra $922 in premiums due to the cost of care for the uninsured.”

Today, an updated analysis by Ben Furnas and Peter Harbage concludes that a failure to continuously cover all Americans accounts “for roughly 8 percent of the average health insurance premium“:

This cost-shift amounts to $1,100 per average family premium in 2009 and $410 per average individual premium. By 2013, assuming the cost shift remains the same percentage of premium costs, the cost shift will be approximately $480 for an individual policy and $1,300 for a family policy.

So in other words, the uninsured matter to the insured, and the latter would be well served to eliminate the former. Read the full report here.