No, we don’t need new occupational licenses just for insurance reimbursement

My research update this week takes a look at a fast-growing problem pushing state lawmakers to consider occupational licensing for more professions. Since gaining control of the General Assembly in 2011, Republicans have mostly resisted expanding state licensing. In contrast, during the licensing explosion from 1967 to 2010, the General Assembly (under Democratic control) was essentially creating a new occupational license every seven months.

This year, however, they have passed a new, separate license for nutritionists (split off from the dietitian/nutritionist license) and set in motion a study for creating a license for naturopathic doctors.

So what’s going on? I explain:

Naturopathy is one of several medical practices … not in the mainstream of medical care, and as such, not receiving medical insurance reimbursement for provision of their services. Having their scope of practice defined and occupation licensed by the state would open practitioners to receiving insurance reimbursement and presumably broaden their consumer base. Other, recent practices in the same reimbursement boat include behavioral analysts, music therapists, and also nutritionists ….

The occupational license isn’t to protect the health and safety of consumers, it is to make the practice eligible to receive medical insurance reimbursement.

That simply is not a demonstrably necessary reason to impose the extremely limiting regulation of requiring an occupational license.

This problem promises to continue, and lawmakers will need to find a better answer for it than licensing. Read my research brief for a model proposal to address both sides of the issue: a specialty license for medical reimbursement that would not rise to the level of occupational licensing.

A specialty license would be a credential from the state on the basis of meeting certain qualifications (the most obvious being certification from a professional certification agency in the field) — but it would not prevent practitioners without that credential from practicing, just from qualifying for insurance reimbursement

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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