How can certain employers complain that they’re being forced to pay for contraceptive coverage in their employees’ health plans? that:
A) The mandate is that insurance companies provide the coverage for no additional cost.
B) Birth control doesn’t cost money, it saves money. If company makes it easier for women to get contraceptives then the result will be lower costs for prenatal and maternity care, if anything resulting in lower costs to employers.
Isn’t that the reason that insurance companies aren’t the ones doing all the complaining here?
Well, yes, in the long run, birth control saves money, for just the reason you said. But, in the short term, birth control costs money, because, well, it costs money. The employers/insurers are banking on their customers using birth control either way, but paying for it out of pocket.
Long run? When a population of women begin using birth control, the savings begin piling up very quickly. Long run or short run, saving money is the opposite of costing money.
More specifically, employers are not paying for BC out of pocket, are they? Insurance companies have enough money to pay for it that they don’t have to charge additional premiums.
And the “long run” is what insurance is all about. If an IC thinks your going to cost them money in the long run, they’ll charge you more now. If they think you’ll save them money, they’ll charge you less.
You’re right but your missing the point. What the Catholics want is to be able to have insurance that pays for child birth but doesn’t pay for birth control. This will overall increase the cost of the insurance but that’s not this issue. The issue is preventing the use of birth control.
Its like telling your kids that you will buy their meal but won’t pay for candy, even though a meal entirely made up of candy would be cheaper for you.
Because birth control is a product (pill or otherwise) that has to be produced, which incurs cost. You can’t give away birth control for free because whoever produces the birth control won’t be reimbursed for their efforts. However, if it’s covered by insurance, the same company that would pay for childbirth also pays for the birth control, which leads to a cost savings.
Basically yes. It is for that reason (and that reason only) that the Insurance Company Controlled-Obama Administration is “forcing” insurers to pay for it out of pocket for employees of religiously affiliated organizations.
But this conversation was never about contraceptives per se. Catholic Bishops’ view of religious liberty is that they get assured that their employees have to at least take a monetary loss if they want to violate the Bishops’ point of view.
I wasn’t asking why it’s not free. I was asking why one would insure against something that saves money. I.e., why the OP’s argument wouldn’t apply to consumers of birth control.
All insurance should save money, otherwise there’d be no point. When the insurance company’s intake exceeds their obligations, funds can be invested to earn interest, so that future obligations can be covered without raising rates. Though health “insurance” really is a curious beast.
Because if childbirth is covered and birth control isn’t birth control does not save money for the insured. If you had to pay the hospital bill for childbirth on your own it would be a different matter.
In recent years my insurance has started covering preventative visits at 100% even when visits due to sickness weren’t, so insurers are quite aware prevention saves money.
Here is a study on what occurs when you raise the price of the pill (pdF)
The findings were that the number of accidental pregancies was not affected. Women just used other forms of birth control and had less sex.
Given that their are some cheap ways of preventing pregnancies other than the pill it is probable that paying for birth control will not pay for itself but instead cause women who are using other forms to switch to pills. Given that the cheapest alternatives (condoms) also prevent STDs while the pill does not it may even be that providing the pill for no additional cost will make other expenses rise as well.
What? Insurance always costs more than the benefits. The point is to pool risks. I like paying home insurance and getting nothing back, it’s better than having your house burned down even if you are reimbursed, which is very much better than having your house burned down and losing everything.
The insurance companies are the ones doing the complaining.
I’ll use the real life example of my company (big employer, tens of thousands of employees). I’ve changed the numbers, but everything is more or less to scale. We are self insured, as are a large number of employers. We pay an insurance company to administer the plan, and a small premium to cover costs over $1M per employee. They pay out something like $300m in claims and we reimburse them for that and another $8m to administer the plan and for the >$1m insurance componenet. Much of that $8m is compensation for the “float”, compensation for the fact that they have to pay out money to providers an average of 30 days before we pay them. Another chunk is the actuarial premium on the >$1M coverage. The rest is the true admin cost.
If we were a covered religious organization, the insurance company would (per the White House characterization of the plan) have to pay out millions in contraceptive costs, and not pass this on to us, the employer. This would cause them to lose money right away, so they will then try to raise the “adminstrative” fee to cover the cost of the birth control. But that would be against the law, because that would be transparently making the employer pay for the conctraceptive costs.
To the extent that contraception actually lowers health care costs overall, the employer sees all the benefit, the insurer gets all the costs. Should they raise rates for other customers to cover the losses on the religious ones? They can’t because they would be priced out of that market right away.
This problem doesn’t really go away even if the employer is not self insured. As long as you have to offer a plan that is priced the same with and without contraception coverage, you are going to lose money on the one without contraception or be priced out of the market on the other. Because you can’t have co-pays or deductibles for contraception the share of the cost to the employer or insurer is disproportionately high. There has been a huge trend over the past couple of decades in moving costs from the employer/insurer to the “consumer”.
While contraception may have a net negative cost, a very high proportion of women will pay get it whether or not it is covered. That is because the medical costs of having children or abortion are the least of the costs involved. Most women have much more compelling reasons for avoiding pregnancy. If you have to pay 100% of the cost and 90% of the women would use it even if you did not pay for it, the net cost is not going to be negative. At least not to the people who are paying for it. If contraception costs $600 per year, the employer/insurer is paying $6000 for each of the 10% who wouldn’t otherwise use it. That’s a pretty big premium for avoiding the risk of pregnancy.
This is what happens when you try to shoehorn a Health Care plan into an Insurance model. It would be like making car insurers pay for tune-ups. Insurance is for things you can’t foresee. Pretty much every adult has to deal with contraceptives (usually falls on the women in our society, but them’s the breaks). Childbirth is something most people plan.
It’s like making dental insurance cover the cost of toothpaste and dental floss.
Having said that, I can see where insurers might give women a discount if they show that they are using contraception. Sorta like a safe driver discount. I’m not sure how that would actually work, since they wouldn’t be able to prove if a woman did or did not use contraception, but perhaps just good ol’ self interest would assure that most would, since few women want to just randomly get pregnant.
At any rate, the vast majority of women in this country can pay for contraception. Making it some national crusade to make sure they get it “for free” makes no sense to me. I have no problem subsidizing poor people who can’t afford it, but lumping it into “insurance” for middle class and wealthy people does’t compute.
If dental floss could only be purchased on prescription and cost $150 a roll. Unless you had insurance in which case it gets reduced to a $10 co-pay. But if you don’t have insurance, it gets reduced to $37.50 which you pay out of pocket.
But maybe you found generic dental floss that may cost $14.31 or $7.64 and you need to figure that before your card is run whether to bother even using insurance to purchase it.
Or maybe your insurance company doesn’t pay for your dental floss at all and you’ve got to go to Canada to get it. Or your pharmacist is an anti-dentite and doesn’t stock dental floss on moral grounds.
I agree with you that the whole system is ridiculous and that mixing health care and insurance leads to insane results. The problem is that, right now, that’s how our system is set up and we can’t just say “buy your own damn preventative maintenance care!” because the cost for individuals without insurance would be astronomical. The cost for those with insurance is just dealing with bureaucracy.
No, it wouldn’t be astronomical. You left out the part of my post where I addressed that. Birth control costs about $60/month. Most Americans can afford that. Many can’t, but when most people can afford something, why have the government give it out “for free”?
I don’t see why everyone thinks it’s so crazy for insurance companies to pay for routine preventive measures. If supplying the preventive measure cost less than the company would pay out in claims absent covering that procedure, then the insurance company would be blisteringly stupid not to pay for that “routine” procedure. I’m not saying that this calculus implies that it is necessarily economically rational to pay for birth control, but the simple fact that a procedure is “routine” is not a sufficient argument for insurance companies not to cover it.
