Covering Contraceptives

The recent discussions of health insurance coverage for contraceptives have prompted me to take a look at a question I hadn't thought about in years. I have been vaguely aware that some paid prescription plans covered contraceptives and others did not. Recently the Obama Administration attracted attention by declining to allow exemptions, for reasons of religious objection, to the requirement in the Affordable Care Act that FDA-approved contraceptives be covered by health insurance policies without cost sharing.

At first I was intrigued by the subject because it appeared to raise an issue of constitutional law. Was refusing to allow a religious exemption a violation of First Amendment protections of religious liberty? First Amendment jurisprudence is both fascinating and daunting because there is so much case law. You cannot simply read the text and have a complete understanding of religious liberty in the United States. The plain language is very brief and very simple: "Congress shall make no law respecting an establishment of religion, or the free exercise thereof...." This simple text has been the subject of interpretation in many federal court cases over the past two centuries, a review of which is, I can safely say, far beyond the scope of an essay for this blog. Suffice it to say that "the free exercise" of religion is at the core of quite a few such cases.

A young law student attends a Jesuit university, and the health insurance provided by that university does not cover contraceptives. Many other universities not only cover prescription contraceptives but provide them to students at subsidized prices. Is this a matter of the free exercise of religion? I suppose the Jesuits think it is. I find myself inclined to agree with them, but then I am also sympathetic to the argument that employers will opt for coverage that does not include contraception for purely economic reasons (in other words, they're cheap) while claiming religious objection (maybe the company's owners are Catholics who assert their belief in Church doctrine). I am having trouble making up my mind about this, which is, I think, a good thing, given the complexity of the issue. But it would surprise me not at all if the Supreme Court were to say this provision of the Affordable Care Act is on the wrong side of the First Amendment.

Then I began to wonder about the economics of health insurance coverage for contraception. When I try to make sense of something complicated, I often resort to analogy. My employer offers vision care insurance as a stand-alone policy. That makes it very easy for the employee to evaluate its worth for the individual or the family. How much does the coverage cost? How much do we spend on vision care? Let's see: eye exams, glasses, contact lenses. It's not hard to do the arithmetic and come up with an estimate of whether the premiums are worth it.

Then I stopped and thought about it. Vision care insurance is not really insurance at all. Insurance is a way of pooling risk to protect against large losses that the individual cannot readily afford. So I have insurance on my car, because owning and operating a car presents some risks that I cannot readily afford, including expensive collision repairs, replacing the vehicle in the event of a serious crash or theft, or - and this is the really large risk - being held liable for personal injury to another person harmed in a crash.

Routine vision care provided by my optometrist isn't like that at all. I can certainly afford it. But my employer subsidizes the premium cost (which is why it's called a "benefit"), and my share of the premium is a good deal relative to the amount by which it reduces my out-of-pocket expenditures.

So what about contraception? Would I pay for coverage? Of course not. I don't use it. And even if I did, I'm not sure it would be a good deal. That's because it would probably be priced to offset the cost of the most expensive options, while my preference might be for something much cheaper. The expensive options are some of the higher-priced birth control pills, which can run $3 a day. But there are also BCPs that cost about one dollar a day, and other methods may be much cheaper. The long-term cost of an intrauterine device (IUD) is much less. An old-fashioned method, not very popular nowadays, the diaphragm, is highly effective when used properly, carries none of the risks associated with hormonal contraception, and is very cheap.

But coverage for birth control is not sold separately. It is included - or not - in health insurance policies that are primarily intended to protect us from high-dollar risks. Anyone who has ever had to receive inpatient care in a hospital or any kind of surgery or high-tech testing knows about that.

So I'm trying to make an economic case for including contraceptive coverage in health insurance. I can see the utility in including it for poor women on Medicaid, because the price may be an obstacle for them if they have to pay out of pocket. (Yes, I know, even the most expensive BCPs are cheaper than the pack-a-day cigarette habit many of them have, but they are addicted to nicotine, so they are not going to stop smoking to save the money to buy BCPs, even though a woman should not smoke and take the pill because of the risk of stroke and blood clots in the lungs).

But for women who can afford contraceptives, even if it means choosing one of the less expensive options, what is the economic argument for covering it through health insurance? All that does is drive up the cost, because the prescription plan administrator has overhead to cover and a profit to make. Not only that, but when a subscriber's out-of-pocket cost is just a co-pay, the high prices of some BCPs don't produce sticker shock, and that makes it easier for the manufacturers to charge much higher prices than they otherwise would. All in all, this seems a bad deal.

I suppose some will make the argument that unless contraception is provided "free" - see the words "without cost sharing" at the end of the first paragraph - some women will go without, which will increase the number of unwanted pregnancies. That, in turn, will increase either the number of abortions or the number of unwanted children, both unfortunate consequences. I imagine there are some public health researchers who have gathered empiric data and can tell us whether this intuitive assumption is correct. I imagine they can also provide an economic analysis comparing the cost of making contraception "free" with the cost burden of unwanted children growing up in families relying on government assistance for subsistence.

All of that makes my head hurt, because it brings us around to the subject of personal responsibility (or lack thereof) and the poor life choices so many people insist on making. Too bad there is no way to fix that. It's also too bad that, one way or another, we all wind up paying for it.