Do Free Contraceptives Pay for Themselves?
Ben Smith quotes a study (PDF) from the Business Group on Health which argues that “Unintended pregnancies result in substantial excess direct medical claims costs and indirect costs such as disability, employee replacement costs, lost productivity, and presenteeism.”
The point here is simple. While birth control costs more than nothing, it costs less than an abortion and much less than having a baby. From a social point of view, unless we’re not going to subsidize consumption of health care services at all (which would be a really drastic change from the status quo) then it makes a ton of sense to heavily subsidize contraceptives…But just on the dollars and cents subsidizing birth control is a no-brainer.
They may pay for themselves. That’s not a reason for the government to get involved.
Really? ObamaCare mandates higher premiums for younger people so that older people can pay lower ones. Not to mention the intergenerational shifts implicit in Social Security, Medicare, and Medicaid.
And if women of childbearing age are such a drag on employers and the economy when they have children, perhaps we should enhance efficiency by reconsidering laws that make employers hire such drags on productivity.
Want to reconsider that cost benefit analysis looking at the lost revenues from the birth that was prevented? What happens when those intergenerational shifts don’t happen because policy focused on preventing births and, therefore, the next generation?
Time to get beyond the simplistic notion that people are a cost rather than a source of wealth.
Linda raises an interesting point on intergenerational shifts, etc.
It is possible, and perhaps likely, while costs associated with unintentional pregnancies probably would be greater in the first few decades following the pregnancy, in the long-term, that individual might contribute more production to society.
Too many unknown variables to know for sure, though, whether all of the births from unintended pregnancies at any given period would overall be economically beneficial. If we are living in a welfare state and the economy is sour in 20 years, it may not be.
I largely agree with Mr. Yglesias, Mr. Smith, and their sources. And the Guttmacher Institute’s review of the evidence on this question (http://www.guttmacher.org/pubs/CPSW-testimony.pdf).
And I’ll admit that “society” will bear the cost of unintended pregnancies.
Nevertheless, there are at least two questions not addressed by the originally proposed regulation.
First, according to the research, contraceptive coverage “pays for itself” many times over – which is why about 9 out of 10 plans already offer it, even without a mandate (although there has been co-pays). So, the real goal of the proposed regulation was not to create a new benefit, but to specifically rope in some plans offered by Catholic employers that do not already conform to the norm. In other words, Catholic institutions were not caught in the cross-fire. They are the exclusive target.
To make a practical case for the mandate, you’d need to show evidence that unintended pregnancies occurring amongst the women covered by such Catholic employers’ plans are putting an undue burden on society – more than other women are.
The evidence cited makes no such case: It refers to what happens when Medicaid or private insurance offers coverage, i.e. longitudinal observation. It does not cite cross-sectional analysis of Catholic plans versus non-Catholic plans.
(Please don’t come back to me with the data that Catholic women have more abortions than non-Catholic women. We do not know what types of plans covered these women.)
Second, contraception pays for itself “many times over” only in an environment in which third-party payers must comply with a maternity mandate. In a well-functioning health insurance market, the costs of normal pregnancy and childbirth likely would not be covered by insurance. Only if the physician decided that there was something wrong would the insurance kick in.
This would motivate people to “space” their pregnancies properly (because they’d budget for them), and would therefore be more likely to buy contraceptives out of pocket.
(Not to get too social conservative, but I remember my grandparents telling me that in the old days, a young man did not propose marriage until he was pretty confident that his trade would earn enough income to raise a family. Neither he nor the young woman thought they had a “right” to have babies paid for by someone else.)
As John Graham said, many insurers already cover contraceptives – those that do probably decided it’s in their best interest (insurers are pretty good at calculating cost/benefit ratios when deciding which benefits to offer). However, I don’t really consider it fair to spread the cost to groups who are not likely to generate claims for unplanned pregnancies. For instance, Catholic priests rarely bear or father children. Why should they cross-subsidize women or couples at risk of pregnancy?
Free copy of the actual study of the cost savings of contraception from NIH.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1615115/
The important issue to look at here is why a government thinks they have a role in determining if and when contraception should be provided.
If they pay for themselves then let insurance companies all provide them for free, or even let the taxpayers pay for it, at the state level. Since “the pill” isn’t one of the few and defined powers of the Federal Government, it would have to be States. If the voters of a State want free birth control for all, so be it, that is democracy.
However, that is a far cry from the federal government mandating a private religious institution provide a service that goes against 2,000 years of teaching. Catholicism is no weird niche or made-up religion, it is about as legitimate as they come.
As an atheist I do not believe in a god, but I believe in the First Amendment, and Obama’s mandate so obviously breaks it. Is the First Amendment inconvenient? Frequently, and I like it that way. Better inconvenient than irrelevant. First they came for the Catholics… well, I’m speaking up. The freedom of religion certain outweighs the “Freedom for you to have free birth control paid for by your private religious employer.” Which is apparently part of the Constitution too, or at least all these idiot liberals I keep seeing on TV must think so. I sometimes think they have a secret Constitution they won’t tell us about, maybe this is the 133rd Amendment to that one.
I would go further and argue that in a free country the federal government has no business putting any coverage mandate on a private business. Alas, and most regretfully, the founders did not feel the need to codify economic freedoms as literally into the Bill of Rights, however, religious groups do have their hall pass.
If a woman working for one of these institutions wants birth control, she has a job, she can go buy it, or go get it for free from one of many organizations. She does not have the “right” to have the federal government force her employer through the threat of force to give it to her for free. That kind of entitlement mindset is what is wrong with America, and the intellectually bankrupt left.
Then there is the newly found authority of the Federal Government to demand that a private company give away a product (contraceptives). The insurance company incurs the cost, but is forbidden from charging a premium or co-pay. It matters not that on the whole contraception is cheaper than prenatal, neonatal or delivery costs. The only certainty is that the drugs have a cost and that cost is not recoverable. The termination of the pregnancy may or may not be the liability of the insurer (some abortions may be privately funded; a normal delivery via midwife may not incur reimbursable costs). What product will be next on the give-away list?
There is the matter of the costs of abortion, child birth, and the cost of raising a child. Which of course it seems more feasible to provide funds for contraceptives vs the previous three things named. Also, I take in consideration the quality of life that child will have if born, and statistics that show when children are born into this class they continue this cycle. Hopefully providing contraceptives will show a decrease in the need for abortions, lower the number of unplanned pregnancies (especially of those who are more likely to depend on gov services for their livelihood), and decrease the number of tax dollards being spent by us to help others raise their children. I’m praying it turns out to be more of a positive than a negative. Besides, I’m starting to feel as if my money is used towards alot of things I disagree with, at least I can see some light at the end of the tunnel in reference to this plan.
The problem for society is all the cost associated with the people, therefore if we just had absolute birth control eventually society’s problems and costs would go away.
Did I get that right?
I haven’t read the study that finds free contraceptives pay for themselves — so I’m just playing Devil’s advocate. However, I wonder if oral contraceptives really do pay for themselves. It’s probably safe to say that generic versions of The Pill are more likely to have a negative cost than name brand versions. However, there are few drug therapies (or any other medical interventions) that are actually money saving (which is not to say they aren’t sometimes a good value). The problem is one that plagues many other interventions: you have to treat a lot of people who would never have caused a problem to affect a change in the very small number of people who would have caused a problem. With respect to free contraceptives, you have to compare marginal cost (the cost of providing free contraceptives to the entire populations of enrollees who want them) versus the marginal cost of the very few women who would become pregnant without getting birth control for free. Presumably, because of the immense cost of labor & delivery, the very few women who would become pregnant offsets the many women who would take advantage of free birth control.
National Review made the point back in August that subsidized birth control does not necessarily lower unintended pregnancies: “Although the Medicaid population made up only 18.92 percent of New Yorkers in 2009, they had 39.75 percent of abortions. This lends pause to the notion that eliminating co-pays will have any constructive effect on preventing unwanted pregnancies.”
http://www.nationalreview.com/articles/274374/free-birth-control-all-deroy-murdock
In the end, the dollars-and-cents point is moot if National Review is right.