Elizabeth Nolan Brown // Blog

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If Free Birth Control Lowers Costs, Why Haven’t Insurers Made Birth Control Free Already?

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That’s a question I’ve seen a few places, and which Conor Friedersdorf posed to me last week in  a bloggingheads dialogue. At the time I didn’t have an answer. I knew that birch control coverage could save money and I had some facts and figures about it. But if it drove down costs, why didn’t insurers already subsidize contraception?

One commenter at bloggingheads described my position as “let’s subsidize everything less dumb than the dumbest thing we subsidize,” which I liked. The fact that contraceptive services benefit more individuals or could drive down costs more (in terms of pregnancies prevented) than some of the other preventative services that are free under the new healthcare mandate was my rationale for including birth control (I’m a realist; my view is generally if this mandate exists—and it does—then what makes the most sense under it?) But dumb isn’t really the criteria, I don’t think. More like, “Let’s subsidize everything that genuinely is a preventative service and also benefits a large swath of the American public if we’re going to subsidize other less commonly-utilized stuff. I could be convinced to take dumb stuff off the preventative services list. I’m not sure I support the preventative services mandate to begin with. But since that’s happening: Hell, yes, contraceptive services should be part of it.

Much is made of why totally free versus must-be-covered by insurers, but with a copay. The argument is why should middle- or upper-class women have birth control totally subsidized? The assumption being, of course, that ‘birth control’ means the pill, which generally costs between $4 and $30 a month for a copay, with standard employer-based health insurance.

But the free preventative ‘contraceptive services’ could also include more expensive, longer-form birth control options. The IUD lasts between 5-12 years, and is a great option for young women who don’t want kids for some time or women who’ve already had kids but are pre-menopausal. Insurers have been slow to start covering it, and it’s expensive without coverage (between $500 and $1,000, for the IUD and insertion). That’s actually quite cost-effective in the long-run: At $1,000, spread over 5 years, it would only amount to about $16 a month—right around the average monthly oral contraceptive copay. But $1,000 is a lot of upfront cost, and that’s a big reason why women don’t choose this very effective birth control option.

Another very effective birth control option? Sterilization. It costs quite a lot up front if not covered by insurance. Which means it also costs quite a bit up front for the insurance company who’d have to subsidize it. But a woman who has her tubes tied or a man who has a vasectomy can cost less over a lifespan, because they’re not using birth control monthly and they wont’ get pregnant and need pre-natal and maternity care or an abortion. [And these are just the health care costs saved; less unwanted pregnancies brings less poverty, less unwanted societal costs, etc.]

So if this is all such a great deal for insurers, why haven’t they done it already?

Here’s my stab at a theory. The reason insurers haven’t already started offering free contraceptive services, if this drive down costs, is because with employer-based healthcare and folks jumping jobs so much these days, most people only have the same insurance company or plan for a few years. Subsidizing contraceptive services might drive down costs for you (relative to pregnancy or abortion), and in doing so drive down overall health care expenses in this country. It could drive down social costs. But it’s unlikely to substantially improve the bottom line of any particular health insurance company.

Of course, with the way the insurance market works, wouldn’t any given plan be just as likely to have people currently using free contraceptive services, thus driving up costs, and people who’d already benefited from contraceptive services, thus driving down costs? I don’t know. I’m not terribly well-versed in the economics of insurance policies and risk pooling. Maybe any particular insurance company is likely to have a net draw in costs expended and saved by offering free birth control services.

There may be a simpler reason why insurance companies don’t subsidize birth control: Because it’s the way they’ve always done things. The upfront cost—even just in terms of the time of the people involved in doing it—of changing their policy probably wouldn’t outweigh the savings for a while. Or maybe they just figure that women who use birth control will do so regardless, and they might as well make that $12 co-pay each month from each of them. (The latter theory is maybe true now, but maybe less true once everyone must be insured? And also maybe not as relevant when you, again, consider that birth control doesn’t just mean the pill).

Another component of this I’ve written about recently and Conor and I talked about is the conscience mandate. In any discussion of whether religious employers should have to cover contraceptive services, I feel it’s important to note: People use the pill for things other than pregnancy prevention (thanks, Erin, for reminding me of this). A Guttmacher Institute study found 14% of all birth control users rely on the pill solely for non-contraceptive reasons, such as reducing menstrual pain, treating acne or trying to tame irregular periods.

Churches are already exempt from the contraception mandate, but religious employers—like hospitals and universities—want to be able to (and can, now) opt out of covering contraception. And everyone’s framing it like a matter of choice—well, you choose to go to a religious school, or you choose to work for a religiously-affiliated employer. If covered/free contraption was so important to you, you could choose to go to school or work elsewhere (nevermind for now that just going to work elsewhere sometimes really isn’t that simple).

But I think framing it in terms of individual choice is a bad idea; it’s about whether a broad-spectrum of individual employers should be able to opt out of insurance coverage mandates they don’t like. I don’t think they should. Right now, we’re talking contraception, but it opens the door for any employer to opt out any insurance coverage requirements they don’t like.

Please note that this post is less a polemic and more a sort of stream-of-consciousness grappling with thoughts surrounding this issue. It’s a complicated issue. Do share your thoughts with me, too.

ALSO: …
Yes, yes, 1,000 times yes.

Of course access to affordable birth control is primarily a woman’s problem, but how many men have not had babies they didn’t want because the women they were sleeping with were on birth control? Contraception is something that benefits both women and men. Phoebe’s totally right that most men don’t have any idea about how birth control works, and it’s just … sad, and stupid. But I am happy to report that I had a lovely discussion about the benefits of IUDs and the drawbacks of the pill with three women and one man at the bar last night. Anyway, I’ll leave you with Phoebe:

Precisely because contraception is oh-so-private, misconceptions arise – especially, needless to say, among men – about what this “birth control” thing is all about. They easily forget that the very need for contraception comes from women having sex with men. Sparing these men – I might add – 18 years of child-support payments, not to mention the serious possibility of 18 years of continued communications with every woman they’ve ever slept with. It becomes a discussion about women choosing to have sex, when the sex in question by definition involves men. Not such an issue for women who have sex with women.

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Written by Elizabeth

March 6, 2012 at 7:08 pm

One Response

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  1. Nice post!

    I haven’t looked at this issue directly but I would speculate that it might have a lot to do with cherry picking patients that aren’t going to have high costs in the future. If you are the only plan in town that offers free contraceptives you are going to attract a lot of young women in their child bearing years. These are the most expensive patients to have on your panel, besides sick old people, because they eventually get married and go off their contraceptives, incurring a lot of obstetric expenses. You don’t want a lot of these women on your plan because then you are going to have to have higher premiums than the plans in town that don’t have free contraceptives.

    So the added expenses may not come from the plan themselves, but from having a patient mix that costs more.

    The mandate makes all plans equal, so they can offer contraceptive coverage without attracting patients that will have a lot of costs.

    A similar idea comes from health plans offering gym memberships. Having gym memberships doesn’t really make you healthier enough to lower you expenses. But who joins a plan that has gym memberships? Healthy people who go to the gym! Not sick old people.

    Michele

    March 11, 2012 at 3:08 pm


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