POLITICS

Daily Contraception Mandate Lie: 'Free' pills

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Politics,Beltway Confidential,Timothy P. Carney

What's the ObamaCare contraception mandate about? For much of the media and many politicians, it's about "free contraception."

Just a very quick sampling: "The rule requires employers to provide free contraception to women" [Washington Post]; "receive free contraception in their health plans" [New York Times]; "free contraception coverage" [Washington Post/Religion News Service]; "cover free contraception" [Daily News], "free contraception coverage," [Daily News]; "health plans supply free contraceptives.." [Kaiser Health News].

But there's no such thing as a free birth control. Someone's paying for it.

Here's the step-by-step of the mandate for the plans to which it applies, which is nearly every employer-based plan:

Insurers are required to pay the cost of all birth-control pills, without copay. As the insurer's liability increases, the premium for the insurance plan increases. So employees pay higher premiums, as do employers. But because this plan applies to nearly all employers, the employers pass the cost onto employees in the form of lower pay.

So your pills are not "free." The cost isn't reduced to zero -- it's instead spread among all your employees, whether they be gay, infertile, male, observant Catholic, post-menopausal, chaste, pregnant, eager to have as many kids as possible, or Shakers.

Drive up demand for pills, and make that demand have no cost sensitivity, what do you think happens to the price of those pills? Avik Roy explains:

Under the new mandate, this price incentive disappears. Insurers will be required to pay for any and all oral contraceptives, without charging a co-pay, co-insurance, or a deductible. This "first dollar coverage" of oral contraception kills the incentive to shop based on price.

If history is any guide, this significant change will drive up the price of oral contraception. Today, Tri-Sprintec costs $9 a month. In 2020, don't be surprised if it costs $30. Drug companies will be able to market "branded" contraceptives at premium prices, knowing that women are free to choose the most expensive, designer product because it will cost them the same as the cheapest generic. Prepare yourself for multi-million-dollar Super Bowl ad campaigns from competing manufacturers.

So rather than "free contraception," we actually have more expensive contraception, just with the cost being shared, unwittingly, by people not using contraception. And this isn't about helping the poor -- they're already covered by Medicaid. This is about the Catholic grandmother working as a secretary to help her kids afford Kindergarden tuition at St. Patrick being forced to buy birth control for the wife of the CEO who makes twenty times more.

And as Roy lays out, this amounts to a huge subsidy to the drugmakers, who backed the bill, and have spent and raised millions for Democrats in the last three elections:

If you were surprised that PhRMA, the pharmaceutical trade group, backed Obamacare, now you can see why: the HHS contraception mandate alone will be a multi-billion-dollar boondoggle for the pharma industry. If your health insurance plan allowed you to buy a television, of any price, without any cost-sharing on your part, would you buy a 13-inch CRT or a 60-inch flat screen?

 

Previous blatant lies about the contraception mandate:

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