As it stands, church-run hospitals are required to cover contraceptives at no cost to employees. A slew of Catholic groups have opposed that requirement. So on Friday, the White House rolled out a new rule, where insurance companies, rather than faith-based agencies, will offer birth-control coverage directly to these employees and foot the bill.
“If a charity, hospital or another organization has an objection to the policy going forward, insurance companies will be required to reach out to directly offer contraceptive care free of charge,” one administration official explained.
Four states - - New York, Missouri, Hawaii and West Virginia -- have contraceptive mandates where employees at faith-based organizations are offered contraceptive coverage outside their policy. The big difference, however, is that in those states the individual employees pick up the tab for the contraceptives rather than the insurance company.
The administration thinks this is a good deal for insurance companies since the economics tend to work in their favor. Numerous studies have shown that covering contraceptives is revenue-neutral or saves money, as such preventive measures can lower the rate of pregnancies down the line. Pregnancy and childbirth coverage is, of course, much more expensive.
“Contraceptives save a lot of money,” a senior administration official argued.
The catch here is that there’s a difference between “revenue neutral” and “free.” By one report’s measure, it costs about $21.40 to add birth control, IUDs and other contraceptives to an insurance plan. Those costs may be offset by a reduction in pregnancies. But unless drug manufacturers decide to start handing out free contraceptives, the money to buy them will have to come from somewhere.
Where will it come from, since neither employers nor employees will be paying for these contraceptives? That leaves the insurers, whose revenues come from the premiums that subscribers pay them. It’s difficult to see how insurance companies would avoid using premiums to cover the costs of contraceptives. They could, perhaps, use premiums from non-religious employers. Those businesses wouldn’t likely object on faith-based grounds, but they probably wouldn’t be keen on footing the bill for people who aren’t on their payrolls.
This new rule has done the White House some political good. It has already won over Catholic Health Organization’s Carol Keehan, a supporter of health reform supporter who had opposed the initial rule. It is not, however, expected to win over the Catholic bishops, who will likely worry that their premiums will implicitly go to offset the costs of birth control. Republican legislators, meanwhile, have already started attacking the White House’s accommodation.