Insurers oddly unenthusiastic about "cost-free" contraception

Barack Obama and Kathleen Sebelius insist that their new mandate for employers and their insurers to cover the cost of contraception and abortifacients won’t cost anyone anything. An HHS study claims that the costs of contraception get outstripped by the savings of preventing pregnancy and childbirth, and so insurers should be delighted to offer those products and services for free.  Oddly, however, insurers are not terribly enthusiastic about the notion, The Hill reports today, perhaps because they actually have to balance their own budgets at the end of each year … unlike Obama and Sebelius:

 But in private, the industry is dubious of the administration’s argument that the insurance industry wouldn’t take a hit because birth control is cheaper than unwanted pregnancies.

The trade group America’s Health Insurance Plans has limited its comments to saying it worries about the “precedent” the mandate would set. The concern is that the government could eventually require health plans to cover any number of preventive services – even prescription drugs – without copays or deductibles, under the theory that they save money in the long-term.

Privately, however, insurers say there’s nothing “free” about preventing unwarranted pregnancies. They say the mandate also covers costly surgical sterilization procedures, and that in any case even the pill has up-front costs.

“Saying it’s revenue-neutral doesn’t mean it’s free and that you’re not paying for it,” an industry source told The Hill.

Doctors still have to be paid to prescribe the pill, drugmakers and pharmacists have to be paid to provide it – and all that money has to come from insurance premiums, not future hypothetical savings, the source said.

I’ve addressed this a number of times over the past week or so, but it’s worth repeating.  The savings claimed by HHS are speculative and long term, even if one accepts the claim as generally true.  The costs have to be paid up-front immediately.  Regardless of whether risk pools operate on a for-profit or non-profit basis, they have to balance their books at the end of each year, which means that premiums have to cover at least all of the payments and administrative costs of the risk pool for that year.  That means extra costs have to be covered with extra revenue in the same year.

So, when this mandate goes into effect, insurance premiums will have to rise to cover the increased costs of providing these products and services, especially for surgical sterilizations.  Since the mandate blocks the assessment even of co-pays, that means that everyone in the risk pool will assume those costs in increased premiums, including the employers who normally cover a high percentage of premium costs for their employees.  For self-insurers, that means that the employer will pay all of the increased costs, and since employees will come and go over the period of twenty-five years or so of childbearing age, they are very, very unlikely to see any of the HHS-promised long-term benefits of being forced to provide those products and services for free.

That’s bad enough for employers in general, who will now have to wonder what the Obama administration will order them to provide for free next.  For religious organizations that have doctrinal objections to these products and services, it exposes the “accommodation” as a shabby lie (especially for self-insuring religious organizations).  Not only will the mandate force them to facilitate access to these products and services — which by itself violates doctrine in many Christian denominations — it will force religious organizations to fund them as well, especially since ObamaCare no longer gives them the legal option of ending health insurance.