Joe Carter notes that the Obama Administration is considering whether to require health insurers to pay for contraceptives. Even leaving aside moral objections, this is great foolishness from an economic point of view.
To simplify matters, assume that the insurance pool contains 500 male-female couples and that they all buy their insurance jointly as couples. If they all use the same quantity of contraceptives every year, then each couple will incur the same annual contraceptive costs, say, $100. If the insurer does not cover contraceptives, each couple is out $100 a year for these costs. If the insurer does cover contraceptives, then it can expect to pay out an additional $50,000 per year in claims (500 couples times $100 per couple), and so it will have to raise its premiums. How much? By at least $100 per couple, but in fact a bit more, because it costs something to process the extra claims and related paperwork. So each couple will see its insurance premiums rise by, say, $105 per year. Hence, at the end of the year, although the couples got their contraceptives “for free” under their insurance policies, they in fact paid for them in the form of higher insurance premiums. Indeed, they paid more in increased insurance premiums than they would have paid had they bought their contraceptives directly.
Of course, not everyone uses contraceptives, and among the people who do, not everyone uses the same amount. The real effect of requiring insurers to cover contraceptives will thus be that everyone’s insurance premiums will go up, but some people will benefit from this, and some will be harmed. In essence, those who use an above average amount of contraceptives will be benefited, and those who use a below average amount will be harmed. Hence, generally speaking, the winners will be young, sexually-active heterosexuals, especially unmarried people, and the losers will be older people, chaste people, people who want to conceive a child, and gays and lesbians. Why should these latter people subsidize the sex lives of the former people? I can see no plausible justification for this.
The stated reason for the policy is that some people don’t have access to contraceptives because they can’t afford them. Given how cheap contraceptives are, it would seem to me that the number of such people must be relatively small, but we can let that pass. The bigger point is that, if the Obama Administration thinks that we need a new public assistance program for people too impecunious to purchase their own contraceptives, there are cheaper and fairer ways to accomplish this. For example, we could allow people below a certain income level to receive a credit against their income taxes for their annual contraceptive expenses. We could call this program a Pill Grant.
The truth of the matter is that “Pill Grants” would never pass because the American people have the good sense to think that, with limited exceptions, people should pay their own way in life, and there is little reason for some Americans to subsidize the sex lives of other Americans. If, however, the true nature of the program can be disguised by wrapping it up in an insurance policy, it has, unfortunately, a chance of becoming law because most people will not realize what’s happening.
February 4th, 2011 | 5:56 pm
The justification given is that it is preventive care and has the potential to recoup costs slightly by protecting people from serious and more costly procedures. People who are given free condoms (and shown how to use them properly) will need fewer expensive doctors visits and antibiotics regimes/anti-AIDS pills/cancer treatment for STDs. Even for women on the pill/IUD exclusively (which does not protect against STD) ready access to contraception lowers the chance that insurance has to pay for an abortion.
I don’t know the actuarial statistics, but it’s entirely possible that the savings from these big ticket items will more than balance out the cost of the contraceptives+overhead.
Obviously the abstinent and the sterile will still be subsidizing the sexually active, but that’s the case in the current system as well.
February 4th, 2011 | 6:04 pm
It’s galling indeed, because rather than being a curative of any sort, the role of a medical contraceptive is to take perfectly healthy reproductive organs and render them non-functional. Certainly that should not be the role of a ‘health’ provider.
February 4th, 2011 | 7:06 pm
“The real effect of requiring insurers to cover contraceptives will thus be that everyone’s insurance premiums will go up, but some people will benefit from this, and some will be harmed. ”
That is, in fact, the general principle behind the entire Health Care Reform Act. The political rationale is those people helped the most and harmed the least will be members of the Democrat’s core constituencies.
February 4th, 2011 | 7:19 pm
I think that by “chaste people” the author means “celibate people.”
February 4th, 2011 | 7:41 pm
“Why should these latter people subsidize the sex lives of the former people? I can see no plausible justification for this.”
Uhhh – that’s how all insurance works. So are you saying that you’re against insurance altogether? Because this is, in fact, not limited in any sense to contraception: men don’t benefit from cervical cancer treatments, poor people don’t (statistically) benefit from treatments for age-related diseases, etc. and so forth. This kind of thinking cannot be carried through without utterly ruling out insurance.
@Jim, please be more serious. We are not concerned with the healthiness of *organs* in medicine; we are concerned with the healthiness of *people* – yes? So this argument of yours is not compelling.
February 4th, 2011 | 7:41 pm
@Jim: Your objection is a very strange one, as though people must be constantly producing children in order to be “functional” and “healthy” people. (Girls/women from their first period until they hit menopause…?) After all, teaching abstinence also makes their perfectly healthy reproductive organs non-functional (in that they are not being used). Do you object to abstinence as well?
February 5th, 2011 | 5:50 am
We are not concerned with the healthiness of *organs* in medicine; we are concerned with the healthiness of *people* – yes?
What precisely is the relationship between contraceptives and the healthiness of either organs or people?
Robert’s argument is that the vast majority of contraception (especially prescription contraception) has nothing to do with health, but with lifestyle choices. This is fairly evident if you follow his argument.
I think that by “chaste people” the author means “celibate people.”
It is possible to be both chaste and sexually active.
After all, teaching abstinence also makes their perfectly healthy reproductive organs non-functional (in that they are not being used).
Seems to me that nearly everyone’s sexual organs are still in use even if they practice abstinence; they just aren’t in active use for reproduction. After all, “functional” means “able to be used” or “ready for use”, not “in use”. If “functional” meant “in use”, then quite a few of our organs would be non-functional at any given time, and (by your apparent logic) unhealthy.
February 5th, 2011 | 9:44 am
The point is that they’re trying to establish the right to have sex (and not just any sex, but specifically sex-for-pleasure, separated from fertility) become a basic human right.
That is why contraceptive must be subsidized. Because we are supposed to start thinking of doing without contraceptives as being somehow like doing without food or shelter – basic life necessities.
Because what people do with their bodies is not something they can reasonably be expected to control. We should be grateful if the promiscuous can take enough responsibility to use birth control at all, if we pay for it and take it upon ourselves to make sure it’s easy for them to get.
February 5th, 2011 | 9:48 am
The difference is that contraceptives are not about health — they are about people’s desires to have certain outcomes in their lives, within the framework of given choices they make. Regardless of the merits or demerits of those desires or choices, why should that be subsidized by others in the form of health insurance?
February 5th, 2011 | 9:56 am
Eli: I think the point is pretty clear that he objects to the expansion of the definition of “medical procedure” to include something that is neither fixing nor preventing a disease.
Pregnancy is not a disease, and birth control is not a medical device – not unless we change the meaning of “medical” to include anything we do to our bodies in order to have more control over our lives.
What medical expenses should the taxpayer subsidize? If you believe that passing the expense of a thing on to “the taxpayer” makes it essentially free, then why not cover birth control (and tattoos too for that matter, and body piercings – hey, self esteem and identity are valid parts of the human condition!)
If, however, you recognize that “free” actually really just means “the costs are still there but obscured”, then you know that there’s no way to get free condoms – it’s really just an expensive fantasy: the condoms will end up costing someone far more than they’re worth.
Even the idea that the “someone” who pays for the condoms will be “someone else” is a fantasy: the same young healthy people who think they will be scoring free condoms might very well be the ones hardest hit by any economic consequences that come around in the form of “unintended consequences”, because policies like this actually make it easier, not harder, for the powerful of the world to pass the costs on to the little guy (who does not protest because he thinks he’s getting something for free, and does not realize how much it is really costing him).
February 5th, 2011 | 10:31 am
NFQ — that’s not quite right. Reproductive organs are being used according to their normal function when sexual activity is not occurring — gametes are being produced according to the normal cycle for the respective sex, and so on.
Chemical birth control causes those organs not to be used as intended — they are no longer producing gametes in their normal cycles.
So I think there’s a valid distinction to be made between lack of sexual activity resulting in lack of reproduction, and the actual disabling of the function of the organs.
February 5th, 2011 | 8:07 pm
That would be LOL if you weren’t serious.
My auto insurance doesn’t pay for my oil changes precisely because they are preventative maintenance.
February 5th, 2011 | 8:43 pm
“I think that by “chaste people” the author means “celibate people.””
“It is possible to be both chaste and sexually active.”
Jack Perry,
That was my point; thank you for restating it. While the author says that chaste people will not benefit, I think (or hope at least) that he intended to say that celibate people will not benefit.
February 5th, 2011 | 11:57 pm
Stephen,
There does exist a large group of married people who are not celibate but chaste, and would not benefit. They’re not always large families, and they’re not always religious. (There are a lot of non-religious types interested in natural family planning.) That was my inference of what Robert meant.
February 6th, 2011 | 1:14 am
So if the pill, for instance, is 98% effective. Roll the dice for each menstrual cycle. Roughly, with 120 cycles (10 years of “perfect use”, as they say) there is a 70% chance that a woman will get pregnant. So a 35% chance of pregnancy in 60 cycles. This is why so many switch to sterilization as there main method. This is why the abortion industry thrives (Guy: “Pregnant?! I thought you were on the pill? Gal: “I am!” Guy: “Well call Planned Parenthood, we need to take care of this, or I’ll dump you.”), and will thrive even more once Obama’s plan goes through.
February 6th, 2011 | 1:33 am
“…ready access to contraception lowers the chance that insurance has to pay for an abortion.”
Actually, that’s not true. Studies show that increased use of contraceptives increases the number of abortions. See this article for an explanation of a recent study: http://www.lifesitenews.com/news/new-study-links-contraception-hike-with-increased-abortions
So really, I think the insurance companies would just be setting themselves up for most costs if they choose to cover contraceptives in such fashion. And that’s not even to mention to inherent health risks associated with the contraceptives themselves.
February 6th, 2011 | 3:43 pm
“…ready access to contraception lowers the chance that insurance has to pay for an abortion.”
No insurance company ever has to pay for an abortion if they don’t cover them.
February 6th, 2011 | 3:47 pm
Jack, there is also a group of people who are not celibate but chaste, and would benefit (insofar as having contraceptive coverage is a benefit.) So I think that’s why Stephen objects to the construction “chaste people would not benefit.”
February 6th, 2011 | 10:47 pm
TXW — the chances are that high only if the woman has intercourse during her peak (potential) fertility period every month. In practice, the chances wouldn’t be that high. I don’t know if there’s an accurate way to estimate that.
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