Saturday, February 11, 2012

How the contraceptive compromise will work


Some opponents of the HHS mandate for contraceptive coverage have accepted Obama’s accommodation, others are still holding out.  Those who still object argue that even though religious organizations will be able to exclude contraceptive coverage in their health insurance, they will still be paying for it since the free coverage from insurance companies will be built into the premiums religious organizations pay.  The White House is saying that won’t happen.  Here is the explanation from a senior administration official:

“The way this works [right now] is, I’m a Catholic hospital, and I say I’m going to offer insurance,” said the official. “I’m going to say, ‘Aetna, I don’t want contraceptives covered.’ Aetna is going to look at the benefits I cover, set a premium for the anticipated costs. Then they charge that premium, which goes into Aetna’s reserves.”

And here’s how it works after the compromise: “Our policy is saying that the Catholic hospital doesn’t want to cover contraceptives, and they don’t include that in their policy. It also says that Aetna needs to provide contraceptive services for free to workers in the plan. Aetna sets the premium, but it cannot be higher than it would have been without birth control. The premium does not include contraception.”

And, in the end, that leaves Aetna with the bill. “There is a sort of bank account, and Aetna is sucking it up…They have a reserve fund to pay for all the things they cover,” says the official. “We’re saying, ‘This is a legitimate cost of doing business.’ That cost is covering contraceptives, and they’re paying for that from a reserve.”

Note two important points concerning how the compromise will work.  First, under the proposed rule, the insurance company CANNOT charge the religious organization more than it would have been charged anyway.  The cost of the contraceptive coverage CANNOT be passed through to the religious organization through higher premiums.

Second, the insurance company must treat the cost of covering contraceptives as a “cost of doing business” like, for example, offering policy holders a free Wellness program to help them lose weight, eat better and manage stress or chronic conditions like diabetes and osteoporosis..  Like the wellness program, the insurance company absorbs the cost because in the long term the wellness program, or in this case covering contraceptive services, will SAVE the insurance company money by avoiding expensive treatments they might otherwise have to cover.  In short, long-term it is cheaper to cover people who get and stay health and/or avoid unwanted pregnancies. 

Of course, some opponents of the compromise will argue that the whole idea of the insurance company paying for the contraceptive services from a reserve fund as a cost of doing business is just an accounting trick and somehow the cost will still be passed through to the religious organization.  However, if you follow that logic then you could argue that ANY insurance company that provides free contraceptive services to ANY policy holder ANYWHERE somehow passes through the cost to the religious organizations in some way or another.  If that were true, the only way to avoid “attacking religion” would be to forbid insurance companies from offering free contraceptive services to ANYONE.  Of course, that would be absurd and would violate the rights of those who want such coverage. 

It is time for religious groups to accept the compromise and shut up.  Obama’s accommodation is a reasonable compromise that respects everyone’s rights and asks the insurance companies to provide a free service that long-term will be a net zero cost or even save them money.  We need to move on.

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