FactCheck.org: Cloudy Contraceptives Costs
Cloudy Contraception Costs
Does insurance coverage for contraception save money? We find lots of evidence. But it’s conflicting, and inconclusive.
February 24, 2012
Is the Obama administration correct when it claims its contraception mandate will be “cost neutral” for insurance companies? Or are the critics right when they say Catholic institutions will pay a hidden cost in the form of higher premiums when their insurers are required to give “free” contraceptives to their female employees?
We’ve found plenty of evidence. But it’s often conflicting — and ultimately inconclusive. Some leading examples:
- The administration cites Hawaii’s birth-control mandate, which a study said “did not appear” to increase health insurance premiums. Interestingly, the same study also showed an increase in the number of pregnancies after contraception coverage was required.
- The administration cites a 1995 study that found significant savings from contraception. The study also said insurance company costs are likely to increase if coverage is simply provided to people who would otherwise buy birth control.
- When Pennsylvania considered a birth-control mandate, an independent state agency concluded that “the amount of possible savings relative to the cost of the legislation is unclear.”
- Connecticut also could not conclude whether private insurance plans saved enough from reduced pregnancy costs to cover the added expenses of providing coverage under that state’s mandate.
- A Texas study estimated that covering contraception would not produce enough savings to cover the added cost. It reasoned that, in most cases, women would get contraceptives on their own even if not covered by insurance.
- Premiums did not increase when the Federal Employee Health Benefit System was required to cover contraceptives. Some of the 300 plans in the system covered contraception prior to the mandate.
- A recent survey of 15 insurance companies said six of them expected costs to rise while another three believed the mandate would be cost neutral. None predicted a net cost savings by reducing unintended pregnancies.
There are other studies, some of which we describe in the Analysis section which follows. But altogether they produce a murky picture. Until better data are available, we’re unable to conclude whether the Obama birth-control mandate is likely to result in a net cost increase or not.
Note: This is the first story prompted by our Spin Detectors feature, through which we ask our readers to help us monitor political claims and campaigns across the country. Our thanks to Hugh Haines of Sacramento, Calif., who sent us a press release by Republican Rep. Dan Lungren of California. Lungren is among those saying the administration’s announced compromise will still force Catholic institutions to pay for birth control through higher premiums.
Note: This is a summary only. The full article with analysis, images and citations may be viewed on our Web site: