Contraceptive Coverage And The PPACA

Last year I wrote about the guidelines HHS had released regarding women’s healthcare and the various preventive services that were going to be covered on non-grandfathered health insurance policies as of August 1, 2012.  The public debate over the issue of contraceptive coverage reached fervor pitch a couple months ago, but has since settled down a bit.

To sum things up, most new health insurance policies issued on or after August 1, 2012 will have to cover the full range of FDA-approved contraceptives – which includes a wide range of options from oral contraceptives to tubal ligations – without cost sharing for the insured.  Interestingly enough, I couldn’t find anything definitive regarding coverage for vasectomies.  A vasectomy is the male version of a tubal ligation, but it’s significantly less expensive.  This article pretty much sums up the problem with focusing only on women when it comes to contraceptive coverage, but everything I’ve seen indicates that contraceptive coverage is going to be added to women’s preventive care rather than preventive care in general.  I’ve seen plenty of references to “the full range of FDA-approved contraceptive methods”, and on the FDA website, male sterilization is listed under birth control.  However, I did not find anything specific regarding vasectomies on the HHS site or any other official site.

Anyway, assuming that we’re talking about contraceptives for women, new health insurance policies – except those that are exempt based on religious reasons – will cover contraception with no copays or deductibles.  Non-grandfathered plans (grandfathered means that the policy was in effect prior to the PPACA being signed into law and that the plan has not made any significant changes since then) will have to start covering contraceptives as of each plan’s renewal date.  This is similar to how the state maternity mandate worked in Colorado last year.  New policies had to start covering maternity on January 1, 2011.  But existing policies added it throughout the year as each plan renewed (for example, my family’s health insurance plan renews each year in November, so our maternity coverage didn’t begin until November 2011).  This brief from the Kaiser Family Foundation website has a lot of good information regarding contraceptive coverage and should help to clarify the issue a bit.

I was discussing this issue last night with a good friend who works in a women’s health clinic.  She noted that if all forms of birth control are covered with no cost sharing, women may be more likely to choose long-lasting (and more effective) forms of birth control like implants and IUDs over patches and pills and rings.  Right now, the up-front costs associated with the long-lasting birth control is likely a deterrent for a lot of women.  But over the long run, those methods are more effective and can be a lot less expensive than short-term birth control options.  If we compare a ten-year IUD (high end, $800) with ten years of birth control pills (let’s say an average of $20/month for 120 months = $2400), the IUD wins hands down in the cost department.  But for a lot of women, their current health insurance might only cover contraceptive pills, or they may have no coverage for birth control and find it easier to come up with $20 a month than several hundred dollars all at one time for an IUD.

In terms of cost, the general consensus among experts is that there will be no additional costs associated with providing contraceptive coverage, because the reduction in the number of pregnancies (and their associated costs) will cancel out the cost of the birth control.  Roughly half of all pregnancies in the US are unplanned.  And we know from lots of studies that even small amounts of cost-sharing end up reducing the number of people who utilize any particular healthcare service.  So providing birth control with no cost sharing is likely to result in more women using birth control, which should in turn lead to fewer unplanned pregnancies.

Religious organizations are exempt from covering contraceptives.  Organizations that are affiliated with religious groups (like hospitals and universities that are run by churches, for example) will still have to comply, but in a round-about way:  the health insurer or a “third party administrator” will provide the contraceptive coverage to employees or students, but it will not be paid for by the religiously affiliated employer or university.  This is an effort to make things work for both sides (the organization that might be opposed to the use of birth control and the employees/students who want to use birth control but are unable to afford it).  If you’re unsure where your employer fits into this picture, you might want to double check with your HR department and/or your health insurance carrier to see how your coverage will be impacted.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.

Comments

  1. Louise:
    A ten-year IUD at $800, costs $80 per year. In my opinion, this should not be an insurable event. Neither should most or all preventive care. This mandated coverage will simply continue to foster the medical price bubble. With Milliman, an actuarial firm, we are looking at first dollar coverage for everything on a paid-up monthly basis. We hope the premium will be “affordable,” so that people can build $25,000-$50,000 of paid-up coverage (never pay another premium) in 2-4 years. Doing so reduces the traditional premium by 60-80%. For our next round of discussions, we will be looking at a percentage of people who voluntarily forgo the first dollar of coverage, in order to continue building paid-up monthly benefits. They have never done this for a product before, because this is the first time they have seen a product like ours.
    Don Levit

  2. Don, I agree with you in terms of relatively small medical expenses not being “insurable events.” However, that’s coming from my own perspective – I’m a fan of HSAs, high deductible health plans, and saving money for a rainy day in order to cover non-catastrophic medical bills. This is definitely not how a lot of people think about healthcare though. Several studies have shown that any amount of cost-sharing will reduce the number of people who obtain non-emergency medical services, particularly preventive care. So if the goal is to increase the number of people who use preventive care and family planning services, eliminating cost-sharing is one way to do it.
    I’m particularly intrigued by the idea that mandating contraceptive care on health insurance plans adds can be done at no additional cost to anyone, since the reduction in the number of unplanned pregnancies (which are expensive) offsets the cost of the contraceptives.
    I think your health plan idea has a lot of merit too, and I’m excited to watch its progress. With our existing plans however, I think that if mandatory contraceptive coverage can be provided at no additional costs, it makes a lot of sense to do so.

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