This week, the Institute of Medicine (IOM) released its recommendation of women’s preventive services that should be covered with no co-pay or deductible under Obamacare—a list that included birth control and emergency contraception. While this raises important questions regarding social policy, it’s also relevant to the ongoing debate about Obamacare and the consequences of allowing bureaucracy to over-regulate health benefits.
Obamacare’s requirements that health plans cover certain preventive measures with no cost-sharing were implemented through Health and Human Services (HHS) regulations in July of 2010, but as part of the new law, the department was to review preventive services specific to women’s health and can include further guidelines by amending the existing regulations. The IOM’s recommendations included a wide array of contraceptive and preventive measures, and whether all of the services make it on to the list is yet to be seen; however, the pressure from advocacy groups to ensure they do will be strong. The decision isn’t simply a question of providing women with “free” contraception, but rather a bad experiment in government micromanagement of health care that will end in higher premiums and fewer coverage choices for all Americans.
The new federal benefit requirements represent a blatant assertion that Congress and federal bureaucrats know best how to design health insurance policies. The effects will be one-size-fits-all coverage—so that patients are not “confused” by having choices—and elimination of employers’ freedom to design their own self-insured plans.
Many Americans find the use of birth control morally objectionable, and some women may simply have no need for a health plan that covers these services, based on any number of personal choices and other factors. Those that fall into this category would have no choice but to pay for unnecessary coverage if the recommendations are made law.
Experiences with state-mandated health benefits show that mandating coverage doesn’t make certain services or treatments “free”—the insured pay for them in the form of higher premiums.
Even left-leaning health economists like Jonathan Gruber have expressed that mandating more generous benefits will impose higher costs on private insurers, which would be passed on to patients. They warn that this would, in turn, increase the cost of Obamacare and its impact on the federal deficit by increasing the subsidies provided to purchase insurance in the new exchanges.
Furthermore, as the Congressional Budget Office advised in November of 2009, “reduced cost sharing would lead to greater use of medical services, which would tend to push premiums up further.”
If HHS takes an overly prescriptive approach regarding these particular measures, women who would prefer not to pay the higher premiums to carry health benefits they don’t need or to which they object won’t have that option.
In a truly market-based insurance exchange, women would be able to choose a health plan that met their needs and was consistent with their values, and those who wished to forgo certain benefits would have the freedom to do so. If any attempt at health reform is to succeed at reducing costs and tailoring coverage to the specific needs of each individual, it must ensure that consumers are able to choose the plan and benefits that work best for them, rather than submitting to the decisions of a bureaucratic board.