Put aside the political and religious fights for a moment. There’s a simple fact about contraception that gets lost in much of the coverage: it saves money. Lots of money….
Contraception costs $100-$600 annually and cuts the risk of unplanned pregnancies to nearly nothing. Liebman finds various estimates of the savings: One paper put it at $6,000-$10,000 per person for every two years on contraception. Another put it at $13,000 over five years of contraceptive coverage. A study of Medicaid found that contraceptive services saved $4.26 for every dollar invested.
So contraception coverage is a massive net winner for insurance companies and policies should default to contraceptive coverage with no barriers to usage.
Right?
Austin Frakt at the Incidental Economist:
A fuller review of the literature on the cost and cost offsets of contraceptive coverage by Daniel Liebman, a colleague, finds that the evidence is thin that, from an insurer’s perspective, contraceptive coverage pays for itself in the long term. Moreover, it almost certainly does not in the short. The cost of contraceptive coverage is immediate, and the possible offsets (reduced pregnancies) are downstream, often years in the future….
In a 1995 study in the American Journal of Public Health and in a 2000 Milliman Studyassessing Texas’ contraceptive mandate, the authors argue that the eventual savings of contraceptive coverage may not necessarily accrue to an insurer.
Both sets of statement are true from a certain point of view. These posts are answering two slightly different questions. Ezra Klein is summarizing whether or not contraception availability reduces total system wide medical costs. Austin Frakt’s point is that system costs may be reduced but the health insurance company that is paying for the contraception for people who receive employer sponsored coverage is not gaining the cost savings.
The argument that contraception reduces total system costs is fairly straightforward. Pregnancies in general are expensive. Unplanned pregnancies tend to be more likely to occur with individuals who are in a more stressed life situation so the probability of stressed and complicated pregnancies (controlling for age etc) is higher. Reducing the number of unplanned pregnancies reduces costs even if the unplanned pregnancy in Year 1 is “replaced” with a planned pregnancy in Year 3. Voila, significant costs savings.
Employer sponsored health care has a risk pool that is significantly different than the general population, and very different than the pre-Expansion Medicaid population. Individuals who have employer sponsored health insurance tend to be more likely to be employed, more likely to not be living in poverty, more likely to be reasonably healthy, more likely to have a high school or greater educational attainment and more likely to be out of their teens than the general population. All of those “more likely” qualifiers reduce the probability of both unplanned pregnancies and reduce the probablity of complicated pregnancies. Furthermore, individuals with employer sponsored health insurance have significantly more resources than average to substitute pharmaceutrical/prescription birth control for other methods (condoms for instance). From an insurance company point of view, contraception coverage is “belts and suspenders” coverage for most women with employer sponsored health insurance.
That view can change if we change the population being considered, or if we broaden the scope of the cost-benefit assignment system. A broader scope that includes social service costs or a targeted population of individuals with low substitutability of prescription and non-prescription birth control usage will show massive costs savings to society as a whole but a narrow scope that is restricted to only immediate claims impact will show a wash.
In situations like that, the correct public policy move is to either have a federal mandate of universal coverage via private insurance so that no company has a competitive advantage to deny OR a direct federal subsidy so that system costs can be reduced even if the payers don’t see a positive return on investment. And then the second phase of good public policy for either option is to sacrifice a goat to placate the asshole five on the Supreme Court and hope that works.
BrianM
Excellent post.
C.V. Danes
I must admit, I have never understood why the US Chamber of Commerce has not put its weight behind a single-payer option, given the competitive advantage it would restore to our companies, who have to compete with foreign companies that don’t have to incur these costs. After all, the US Chamber of Commerce doesn’t have a problem socializing every other cost, so why not this one?
Richard Mayhew
@C.V. Danes: Control plus Big Government plus taxes — remember, the Chamber has a massive principal-agent problem as its members (high income individuals in the C* level) want to protect their own interests/income with the trade-off of harming the organizations that they have responsibilities for. Furthermore, single payer means more competition, and any business successful enough to afford a Chamber membership does not want competition.
Jackie
Plus many women will pay for the contraception themselves if it isn’t covered. So the insurance company doesn’t pay for either the contraceptive or the pregnancy.
Anyone with the means didn’t get pregnant to spite the insurance co.
Richard Mayhew
@Jackie: Yep, exactly, that is what I mean by substitution effects. If the Pill/IUD/Vaginal ring is unavailable, condom/spermicidal foam is available at Walgreens/CVS.
The question from an insurance company POV is what is the incremental births not happening due to contraception coverage v. no contraception coverage and at what cost to the insurer.
MomSense
Here is what bothers me about the way this debate seems to be taking place (not with you, Richard). The birth control pill/IUDs etc can be used to treat multiple medical conditions. I used “the pill” to treat a blood disorder. Even before I was using the pill for birth control, my parents still had to pay for it out of pocket because of the other contraceptive use for the same medication.
There are lots of medications that are used to treat multiple health conditions and yet we seem to single out birth control and not include it in health coverage because of judgments about whether women should be allowed to prevent pregnancy. This really is a completely BS situation.
Richard Mayhew
@MomSense: Agreed — hormonoal contraception is an FDA approved pharmacetutical so it should be treated like any other pill the FDA approved
Rob in CT
Because the Chamber and similar organizations don’t actually represent the interests of businesses. They represent the interests (including the irrational ones) of the OWNERS (edit: and high-level execs, so owners + operateors, I guess you could say) of those businesses. The owners, by and large, hate the idea of government-provided healthcare. Mostly for ideological reasons, I figure, but there’s also the control/power aspect. If you are the conduit for the healthcare, you get those warm fuzzies about “giving” your employees things (remember, these are the same people who seem to think jobs are things they “give” to people).
Citizen_X
Why do you want to make Mickey Kaus sad like that?
dmsilev
@MomSense: That was the gist of Sandra Fluke’s testimony. And the right wing of course took her appearance, ignored the pill-has-other-medical-uses thing, ignored the contraception-as-health-benefit thing, and went full-throttle slut-shaming.
libarbarian
Horrible post.
Real TRUTH is SINGULAR and VIEWPOINT INDEPENDENT! Your “truth” is LIES!
BobS
@Rob in CT: It is about control and power, but not about “giving” — a primary reason many employees stay wedded to their employer is health insurance. Universal single-payer would level the playing field for employees.
Matt McIrvin
So, in other words, this is a classic market failure.
MomSense
@dmsilev:
That was an incredibly discouraging episode. Can I also say that I find it even more infuriating when the people who judge women and deny us our agency don’t even know how hormonal contraception works?! They don’t know how contraception, conception,menstruation, ovulation, etc. work. I’m a grown ass woman and I’m supposed to defer to the determination of an ignoranus man about my own medical decisions???
ETA: Kinda like when the people who most strongly favored military intervention in Ukraine couldn’t even find it on a fucking map!
beth
@MomSense: Exactly – I recently was talking to someone on Facebook who asked why he should pay for women to take a pill every time they wanted to have sex. If you don’t even know how it works, who the hell are you to make the rules on its usage? Drives me crazy.
Chyron HR
@libarbarian:
Richard Mayhew
@Matt McIrvin: Pretty much, a classic collective action problem/resource coordination problem where we can either hope for Coase like improvements or use government as a forcing mechanism.
bemused
@beth:
This guy seems to think contraception pills work just like the little blue pill.
libarbarian
@Chyron HR:
Hey! You can’t talk to me like that. I’M AN ADULT!!!
The moral of the story is YOU CAN’T TRUST THE SYSTEM!!!!
Mike in NC
@C.V. Danes: The members of the US Chamber of Commerce would have considered Ebeneezer Scrooge a bleeding-heart liberal unworthy of being part of their organization.
Amir Khalid
@libarbarian:
Wow. I had an idea there might be levels below trolling. But you seem to have skipped those levels and gone straight into ankle-biting.
Villago Delenda Est
What’s this saving money shit? The sluts need to be punished!
D58826
Isn’t there a longer term savings in this with regard to the health care costs of the baby that isn’t born? No well baby visits, no broken arms in gym class, etc.
MomSense
@beth:
Right there with you at driven crazy by stupid town.
big ole hound
@libarbarian: you may be an adult age wise but your logic is that of a two year old with a tantrum.
Cervantes
@libarbarian: But that’s the moral of every story.
shelley
Silly us. Thinking that conservatives liked to conserve stuff…like money.
Xantar
@MomSense:
I don’t think the framing of the contraception debate is entirely due to the conservative side. I think there’s also a feeling on the left that we shouldn’t apologize for using contraception for birth control purposes and therefore we should confront the debate head on. I’m normally not sympathetic to the “stand up proudly for your principles and people will follow you” line of argument, but in this case I think it has a lot of merit.
schrodinger's cat
@shelley: What they like to conserve is their privilege and egos.
Villago Delenda Est
@big ole hound: You’ve just described the essence of the libertarian mindset.
Bex
@libarbarian: Right. Happy 14th birthday, BTW.
TooManyJens
@D58826: Yes, but again, it’s often the case that the insurer that covers the contraception isn’t the same insurer that would have been covering those costs down the line. Our family’s had the same insurance company forever because we’ve had reasonably steady jobs and really hate moving, but I don’t think that’s the norm.
@Xantar: There’s definitely been a strong sentiment on the pro-contraception side that “Fuck it, they’re going to slut-shame us even if we talk about the other medical uses, so we might as well be loud and proud about the fact that women like to have sex and that’s OK.”
Villago Delenda Est
@Richard Mayhew: Yeah, this is always a problem. The confusion of interests between individuals and organizations. Exacerbated by the obsession with short term profit for the few at the expense of long term prosperity for the many, which (here I go again) Adam Smith identified as a problem over two centuries ago.
beth
@Xantar: But using it as contraception is a medical use – it prevents the medical condition known as pregnancy. The problem is that many people don’t see family planning as part of a women’s healthcare. They’re fine with paying for childbirth even though having a baby is one of the most elective medical conditions you can have (except in rape, of course). It’s not like cancer where you have little control over whether you get it or not. Using their arguments, why should I pay for you wanting to have a baby? I’m not saying you can’t have a baby, you just have to pay for it yourself. These arguments fit both contraception and childbirth yet they have no problem with one of them, why is it?
Richard Mayhew
@D58826: yeah, but the odds of any one insurance company paying for the well baby visit is fairly low. Massive collection action problem.
libarbarian
@big ole hound:
Logic? I throw that shit on the ground!
Villago Delenda Est
@beth:
Did I mention before that sluts need to be punished?
Biscuits
@C.V. Danes:
Agreed. Them and unions(what’s left of them).
Villago Delenda Est
@libarbarian: You’ve been providing a splendid example of Poe’s Law all morning. Don’t stop now!
libarbarian
@Villago Delenda Est:
I’m not going to let some PHONY named Poe’s FASCIST laws tell me what to do!!!
I’m NOT a part of your SYSTEM!!!
smith
Isn’t this cost analysis exactly the same with all preventive care? The long term cost savings from prevention don’t necessarily accrue to the insurer that pays for them? Why, then, should contraception be a special case deserving a separate discussion of costs?
Yes, I know the answer — it’s the only type of preventive care that affects the extent to which males in power hope to control sluts. Kaili Joy Gray had a great rant the other day about how it’s high time we started insisting that women’s health care be treated exactly as all other health care:
I have to agree — as long as women’s health care gets treated as a special case, our personhood will always be counted as somewhat less than men’s.
MomSense
@Xantar:
I probably wasn’t clear that I don’t think we should hide that it is contraception. I guess I am just saying that they are singling out hormonal contraception medication because it has a contraceptive use even though there are plenty of medications that have multiple uses that are not subject to such scrutiny. I also think that birth control is just part of human health care. Men need to have testicle prostate checks even though these men bits are definitely involved in baby making. And viagra is treated as part of men’s whole health. Sex is ok for men but subject to judgment and control and punishment for women.
I mean for years we have been subject to higher insurance rates just because we are women.
Villago Delenda Est
You told me that Darth Vader betrayed and murdered my father.
Villago Delenda Est
@libarbarian: Bravo!
MomSense
I used some names of body parts and now I’m in moderation. Hmmm WP is ok with fuck but not testicles?
MomSense
@MomSense:
Apparently that wasn’t the word.
Cervantes
@MomSense: Contraception can’t get more effective than that.
libarbarian
@Villago Delenda Est:
No thanks. I don’t watch that Celebrity Reality TV bullshit. If any of the Hollywood phonies tried to give me their autograph, I’d just throw that shit on the ground.
Turn off the tube and welcome to the REAL WORLD jackass!!!!!
Villago Delenda Est
@Cervantes: I LOL’d.
Richard Mayhew
@MomSense: Viagra is the word that gets you into FYWP land
Villago Delenda Est
@Richard Mayhew: So, it turns out that “grease” is NOT the word.
Davis X. Machina
@Richard Mayhew: It doesn’t like — used to not like — ‘social1sm’ either, because of the embedded string.
Davis X. Machina
@Villago Delenda Est: No, but ‘Bird’ on the other hand, is the word.
C.V. Danes
@Richard Mayhew: I see your point, and I haven’t thought of it that way before. These are people, after all, who view their companies as merely a venue for vastly enriching themselves, shareholders be damned.
raven
@Davis X. Machina: Wave your hands in the air like you don’t care
SiubhanDuinne
It is such a pleasure to see DougJ back here in Juiceland.
Keith G
@SiubhanDuinne: I figured it was just somebody at the hostile stage of a fading meth binge.
WaterGirl
@SiubhanDuinne: You made me burn my lunch that was cooking on the stove! (But you are forgiven.)
First I searched for DougJ in this thread. Nope. Then I went to the front page of BJ and searched for threads posted by DougJ. Nada. But now I get it. And I am revising “burned” to “golden brown”, and it was stir fry, so I guess it’s edible either way.
Steeplejack
@Davis X. Machina:
Socialism is fine now, has been for a year or two. Two or three site updates back.
WereBear
@Steeplejack: Darn right. Nothing wrong with socialism!
burnspbesq
Apparently, Congress has already enacted single-payer.
http://balkin.blogspot.com/2014/07/congress-enacted-single-payer-health.html
MomSense
@Villago Delenda Est:
And what does it say that bringing a human being into our world is considered punishment??
Steeplejack
@WereBear:
I’d like to see more of it, frankly.
WereBear
@Steeplejack: Funny thing is, I describe it to anyone under fifty, and they go, “Sounds good!”
I believe we have to strangle the last Republican with the entrails of the last 1% to get anywhere in this country.
maurinsky
I was musing yesterday that we have an amendment to the Constitution that says that no American is required to house a soldier, but somehow we can’t quite put our arms around the idea of a woman having autonomy over her own fucking body. What a world.
Ed Drone
OT but relevant:
Fox News was recently rated at 18% “true” in content by Politifact, and is the lowest “truthy” cable “news” channel. It’s been said that they gained this high a rating by including the commercials.
Ed Drone
Corner Stone
@libarbarian: I would not have guessed that I’d find this so amusing. But I have been hard pressed not to laugh.
Thank you.
gene108
@Rob in CT:
I think ideological reasons trump any and every other reason to keep employer sponsored healthcare. At this point, with 15 years of skyrocketing premium increases and constant reduction in benefits, employers (owners/CEO’s) would be more than happy to off-load the cost of insuring employees out of their business.
The problem is the idea that “government is the problem” and “(for-profit) businesses are inherently more efficient than government” has become a religious dogma for business people, they would not trust single-payer.
Plus to have the funds to run single-payer, you would have to have a large tax increase of some kind to cover everyone under 65, which would reflexively get people to be against it, even though they’d save money in not having to directly pay an insurance company to cover everything.
At this point, the ideological barriers are trumping the other issues in implementing single-payer.
The real big issue about single-payer is how the providers are going to cope with strong price controls, as well as medical schools, because if a provider is not earning as much as they are today, the med schools will not be able to charge as much.
Businesses and consumers adjusting is the easy part.
raven
Wow, LeBron back to Cleveland!
The Thin Black Duke
@raven: WHAT?!?
Corner Stone
@The Thin Black Duke: I know, right? Who the heck would choose to live in Cleveland?
raven
LeBron James is heading back to Cleveland.
The four-time league MVP told SI.com on Friday that he is returning to the Cleveland Cavaliers.
LeBron James is returning to Cleveland with his sights set on something much bigger than championship rings. Story
“My relationship with Northeast Ohio is bigger than basketball,” James told SI.com in a first-person essay. “I didn’t realize that four years ago. I do
The Thin Black Duke
@raven: Gee, that sounds nice. Brings a tear to my eye. (sniff) The decline of Dwayne Wade had nothing to do with it, I’m sure.
Mike E
@The Thin Black Duke: Letterman’s monologue last night sorta started with this bit of news.
Mike E
@The Thin Black Duke: Of course Dave was disappointed that the RNC chose Cleveland over NYC…”hookers and bribes weren’t good enough for ya?!”
The Thin Black Duke
@Mike E: I know the Knicks never had a realistic shot at LeBron, but I betcha that Phil Jackson is hitting himself in the head with his hardbound copy of Zen and the Art of Motorcycle Maintenance right now.
raven
@The Thin Black Duke: I dunno, he’s got more money than he knows what to do with and unfinished business at home. I bet it’s a lot easier fro someone who is from there to go than someone who is not.
The Thin Black Duke
@raven: That’s a good point. (Phooey, I hate being fair. Damn liberalism!)
gnomedad
Return of the Jedi reference?
raven
@The Thin Black Duke: I’m biased. I liked him before he left, after her left and now that he’s going back. I love his game and I think he’s an all around great person.
The Thin Black Duke
@raven: True, he’s never been a hateful asshole. And let’s face it, when you’re young, full of testosterone and rich, it’s damned hard not to be. (Yeah, I’m looking at you. Mr. Bierber)
james rogers
I wonder why insurance don’t charge MORE for olives that don’t cover birth control?
Chris T.
@gene108:
They’re like the racist guy, bleeding to death, who won’t let the doctor touch him because the doctor is
Obamablack.Villago Delenda Est
@MomSense: It tells you quite a bit about the forced birthers. Not that they have the ability to reflect on precisely what it says about them, any more than the “Christians” jumping up and down and screaming about “illegal” children at the border.
Villago Delenda Est
@gene108: Well, government IS the problem. It is working to bring benefits to all without regard to the color of their skin, and that is JUST NOT RIGHT! It’s being colorblind when a healthy chunk of white Americans don’t want to be, especially when it comes to government bennies.
Furthermore, the government actually takes this “promote the general welfare” shit seriously, and the last thing that the 1% wants is actual egalitarianism (David Koch said so in an interview) because they’d no longer be special snowflakes and would have to start putting their pants on one leg at a time. Horrors!
CarolDuhart2
Another possible factor in the opposition to birth control. An employee with kids is a lot less mobile and more dependent on an employer. A person without kids who’s unhappy with a job could in theory, quit and go elsewhere more easily than one with kids. Not quite true-there are other factors-but someone might be a bit more hesitant if there are loved ones dependent upon that income that would be hard to move.
Stuart_B
@Richard Mayhew:
“Furthermore, single payer means more competition, and any business successful enough to afford a Chamber membership does not want competition.”
I think that’s the source of a lot of the contradictions we see in Republican/Conservative policy as opposed to Democratic/Liberal policy. If you’re a small or medium business successful in a not too good business climate, you’d really like to keep the status quo but hold the line on taxes and wages. A better economy can mean big companies want to take over your niche, or fledgeling might come in and take the marbles. The latter might be better for both workers and shareholders–but they’re not the ones who matter.
Theodore Wirth
Short-term profits. The same soon-to-be SCOTUS-sanctioned “person” who over 30 years ago denied coverage of the vaccination of my children and nicotine-patches for my wife.
I have had it. It’s either pitchforks or the grave. You can call me Terry or Mr. Fatalistic. Nevertheless, I welcome the recognition that shall ne’er come.
Groucho48
Well, the insurance company, due to normal churn, will lose a number of women that were covered for contraceptives, but, wouldn’t it also gain women whose contraception had been covered by other insurance plans, so, they don’t have children?
Assuming a competitive insurance company, shouldn’t it all even out?
Sondra
@MomSense:
I agree. There is also the fact that women work now, and not for chump change, in corporations which sometimes spend lots of money and time training their people for technical jobs.
They will want to be sure that their investment pays off with a sales force that produces for many years after that initial investment.
When I was hired to sell Open Heart Surgical products, my training took 6 months to a year: the serious training was outside of my own territory first. The first procedures I observed were in my trainer’s territory and he made sure to let me know that my evaluation depended on that I “wouldn’t embarrass him” by getting queasy.
I was a top earner for that company, but in the beginning, although they were politically correct when the subject came up,they wanted to make sure that I wasn’t planning on starting a family anytime soon.
What Have the Romans Ever Done for Us?
One other factor is that if insurance is tied to an employer, the individual won’t necessarily be on the same insurance when the unplanned pregnancy occurs due to switching employers. I’d imagine that’s a dicincentive to invest in preventative care in general from an insurance company perspective. If someone is going to switch providers in a year or two anyway why do anything that requires years for the payoff to occur?