July 21, 2014

Covering Contraception Makes Financial Sense:
Why are companies fighting to impose morals that cost them money?

When you look at the dollars and cents of having a baby, it's enough to give you an aneurism.

The average price of C-section? $50,000. Vaginal birth? $30,000.

Of course, insurers pay out less--$27,866 and $18,329, respectively. But the numbers don't lie: Covering the having of babies is expensive work.

Meanwhile, as noted in a piece on Parents, costs are going up for the people actually having babies too:
In the United States the price of delivery has almost tripled since 1996, according to an analysis done for The New York Times by Truven Health Analytics. From 2004 to 2010, the prices that insurers paid for childbirth rose 49 percent for vaginal births and 41 percent for Caesarean sections in the United States, while average out-of-pocket costs rose a whopping four times the previous price. (Meanwhile, in many other countries maternity care is completely free.)
Parents aren't the only ones affected by the costs of maternity though. Employers are too.

As recent weeks have shown, employers are more than willing to block access to contraception for employees. A report by the Guttmacher Institute says:
Skeptics and critics of the policy also claim that it imposes a financial burden on employers or insurers. The available evidence, although not entirely conclusive in the private sector, suggests strongly that coverage of contraception without patient out -of-pocket costs should not raise insurance rates and is likely cost-saving.
It's hard to find a reliable estimate of what maternity costs an employer, but look at it this way: employers have to work-share or hire a temporary employee to cover work if the employee qualifies for FMLA-protected leave, or that employee must be replaced. Both of these options cost the employer money. Employees worried over money are less likely to be productive. Pregnancy reduces productivity. Lots of medical costs raises the costs of insurance for everyone--the list of potential costs go on and on.

In contrast, Guttmacher shows us that there are many benefits--cost-savings-wise--for employers that offer contraception coverage:
The federal government, the nation’s largest employer, found that “there was no cost increase” after Congress required coverage of contraceptives for federal employees in 1998. This is significant because the population of federal employees closely resembles the privately insured Americans who are now benefiting from the contraceptive coverage guarantee. If requiring contraceptive coverage did not increase costs for the federal government, it is unlikely to increase costs for private-sector health plans. Studies comparing the cost-effectiveness of contraceptives find that all methods save insurers money, after the costs of unintended pregnancies averted are accounted for—with the most effective methods, such as IUDs and implants, being among the most cost-effective. More specifically for private employers, both the National Business Group on Health (a membership group for large employers) and Mercer (an employee benefits consulting firm) published studies recommending contraceptive coverage as a cost-saving option for health plans—both because of the savings from fewer insurance claims for pregnancy-related care and from improved employee productivity. Likewise, a 2007 National Business Group on Health report calls for coverage of the full range of prescription contraceptive services and supplies at “zero cost-sharing…to avoid real or perceived financial barriers, and to increase utilization.” Relying on an actuarial analysis from PricewaterhouseCoopers, the report predicts that savings from this coverage will exceed the costs. Buttressing this private-sector evidence is a wealth of public-sector data. Data from the Guttmacher Institute show that by helping women avoid unintended pregnancies, public funding for contraceptive services in 2010 resulted in net public savings of $10.5 billion, or $5.68 for every dollar spent. Those savings accrue to Medicaid within the first year of providing contraceptive services. Similarly, a 2010 Brookings Institution review of government programs to reduce unintended pregnancy found that publicly funded family planning efforts have been effective and cost-saving, and “would be even more so if they could increase the use not just of contraceptives, but of long-acting, reversible contraceptive methods.
With so much in favor of providing coverage, there's only one true reason why employers wouldn't want to: they want to control the behavior of their employees. They are attempting to enforce their own belief system on their employees. Guttmacher touches on that too:
Anti-contraception advocates have, for instance, attempted to deny that contraception reduces unintended pregnancy, that it yields significant health benefits for women and families, and that it works by preventing pregnancy rather than ending it. 
The misinformation, the refusal to admit that this makes business sense--it's obvious that the opponents of birth control coverage are currently winning a losing battle. They may satisfy their need to force their morals...

But they're going to wind up paying with their pocketbooks.

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