Yesterday's announcement by the President that all insurance companies simply had to make contraception, et al, free to everyone has pleased some of the lap dog Catholics who support him, like EJ Dionne and Sister Carol Keehan. To be blunt about it, how stupid are these people?
The Wall Street Journal points to the total and utter bogusness:
... you almost have to admire the absurdity of the new plan President Obama floated yesterday: The government will now write a rule that says the best things in life are "free," including contraception. Thus a political mandate will be compounded by an uneconomic one—in other words, behold the soul of ObamaCare.
Under the original Health and Human Services regulation, all religious institutions except for houses of worship would be required to cover birth control, including hospitals, schools and charities. Under the new rule, which the White House stresses is "an accommodation" and not a compromise, nonprofit religious organizations won't have to directly cover birth control and can opt out. But the insurers they hire to cover their employees can't opt out. If that sounds like a distinction without a difference, odds are you're a rational person.
Say Notre Dame decides that its health plan won't cover birth control on moral grounds. A faculty member wants such coverage, so Notre Dame's insurer will then be required to offer the benefit as an add-on rider anyway, at no out-of-pocket cost to her, or to any other worker or in higher premiums for the larger group.
But wait. Supposedly the original rule was necessary to ensure "access" to contraceptives, which can cost up to $600 a year as Democratic Senators Jeanne Shaheen, Barbara Boxer and Patty Murray wrote in these pages this week. The true number is far less, but where does that $600 or whatever come from, if not from Notre Dame and not the professor?
Insurance companies won't be making donations. Drug makers will still charge for the pill. Doctors will still bill for reproductive treatment. The reality, as with all mandated benefits, is that these costs will be borne eventually via higher premiums. The balloon may be squeezed differently over time, and insurers may amortize the cost differently over time, but eventually prices will find an equilibrium. Notre Dame will still pay for birth control, even if it is nominally carried by a third-party corporation.
This cut-out may appease a few of the Administration's critics, especially on the Catholic left—but only if they want to be deceived again, having lobbied for the Affordable Care Act that created the problem in the first place. The faithful for whom birth control is a matter of religious conviction haven't been accommodated at all. They'll merely have to keep two sets of accounting books.
Yesterday's new adventure in damage control and bureaucratic improvisation makes the compliance problem much worse. There is simply no precedent for the government ordering private companies to offer a product for free, even if they recoup the costs indirectly. Why not do that with all health benefits and "bend the cost curve" to zero? The shape of the final rule when the details land in the Federal Register is anyone's guess, including the HHS gnomes who are throwing it together on the fly to meet a political deadline.
One major problem will be how the rule applies to large organizations that self-insure. Arrangements in which an employer pays for care directly and uses insurers to manage benefits and process claims (not to take on insurance risk) account for the majority of the private market. In these cases there isn't even a free lunch to pretend exists.
And the last point is a major one - most large organizations self-insure and use the insurer to manage and administrate benefits, so the insurer only pays on large claims (what's called a stop loss). The small claims - say under $25,000 or $50,000 - are paid by the organization themselves, from a fund they've set aside.
Hit the link for the whole editorial.