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July 8 2015

Women Saved Money on Birth Control - Or Did They?

Hadley Heath

A new study in Health Affairs reports women spent $1.8 billion less on birth control since the ACA's mandate that insurance companies cover the drugs with no copay. This is specifically a measurement of out-of-pocket costs. It's really no surprise: If women were paying full price, or even a $20 monthly copay before ObamaCare's rule, then $0 per month is obviously a pocketbook saver. But remember, if something sounds too good to be true... it probably is.

Here's a reality check: The research, development, and production of birth controls (pills, shots, implants, IUDs) is not without cost. It's possible that powerful insurance companies can negotiate lower prices for these products with drugmakers, but I doubt that price is zero dollars. So if insurance companies are still paying something for birth control drugs and devices, where is that money coming from? Remember, your out-of-pocket costs aren't your only healthcare costs.

Just recently insurance companies put in their requests for 2016 premium rates. Some companies are seeking rate increases of "20 percent to 40 percent or more," according to the New York Times. Hm, I wonder what that has to do with "free" birth control.

Things that make you go, "Hmmm..."

As former Health Secretary Kathleen Sebelius admitted, ObamaCare plans would be more expensive in part because of the new benefits they provided. But if something is "included," that doesn't make it free. You're still paying for it. Any savvy shopper knows that.

A better way to reduce the burdens women face in obtaining birth control would be to remove this type of drug from insurance coverage altogether and allow women to purchase it over the counter. Insurance is supposed to be a backstop against unexpected costs, and women know if they are planning to buy and use birth control. It's a routine, safe drug. Far too many routine drugs and services are included in insurance plans, thanks to ObamaCare. But this only adds unnecessary third parties to transactions that could be direct between patients and doctors (or patients and pharmacists). 

As IWF's Jillian Melchoir has reported, women spend tons of money on doctors' visits (which are often required before doctors will write birth control prescriptions). According to the American Borad of Internal Medicine's nonprofit ABIM Foundation, women spent about $125 for an exam, and an additional $40 for a pap test. And here's what Jillian wrote about the potential for birth control to become very cheap if offered OTC:

Over-the-counter status would increase competition, which would exert downward pressure on the price of birth control. There’s ample precedent: Less than a year after Claritin went over-the-counter in 2002, its price had been cut in half, and today, consumers buying bulk bottles with more than 100 pills can get a month’s supply for less than $3.

The Health Affairs study points out an undeniable trend; under the ObamaCare rules women are spending less out-of-pocket on birth control. But I wonder how much less -- in total -- we might spend on these drugs if they were subject to real price competition.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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