Decision could raise premiums

President Obama’s compromise on birth-control coverage could shift costs on to people who have insurance.

Under Obama’s new plan, health insurers are required to cover contraception for people who work at religious institutions such as Catholic hospitals and universities. Those employers don’t have to pay for the coverage, and neither do the employees.

But birth control still costs money, and insurance companies will likely build those costs into the premiums they charge.

The additional cost will be small, and broader access to contraception could save money in the long run. Birth control is inexpensive, not to mention far cheaper than the cost of a pregnancy and caring for a child. Senior White House officials said Friday that the new policy will end up being “cost-neutral” because of those savings.

A new report from the Health and Human Services Department says the shift in who pays for contraception coverage probably won’t lead to an overall increase in the cost of healthcare.

“While the costs of contraceptives for individual women can be substantial and can influence choice of contraceptive methods, available data indicate that providing contraceptive coverage as part of a health insurance benefit does not add to the cost of providing insurance coverage,” the report states.

The White House’s new policy was based, to some extent, on a similar law in Hawaii. Both mandates requires employers to cover contraceptive services, but the employees of religious institutions turn directly to their insurance companies instead of having contraception coverage built into their plans.

In Hawaii, though, insurers can charge employees a small fee for the extra coverage. The charges are limited to roughly the amount it would have cost to offer the same benefit as part of the employee’s plan. The federal version, on the other hand, says that contraception has to be provided without a co-pay or a deductible. 

About 99 percent of women have used birth control at some point in their lives.

And administration officials said Friday that they won’t let insurers charge religious employers a higher premium to cover the cost of contraception that the insurer knows it will ultimately have to provide.

That means insurers will have to find the money for contraception elsewhere — by spreading it across their plans' premiums.

According to the HHS report, Hawaii’s experience has not resulted in a net increase in premiums. The program that provides healthcare benefits to federal employees also did not need to raise premiums for any of its plans after adding coverage for contraception, HHS said.