Biden and Harris Propose ‘Free’ Condoms Covered by Insurance Companies
A new proposal from the Biden administration would require health insurance companies to fully cover the costs of over-the-counter birth control, including condoms. The proposal represents “the largest expansion of contraception coverage in more than a decade,” said Vice President and 2024 presidential candidate Kamala Harris in a statement.
“This new action would help ensure that millions of women with private health insurance can access the no-cost contraception they need,” President Joe Biden said.
The Affordable Care Act (ACA) already requires private health insurance plans to cover prescription birth control without direct cost-sharing in the form of things like co-pays. The administration’s new proposal—a test case for expanding coverage for all sorts of over-the-counter preventative services—would expand the ACA’s requirement to nonprescription contraceptives as well.
This is a bad plan, economically and politically.
Economically Illiterate
Democrats push plans like this under the guise of making birth control free or more affordable. But just because people aren’t shelling out cash for contraception at point-of-sale doesn’t mean they won’t be paying for it in other ways.
Every time insurance companies are forced to cover more services without cost-sharing it raises their cost of doing business and these costs get passed on to consumers in the form of things like more expensive plans overall, higher deductibles, and higher co-pays for other services. Even for people who take advantage of the “free” contraception, it may simply shift their costs. And for people who don’t need covered contraception, it’s an especially bad deal.
Advocates of schemes like this one ask people to think of women who couldn’t otherwise afford contraception. They might even appeal to cost savings that supposedly accrue by preventing unwanted pregnancies. But this argument falls flat in myriad ways. First, because (private and governmental) programs already exist to help low- or no-income people access free or low-cost birth control options. Second, because plans like these still rely on insurance and many individuals—particularly those in especially vulnerable groups, like undocumented immigrants and people in abusive relationships—either lack health insurance coverage or may have reasons not to use it to purchase contraception. Third, by mandating “free” insurance coverage, requirements like these give companies no incentive to keep costs low.
A big part of the reason why medical care in the U.S. is so expensive is because it’s completely removed from the free market; everything goes through middlemen and a convoluted insurance system, so health care providers and pharmaceutical companies and the like have no accountability to consumers and no reason to compete on the basis of affordability. To truly lower costs, the government should allow more contraceptives to be sold over-the-counter without being subsidized by insurance so manufacturers have to compete in a free market and have an incentive to worry about price.
Adding all sorts of over-the-counter contraception to the list of “free” things that insurers must provide will ultimately raise the cost of all sorts of contraception, making it less affordable at point-of-sale for people purchasing without insurance and driving up insurance and health care costs overall even for those with insurance coverage.
This isn’t just some crazy libertarian conspiracy. In the proposed rules submitted to (but not yet officially published by) the Office of the Federal Register, the government itself acknowledges “the possibility that increasing coverage without cost sharing for recommended preventive services…could lead to greater demand for those services and potentially higher prices charged by providers,” which “could result in higher costs to consumers, both in the form of higher premiums for people with insurance and in the form of higher out-of-pocket costs for people who do not use insurance coverage to obtain OTC contraceptive products.”
Politically Toxic?
Avowed Democrats might cheer proposals like this one from the Biden administration. But avowed Democrats are already going to vote Democrat. The real question, politically, is how a policy like this plays among independents, swing voters, and moderate conservatives who might consider voting for a Democrat in certain circumstances (like, say, an election year where the GOP’s presidential candidate is w
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