Myth v Fact: Your Birth Control Is Not Free

Pink PillHappy Obamacare year, fellow socialist-sympathizers! ‘Tis the year of free everything! Free government run health care! Free death panels! Free birth control for all the slutty, slutty sluts! Free, free, it’s all free!

Actually, none of it is free. Sorry. No free-ness. It all costs money. Some of it is your money, some of it is other people’s money but for every medical service there is a charge and someone pays up. Obamacare doesn’t give out any free healthcare. The closest thing is the expanded Medicaid rolls in some states so there is premium-free health care for qualifying people but there’s still money changing hands.

Here’s a quick refresher on the idea of medical risk pools. There are several kinds: there’s private insurance companies, Medicaid, and Medicare. In all of them, a large group of people pays into a giant pot of money that can be used for qualifying medical expenses that members of the group accrue. For Medicare, for instance, every working American pays in today and withdraws benefits after age 65 and the federal government pays out the benefits. For Medicaid, it’s a combination of state and federal money that’s paid by taxes and the benefits go to low-income residents of various states, with such restrictions as the states see fit to set up. And with private insurance it’s every policy holder for an insurance company paying in through premium dollars and the company pays out for subscribers’ expenses.

Still with me? OK. So, what we have is a lot of big pools of payees putting money into a risk pool. Let’s pretend we’re dealing with Blue Cross Blue Shield for now. And let’s make the numbers tiny so they’re easier for me to type. We’ll pretend BCBS has 100 policy holders, and they each pay an annual premium of $100. That means for 2014, BCBS has $10,000 to pay out. Maybe 25 people of the 100 will not see a doctor at all and will get $0 in benefits. 50 people will have medical expenses costing $50. And another 25 will have expenses costing $200. And all of them will get their expenses paid, regardless of what they put into the pool. That’s the sharing part of “shared risk”.┬áHealth insurance isn’t like a savings account where you get out what you put in; rather it’s a socialized pool of funds provided by a larger group and used as individual needs arises. The insurance company keeps the whatever is leftover as profit.*

GAH! It IS socialism! Thanks, Obama! Oh wait. It always was socialism. Never mind.

Now that we have established that everyone with insurance is paying in at some level (even Medicaid recipients have some skin in the game in co-pays and taxes), we can understand that everyone is paying for their own health care to some degree. No one is getting it for free. Money is flowing from the beneficiaries of health care to the providers of health care, it’s just happening through a screwed-up and overly complicated process of employer-employee premium cost sharing, insurance companies as health care middle-man who sets prices, and the occasional government program collecting and doling out money. It’s ridiculous and inefficient and leads to distorted pricing and inflated health care costs at all levels. But I digress.

Now, many very angry people have been complaining that one of the provisions of Obamacare is free birth control or government-issued birth control financed by tax dollars. They feel that they are being conscripted into service in the Slut Support Corps of the Secular Humanist Army of Jesus Haters. They need to simmer down for several reasons. One reason is, insurance coverage of birth control is nothing new. Anyone who has ever paid into an insurance shared risk pool has probably had at least a penny or two get distributed to fill a birth control prescription for someone other than themselves. The other reason is, it’s not free. It’s not coming from the government. It’s coming from the pharmaceutical companies who sell it to the pharmacies, who then sell it to patients. Only instead of the patients paying cash money at the pharmacy counter, they flash an insurance card and the pharmacy uses that information to get the insurance company to pay them later. The insurance company pays for the birth control using – you guessed it! – premium dollars from the shared risk pool that the patient and/or her employer paid into! So the slutty slut and her boss paid for the birth control, not you. Probably. Well, maybe a little. But that birth-control-taker probably paid for the time you needed an x-ray after that skiing accident last year so it all comes out even in the end.

As for tax dollars, your tax money is probably not paying for Medicare recipients to get birth control because eligibility for Medicare happens after menopause for the vast majority of women. Medicaid has always covered birth control, to the best of my knowledge so any tax dollars paying for low-income people to stay not-pregnant is not Obama’s fault. (And really, is it so bad to assist a person with limited financial means in avoiding a pregnancy that could be a major crisis for her family? I tend to think not.)

Again, none of this is new. The only part that’s new to Obamacare is the fact that birth control is classified as preventative care and is therefore statutorily required to a) be available under all new insurance plans unless the policy holder is a religious institution such as the Catholic Church** and b) paid for entirely by premium dollars, and without the cost-sharing measure known as co-pay wherein a patient pays a small portion of the fee for service upfront. But no co-pay is not the same as free. Money, as I said, changed hands. Just not at the pharmacy counter.

So, in conclusion birth control is not free. And the government isn’t handing it out on street corners. And anyone who says otherwise is either misinformed or lying.

 

*Actually, they can’t keep all of it as profit any more. They used to be able t do it so they had incentive to deny as many claims as possible to maximize their share at the end of each year. Under Obamacare, they have to pay 85% of premium dollars out as medical coverage. If they don’t spend that much, they have to send remainders back to subscribers as a rebate at the end of the year.

** The exemptions to birth control coverage actually extend beyond religious organizations to religiously affiliated organizations such as Catholic hospitals or universities. The administration created a loophole around that so that the organization doesn’t pay for the birth control coverage by its policy-beneficiaries can still get them and somehow the insurance company swallows the cost. I don’t actually understand the mechanism very well because I haven’t studied it very hard. This is not the same as the private employers like Hobby Lobby who are suing to be allowed to restrict birth control coverage because the business owners don’t believe in it. That’s a whole different nest of vipers and the Supreme Court will be deciding on that later this year.

Photo credit: iStock

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2 comments for “Myth v Fact: Your Birth Control Is Not Free

  1. January 6, 2014 at 10:29 am

    I forgot about that point in your first asterix, which maybe shows what a bad job Democrats have been doing in selling this thing. The fact that insurance companies now have less incentive to deny care is huge

  2. Leonard Cahnmann
    April 1, 2014 at 6:18 pm

    Isn’t birth control less expensive than the cost of prenatal care and delivery to say nothing about covering an additional family member on a family plan once the baby is born. Therefore a plan that covers BC should have a lower premium than one that does not cover BC. The same argument could be used for coverage for legal abortions.

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