Insurers do not believe contraception mandate will cut costs

Feb 22, 2012 / 02:24 am

A new survey reveals that pharmacy directors across the country do not believe that a mandate requiring insurance companies to offer free contraceptives will cut costs as the Obama administration has predicted.

“It was interesting that no one thought the mandate would offset costs by preventing unintended pregnancies,” said Rhonda Greenapple, CEO of the firm that conducted the survey. “This is in direct opposition to the rationale for mandating these services.”

The survey, announced Feb. 17, was administered by Reimbursement Intelligence, a market research firm specializing in reimbursement issues for medical and pharmaceutical companies.

Fifteen pharmacy directors, “representing tens of millions of pharmacy-covered lives,” were asked about what impact they think the Obama administration’s new contraception mandate will have on their plans.

The mandate will require employers to offer health insurance plans that cover contraception, sterilization and some drugs can induce early abortions.

Amid strong criticism that the regulation violates the religious freedom of employers that object to such coverage, President Barack Obama announced an “accommodation” on Feb. 10.

Under the revised policy, religious employers will not directly purchase the coverage but will instead be forced to purchase insurance plans from companies that are required to provide the coverage for free.

A White House fact sheet argued that requiring contraceptive coverage “saves money by keeping women healthy and preventing spending on other health services,” such as those associated with unintended pregnancies.

However, none of the firms surveyed believe that the new policy will lead to a net savings.

About 40 percent of survey participants think that the mandate will increase their costs through higher pharmacy expenditures.

Approximately seven percent believe it will increase pharmacy costs but decrease medical costs.

About 20 percent predict that their costs will not change because contraception is already embedded into their premiums, while about one-third of the participants are still unsure what effect the mandate will have.

Although survey participants were divided about the exact impact of the mandate, none believe that it will “lead to net cost savings by preventing unintended pregnancies among members.”

The survey’s findings reinforce concerns that insurance companies will transfer the cost of the controversial coverage to their clients.

One survey participant said that mandates create a “need to raise prices, change cost structures, and pass along additional costs to our customers.”

The U.S. Catholic bishops and numerous other religious groups have maintained President Obama’s Feb. 10 revisions to the mandate only appear to shift payment to insurance companies, but in reality the employer still pays at least part of the premium.

They have called for legislation to reverse the mandate and protect religious freedom.