Published March 01, 2012
On Thursday, Senate Democrats narrowly voted down an attempt to end President Obama's mandate that Catholic organizations provide their employees with abortions and contraception for no co-pay or deductible.
Democrats pulled out the heavy artillery, sending out an e-mail last night charging that Republicans want to “tear down access to better care.” The campaign linked this vote to the specter of Republicans “bann[ing] many common forms of birth control, including the pill, and fertility treatments such as in vitro fertilization.”
Obama’s so-called reversal a couple of weeks ago that switched mandates from religious organizations to insurance companies that they buy policies from changed nothing. This cynical ploy can only work if women and the Catholic Bishops don't understand really basic economics.
Catholic organizations are upset that they might be forced to pay for abortions and contraception. Obama's solution?
The president originally wanted to mandate that Catholic organizations buy insurance policies with those services offered.
Now he instead proposes that health insurance plans must always cover abortions and contraception, and that these services must be provided for free.
By Obama's reasoning, if insurance companies are banned from charging for abortions and contraception, Catholic organizations aren't really going to be forced to pay for their costs.
Do Obama’s policy wonks really think that forcing the only available insurance plans contain that coverage is really different from mandating that someone purchase abortion and contraception insurance coverage?
Are Catholic organizations supposed to feel better when it is the insurance companies that are told what they can sell rather than the Catholics who are told what they can buy?
Many news organizations focused on self-insured Catholic organizations as the difficulty in Obama’s plan. In that case, since those Catholic organizations are insurance companies, regulations forcing insurance companies to cover abortions and contraception would be forcing Catholic organizations to provide that coverage.
But what the media fails to understand (or at least they won’t tell their readers) is that telling someone they can only buy certain policies is no different than only allowing those polices to be offered.
A couple of weeks ago, Obama explained his policy this way:
"The insurance company – not the hospital, not the charity – will be required to reach out and offer the woman contraceptive care free of charge, without co-pays and without hassles. The result will be that religious organizations won’t have to pay for these services, and no religious institution will have to provide these services directly. Let me repeat: These employers will not have to pay for, or provide, contraceptive services. But women who work at these institutions will have access to free contraceptive services, just like other women, and they'll no longer have to pay hundreds of dollars a year that could go towards paying the rent or buying groceries."
The Washington Post described the policy as “quite clever.” But does a regulation banning insurance companies from charging for abortions and contraception really mean that "religious organizations won’t have to pay for these services"?
No, of course not.
Even if you don't allow insurance companies to explicitly charge for these services, their costs will rise and the price that they charge for insurance policies will go up.
Jack Lew, Obama's new chief of staff, claims that mandating free coverage for abortions and contraception would lower health care costs -- a sort of win-win. But there is an obvious problem here if offering free abortions and contraception really did lower health care costs: why would government have to mandate such coverage? Insurance companies would all try hard to sell coverage that would both lower their costs and give patients more services at the same time.
There is a simple reason why a $10 pack of condoms isn't covered 100% by insurance. Suppose the $10 was completely reimbursed, the cost of insurance would go up by more than $10. The $10 increase is obvious since if the insurance has to pay out $10, they have to charge $10 more for insurance. More paperwork means even higher costs. Someone has to check the forms to make sure that there is no fraud and give the reimbursement approval. It doesn't make any sense for insurance to cover low-cost items.
Everyone wants free everything. As Mara Liasson said on "Fox News Sunday," recently "[the Obama administration] believes that the majority of women, even Catholic women, are on their side when it comes to [whether] contraception [should] be available."
Jack Lew made the same point: "There are some who just oppose [the idea] that women should have the right to contraception. We don't agree with that."
But it isn't a question of whether contraception -- such as condoms -- are available, though this is what the Obama administration wants everyone to think. Supposedly no free condoms means women will go without contraception.
Offering free contraceptives is an obvious ploy for female voter, but for it to work, women have to believe that they can get something for nothing. This has been Obama's strategy for ObamaCare all along. -- He's always promised lower insurance costs while mandating all sorts of new coverage.
Yet, even if Americans don't understand economics, they need only look at Obama's broken promises to lower insurance costs. During the first year after ObamaCare was passed, the average annual cost for employer-sponsored health care plans went up by 9 percent.
John R. Lott, Jr. is a FOXNews.com contributor. He is an economist and co-author of Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future (John Wiley & Sons, forthcoming March 2012).