IOM Birth Control Decision: No Increased Medical Costs

Today’s Managing Health Care Costs Indicator is Zero

This week’s recommendation by the Institute of Medicine that birth control should be covered by health plans without patient cost-sharing is bound to cause political fireworks.  Groups that oppose abortion will object because some forms of birth control (IUDs and ‘morning after’ pills) interfere with uterine implantation after conception.  Religious groups will object that mandating that they cover birth control violates their religious doctrine.  Those who believe that patients should pay at least something for services to be sure they value them appropriately will object to birth control having no cost share at all.

I expect we’ll also hear complaints that this is an unfunded mandate – and one more way that health care costs will be increased by the Affordable Care Act.

However, these potential complaints appear to be unfounded. 

The HR consulting firm Mercer did a study in 2000 that showed that medical claims costs went down when employers covered contraceptives.  That’s because pregnancies and abortions are expensive – and oral contraceptive pills are not.  This study was done when many commonly-used birth control pills had not yet gone generic.    

The Washington Business Group on Health (now the National Business Group on Health) also did a study in 2001 suggesting that the direct and indirect cost of plans that did not cover contraception was 15-17% higher than plans that did.   This is because of short term disability claims due to pregnancy.

The federal government’s Office of Personnel Management found no increase in total cost of the federal Employee Health Benefit Plan when it started to cover birth control in 1999. 

These studies have all been cited extensively by those advocating for the IOM to recommend full coverage of birth control, including the National Women’s Law Center and the Guttmacher Institute.

Most mandates do increase the cost of health care.  Covering birth control, though, does not appear to raise overall medical claims cost.