Last week, the White House announced health insurers would have to cover the cost of providing free birth control to employees of religious groups as part of the Affordable Care Act, which requires health insurance plans to offer contraception without charging a co-pay, co-insurance or deductible as of August 1. The rationale was that any added cost would be offset by fewer unwanted pregnancies.
A new survey, however, indicates that health insurers disagree - 40 percent say that monthly costs per member will rise through higher pharmacy expenditures within two years after the ACA preventive care requirement goes into effect. Another 7 percent expect higher pharmacy expenditures but lower medical costs, while 20 percent say costs will balance out and 33 percent are unsure.
"The real question is whether (the preventive requirement) will really save money in the long term by preventing pregnancies, which are expensive. But at this point, most payers are not convinced that they're going to save money," says Rhonda Greenapple, ceo of Reimbursement Intelligence, a market research firm that queried 15 large health insurers that cover tens of millions of Americans.
All of the health insurers reported that their customers - which include employers and unions, among others - currently offer to cover contraception in some fashion, although employees are asked to make co-payments. These typically vary, depending upon the product, such as whether a birth control pill is a brand-name med or a generic.
For drugmakers, the mandate may prove profitable, but could also pose a "double-edged sword," according to Greenapple. On one hand, a mandate suggests the possibility of additional prescriptions being written for women who may not otherwise opt for the medications. However, insurers may then pressure drugmakers for steeper discounts.
Not everyone, however, believes insurers will suffer. "In the grand scheme of things, it doesn't seem like a material cost to be added to the managed care company or the employer," Stifel Nicolaus health insurer analyst Tom Carroll told Reuters. "Any services that are mandated are ultimately covered in the premium, either to the specific group or to the system in general." In other words, increased premiums would cover increased costs.
pic thx to treyevan on flickr