15 Feb 2012

I Hope Everyone Who Likes This NPR Story Uses Contraception

Economics 13 Comments

Just listen to this NPR story on the contraception “compromise”:

It’s hard to know where to begin. First of all, let’s say you believe the White House line, that this new mandate will provide contraception to millions (?) of employees who don’t have to pay for it, and that no one–not the employer and not the insurer–will see higher costs because of it. Umm, so the White House was really stupid last week, when it was going to implement a plan that achieved the same results but imposed huge costs on a bunch of employers, right? And they can’t say that they just figured out this magical solution within the last 7 days; they are saying it is “well known” that contraception contains costs.

OK after you’re done gouging out your eyes from that issue, consider the fact that the NPR story didn’t interview an outside economist to ask whether these claims made any sense. Suppose the White House had come up with a “compromise” that said, “We will distribute a bar magnet to any woman who requests it, as a different means of avoiding unwanted pregnancy. We have checked with the Vatican and they don’t oppose this ‘Maxwell planning.’” I’m guessing, in this case, NPR would have gotten comments not just from the White House official in charge of the magnet plan, and not merely an anonymous insurance industry insider, but also–oh I don’t know–maybe a medical doctor to evaluate the biological claim. So since the White House is now making a claim about a government policy’s impact on costs… Ah, if only there were a group of professionals who thought about such things. I imagine such a hypothetical group of professionals would find the “compromise” to be Orwellian (see Rizzo and Landsburg and Mankiw).

Now if you read any of those three articles, you’ll see the problem: the two policies are effectively the same policy. Whether you force Catholic employers to pay for contraception, or whether you force Catholic employers to provide insurance that in turn has to cover contraception, is effectively the same policy. That’s why I’ve been putting “compromise” in quotation marks. The White House claims that no, it’s not the same policy, because it will make it illegal for the insurers to raise prices in order to cover their now-higher costs, but the economists won’t take their verbal assurances on the matter.

Now what’s truly amazing in this episode, is that the NPR story actually does let its listeners know that there is some question as to whether the White House plan can work. Specifically, some employers self-insure, meaning they take in health insurance premiums from their employees and put them into a big pot of money, out of which they pay medical claims. So for those employers, the White House is effectively saying, “You don’t have to pay for contraception, because you will pay for it. And don’t worry, if we catch you trying to make yourself pay for it, we won’t let you.”

And here is where the NPR story at least allows a critic to object, that maybe this doesn’t make sense. But it’s not definitive, mind you; it’s just one competing voice, against the authority of the other people quoted in the story.

P.S. I am pretty sure I’ve correctly crossed the t’s and dotted the i’s in the above, but I am not taking the time to go back and carefully read all the source material. I’m not Catholic. So let me know if I’m fudging the actual details…

13 Responses to “I Hope Everyone Who Likes This NPR Story Uses Contraception”

  1. Dan says:

    I was riding in a cab out here in Los Angeles over the weekend and the driver was listening to NPR talk about this issue. I started mocking them in the back seat and we started to talk about libertarianism. By the end of the ride he gave me a pen and paper to write down some book recommendations and websites he and his family could check out. So some good came out of this ridiculousness.

    • Invisible Backhand says:

      “By the end of the ride he gave me a pen and paper to write down…”

      Ah, the well known libertarian street smarts served you well again…

  2. Tel says:

    QTau comes to pretty much the same conclusion, not exactly the same line of reasoning.

    http://blog.qtau.com/2012/02/holy-insurance.html

    I think Obama has made a strategic blunder here. If you follow the Catholic blogs, they are pretty cranky about it… not just cranky about the scheme not working out for them, but the contempt of such a blatant attempt to mislead.

    http://the-american-catholic.com/2012/02/10/the-hhs-accommodation-lie-to-me/

  3. Strat says:

    Peter Schiff has fun with this issue:

    http://www.youtube.com/watch?v=U73xKgbXh68

    Best part: Soon clowns will be making balloons out of condoms.

    • MamMoTh says:

      I can imagine Peter Schiff blowing a condom.

      • Anonymous says:

        I’m sure you, late at night, alone, struggling…

        • MamMoTh says:

          Q: How does Anonymous take off a condom?
          A: Farting

          • Bob Murphy says:

            OK guys, party’s over. I’m deleting anything else in this genre.

      • Richie says:

        I can imagine you trying to imitate it.

  4. joshua says:

    It’s all just clever game theory, Bob.

    1. Obama proposes something outrageous, sparking a huge outcry from the right.
    2. Obama proposes a technicality that is really no different, and the right still doesn’t like it.
    3. Obama claims he’s trying to compromise but the other side just won’t do it!

  5. Mario Rizzo says:

    After we clear all the deception away, I think Obama wins this one. The overwhelming majority of Catholics have no moral problems with “artificial” birth control. So with the fig leaf of a “revised rule” Obama may have placated the effective political opposition. Except that it CLEARLY does not work for those institutions that self-insurance (like many universities). But they may stand quiet.

  6. Andrew says:

    Doesn’t it even go further than this though? Before, at least some Catholic employers were exempt from providing contraception as part of the health care coverage they provided. Now, it seems that even those institutions that were previously exempt are, in reality, no longer exempt. So, unless I’m missing something, not only did he change nothing and call it a compromise, he actually made it worse, and called it a compromise.

  7. Edwin Herdman says:

    And on cue:

    http://www.npr.org/2012/02/15/146908587/does-contraception-really-pay-for-itself

    This doesn’t invalidate Bob’s point, of course. Nor does [url=http://thedianerehmshow.org/shows/2012-02-02/catholics-contraception-and-new-health-care-law]this[/url] roundtable, much earlier from February 2nd – the money side is mentioned in passing in a few places, particularly where Julie Rovner of NPR alludes to the Department of HHS deciding that it is cheaper to have contraception, but this is taken as received wisdom and (as is Bob’s concern) doesn’t say who it is cheaper for or where the money comes from. It’s pretty clear that NPR (and probably much of the rest of the media) tends to take for granted that a topic like this needs “a Catholic lawyer, somebody from a league for women’s and / or religious freedom rights, and a legal scholar” and that’s all that needs to cover the debate.

    At about the same time as the Diane Rehm roundtable, the insurance industry said that they didn’t like the precedent (despite giving contraception benefits for “free” in some states to overcome similar religious and personal freedom disputes), which should have clued careful listeners in that the looming compromise would be a creeping compulsory addition to the insurance mandate, to be made right somehow or other. I think the insurance industry’s obvious complication is that they would like to be more competitive for healthy workers, and adding on compulsory additions like this reduces their latitude in setting premiums. That, however, seems a reasonable area for calling for a legal compulsion, especially when compared to the problems with limiting the freedoms of the insured.

    This is where NPR has left off. There is, of course, more to it than simply making a hand wave and the insurers will magically take care of everything.

    What galled me is that none of them saw the obvious point, which is that the employers should give a lump sum as a “benefit” or whatever you like, and at that point they are separated from direct planning of their employees’ health plans. At some point the Catholic objection to paying for things they disapprove of has to be laid to the side – there is no recognized right of employers, for example, not to pay somebody merely because the person bought something the employer didn’t like. Imagine the uproar if a Muslim charity tried to fire somebody for buying some booze out of their paycheck, for instance. This seems to be perilously close to the reasoning the Catholic bishops seemed to be advocating, trying to see how far they could push against the compromise as a financial shell game.

    I don’t think that there is a concern, as there was with the national health care debate, that direct choice for the insured would lead to insufficiently large pools funding contraception (or any other individually-tailored plan). The problem seems to be – how much of an additional cost does this impose, and how is it distributed? It obviously isn’t intended to be taken out of the funds already allocated to uncontroversial medical benefits. This returns to the Catholic objection that it is an ‘accounting shell game’ because if you have to pay more for an additional service, on top of other health services, it is obvious that the extra payment from employers is going to the new service.

    Ultimately, the question seems to boil down to employers (and / or insurers) being asked to pay more money, and the current system not allowing enough separation between the employer and the policy details for that to be uncontroversial. If there was enough separation, then we would be able to more clearly see the economic aspects.

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