Will contraceptive rule increase insurers' costs?


Although the U.S. Department of Health & Human Services believes its proposed rule regarding contraceptive coverage for religious employers will be cost neutral for insurers, some industry executives and analysts aren't so sure.

The concern is that when religious employers opt out of the reform law's mandate requiring them to offer free contraceptive coverage insurers will end up paying for those costs, reported AIS Health.

Under the proposed rule issued in January, insurers would have to offer stand-alone policies that cover contraceptive costs to religious nonprofit companies that object to the reform law's contraceptive coverage mandate, FierceHealthPayer previously reported. Although insurers would cover those contraceptive costs, HHS said it wouldn't increase their financial burden because it would lead to fewer births.

But insurance execs point to all the steps they must take to provide stand-alone contraception policies. When their religious employer clients opt out, insurers would be required, for example, to notify the new coverage options to members who work for those religious employers.

"When the group certifies that it qualifies for the exemption, we must send out an individual notice to every member of the group (administrative services only and fully insured) regarding the law, and their individual policy, and their new schedule of benefits. We do not yet know the cost, but it could be significant," Florida Blue's Elana Schrader, vice president of marketing for employer markets, told AIS Health.

Plus, insurers would have to set up and obtain state approval for new individual insurance products, which could become big administrative hassles. Regence Blue Shield, for example, believes "setting up individual policies for contraceptive coverage would be a significant undertaking."

Mac McCarthy, president of McCarthy Actuarial Consulting, agreed. "You'd have communication costs, premium-processing costs and insurance policies must be filed and approved by the state, so your legal department and contracts department must work on this," he told AIS Health. "And you're going to get claims, so you need a claims system to issue checks, fund transfers to pharmacies--and there probably will be more doctor visits because someone has to prescribe [contraceptives]."

To learn more:
- read the AIS Health article

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