Contraception Conundrum

In case you missed it:

AEI resident fellow JD Kleinke, an expert on health care business strategy and entrepreneurship offers a fresh perspective on the recent fracas over insurance mandates to cover contraception.

Recent controversies over contraception can best be summarized as: female employees claim a right to certain FDA-approved birth control and employers claim that a mandate to provide those benefits violate their First Amendment rights.

Kleinke explains that both claims are valid, but the real problem is that employment and health insurance should have nothing to do with each other.

Among his key points:

  • Tax-advantaged status of employer-sponsored insurance mean executives make decisions about benefits "[E]xecutives from many large corporations that self-insured their health plans--and thus could tailor those benefits all the way down to monthly pill counts--t[ake] time out of their busy days to argue over, among other pressing health benefit design matters, the monthly number of Viagra tablets they would cover for their workers. Seriously."
  • More expensive health care means less money spent on wages "[W]orkers' productivity increases over the past 30 years have not translated into cash raises. The rising cost of all employee benefits--in particular health benefits--has diverted compensation resources away from wages and straight into the healthcare system."
  • Obamacare reinforces the problem of healthcare being tied to employment "Unfortunately, the fundamental economic dysfunctions of an employer-financed healthcare system--and all the inevitable collisions between an employer's moral position and an employee’s personal privacy--are not going away any time soon. A cornerstone of the Obama health reform plan involves cramming still more people into employer-based health plans, thus guaranteeing a future filled with more showdowns like today’s contraception conundrum."
  • Market-based reforms can alleviate some of these problems "The next best solution to this problem is the stealth one the market has slowly been introducing since the early 2000s, when command-and-control managed care started giving way to more consumer-oriented forms of health insurance. Higher deductible insurance, Health Savings Accounts, and more employee cost-sharing for drugs mean that low-cost, routine medical items like birth control can once again become the business not of American business, but of American women. Which is precisely how it was at the end of World War II, when health insurance truly was a "fringe" benefit; the standard deductible was $200 ($1,881 in today's dollars, let alone healthcare dollars, which are easily double that); and you hoped you never actually needed it--like fire, auto, or homeowners’ insurance today."


J.D. Kleinke was instrumental in the creation of four health care information organizations and writes on the business of health care and insurance. He can be reached at
jd.kleinke@aei.org.

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About the Author

 

J.D.
Kleinke
  • J. D. Kleinke, an expert on health care business strategy and entrepreneurship, was instrumental in the creation of four health care information organizations. He has also advised established and start-up companies on health care business, product and technology strategy. Mr. Kleinke writes on the business of health care, health insurance and benefits as well as about doctors and the culture of medicine. His books include Bleeding Edge: The Business of Health Care in the New Century (Jones & Bartlett Learning, 1998), Oxymorons: The Myth of a U.S. Health Care System (Jossey-Bass, 2001), and Catching Babies (Fourth Chapter Books, 2011). At AEI, he is studying the interplay between health policy, health care market dynamics and health venture formation; the influence of information technology and medical technology on the overall health economy; and the impact of medical culture on health care organizations, markets and public health.

  • Phone: 202 862 5846
    Email: jd.kleinke@aei.org
  • Assistant Info

    Name: Catherine Griffin
    Phone: 202 862 5920
    Email: catherine.griffin@aei.org

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