The HHS “Compromise” Confirms that Obamacare was a Mistake

The Obama administration has found the policy equivalent of alchemy. Employees of religious organizations will receive contraception coverage. And neither the individuals nor the groups will have to pay for it. It’s magic.

Otherwise known as making the insurer pay.

On Friday, February 1, the Department of Health and Human Services announced its new rule mandating coverage of contraception. Responding to the furor that the proposal first raised, HHS Secretary Kathleen Sebelius proclaimed that the draft regulation would guarantee free coverage “while respecting religious concerns.”

The latest iteration does clarify the exemption, expanding its reach a bit, to some hospitals, social service groups, and universities with religious affiliations. But there would be no protection for other organizations, as well as employers or employees in secular work who happen to be religious. As before, freedom of conscience is sacrificed for the administration’s ideological objectives.

Equally bad is the means of “protection.” Chiquita Brooks-LaSure of HHS helped write the language and explained: “Under the proposed rule, insurance companies—not churches or other religious organizations—will cover contraceptive services.” Employees at a religious institution could go to their group’s insurer and receive a separate plan priced at zero dollars. Insurers cannot “impose any premium, fee or other charge” for the coverage.

Thus we have policy alchemy. Uncle Sam mandates benefits. Employers do not have to provide coverage for the benefits. Employees do not have to pay for coverage for the benefits. The insurers must provide coverage but cannot charge anyone anything.

What’s not to like about this idea? Indeed, why not use this model for health insurance generally?

Think about it. Congress could mandate a generous standard medical plan for all of us. (Heck, legislators might as well include people who aren’t working. Why let lack of employment get in the way of such a great idea?) Not just generous, but very generous. After all, we are entitled to “Cadillac” care—every procedure at the finest facilities for as long as we want.

Lest small-minded critics complain about the cost, the benefits, all of them, would be FREE! Insurance companies would be required to provide the necessary plans. But they would not be allowed to “impose any premium, fee or other charge” for doing so. Just like for the contraceptive benefits.

Then everyone in America would have comprehensive insurance at no cost.

What could possibly go wrong with such a program?

Tragically, it appears that someone at HHS realized that there ain’t no such thing as a free lunch, or insurance plan. So the agency proposed allowing insurers to receive a credit against fees they would owe for participating in state health insurance exchanges. Which means the taxpayers would end up paying for the coverage. For Uncle Sam would have to make up the difference somehow—or borrow more money, which just means that future taxpayers would end up paying.

The administration rule nicely demonstrates the fundamental mistake that is Obamacare. It is ridiculous for Washington to decide health care benefits for 315 million Americans.

First, the proposed rule has nothing to do with making “it clear that your boss does not get to decide whether you can have birth control,” as claimed by Planned Parenthood. Today everyone is free to purchase contraception, which is affordable for most everyone. The regulation actually is about subsidies, that is, forcing those who don’t want or like birth control to pay for those who desire birth control.

Second, there is no standard one-size-fits-all insurance package that is appropriate for everyone. Just as it would make no sense to mandate a particular standard for homeowner, auto, or life insurance, it makes no sense to impose a set package for health insurance. We all are different and prefer different mixes of risks and benefits, as well as tradeoffs between health insurance and other uses of our money.

Imagine telling a car owner that he or she also must pay for motorcycle, racecar, and truck coverage. Never mind that the driver doesn’t own any of them. Some far-sighted politician or bureaucrat has decided that this coverage is “necessary” and all must pay. Similar is requiring insurance coverage for maladies and procedures irrespective of the insured’s desires.

Third, insurance for birth control is not insurance. The purpose of insurance is to guard against unexpected and large, even catastrophic, expenditures. That ain’t birth control. Not only is it affordable, even for students who attend Georgetown Law School, but its use is fully under the control of the insured. It is as if auto insurance paid for gasoline fill-ups. Contraception coverage is prepayment of expected medical expenses, expenses that you can increase as much as you want.

Fourth, the push for mandatory coverage is ideological, not medical. The vast majority of plans already cover birth control for the simple reasons that it is widely desired and unplanned pregnancies are expensive. Nor is contraception uniquely important—more vital than mammograms, chemotherapy, colonoscopies, heart bypass operations, and much, much more. If birth control should be free, then surely everything else should be free as well. Why make patients pay for any treatment?

Fifth, making contraceptive coverage truly “free” is impossible. Someone has to pay. Contrary to the apparent assumption of many policymakers, birth control products do not magically appear ex nihilo. Someone has to create, produce, market, and sell them. Which means that someone has to be paid by someone else. If not the patient, then who?

The administration has shifted, not eliminated, costs. Thus, everyone under a plan covering contraceptives will pay for the benefit, even if they do not use them, never intend to use them, and are morally opposed to using them. That may be a good deal for the person who wants contraception, but not for the rest of us.

At least this makes more sense than the administration rule, which says insurance companies have to pay for the coverage. If they can’t charge specifically for birth control, they will treat coverage like an administrative expense. Either all plans offered to religious organizations or simply all plans for everyone (for the sake of simplicity) will incorporate the cost. Then we all will pay so Washington can satisfy the ideological preferences and financial interests of clamorous political groups.

Sixth, requiring coverage of contraception (as well as abortifacients and sterilization) is worse than other mandates because it violates the conscience of some religious believers. Requiring Catholics and some others to subsidize birth control is a direct assault on their faith. One can argue about the rule’s constitutionality—First Amendment jurisprudence is notoriously complex—but the government should not challenge people’s fundamental moral beliefs without a serious, even compelling justification. There is none for relieving those having sex from paying for contraception. Sex is good, but that doesn’t mean the rest of us should have to pay for those using birth control while engaging in sex.

In short, the administration rule is extraordinarily bad on medical, policy, and moral grounds. It can only be explained as being directed not for those who use birth control but against those who oppose using birth control. It is about power and control. That is, advocates want to force Catholics and others to pay for contraception as a matter of (malign) principle. It makes Schadenfreude the basis for the U.S. Code.

There is much to dislike about Obamacare. Top of the list should be the arrogant presumption that Washington knows our treatment needs better than the rest of us. Choosing our own medical destinies should be our real “right” to health care.

This essay first appeared February 4, 2013 in The American Spectator and is reprinted with permission.

Doug Bandow


Doug Bandow, J.D., is Senior Fellow at the Cato Institute, specializing in foreign policy and civil liberties. His is a prolific author whose books include Wealth, Poverty, and Human Destiny; Beyond Good Intentions: A Biblical View of Politics; and The Politics of Envy: Statism as Theology.

  • Michael Paterson-Seymour

    Granting insurance companies “a credit against fees they would owe for participating in state health insurance exchanges” imposes a cost on government only if the fees have been set at a level that just cover the costs of their operation. Otherwise, the government is merely foregoing revenue it would otherwise have received. It is no more a cost than a tax credit.

  • Alecto

    Schadenfreude is the basis not only of the healthcare mandate, but of every single policy this Administration promulgates from foreign policy to domestic economic policy. If you accept the premise that the law’s intent was to provide health care for uninsured people or to guarantee coverage, then these arguments are plausible. If one looks beyond the Marxists’ stated intent, which is never the actual legislative goal, then it becomes clear that their purpose in enacting this was to gain control over Americans’ lives and property.

    Once the State controls decisions over healthcare, it controls life and death. France is moving towards legal euthanasia. It is now an accepted practice in the Netherlands. This evil doesn’t begin in a vacuum. First comes national healthcare. Then comes rationing. Then come the death panels. It isn’t rocket science.

    You want an American approach to healthcare? Take Dr. Ben Carson’s suggestions about HSAs to heart. I’ve been writing to my representatives for years requesting an expansion of Health Savings Accounts (lose the contribution limits, expand eligibility, increase employer or increase government contributions for the poor to a private HSA). That is the model for health care we ought to pursue. That would immediately result in lower prices, create investment capital and encourage savings, encourage responsible health choices, promote the likelihood that care would be received, which is a moral good, and ensure seniors have the ability to afford healthcare as they age and become infirm.

  • I’ve recently come upon a group called Samaritans, a Christian organization of people who pool their resources to provide health care for their members. A whole lot of mediating cost is eliminated — and the providing of funds is personal, bound up with prayer and free giving. There are a lot of things we could do that don’t involve feeding the Leviathan.
    Inevitably somebody is going to say that it doesn’t matter to us if our insurance provides contraception “free”, because the companies recoup the cost in not having to pay for pregnancies. That wouldn’t fly at my school, because of the people we insure, but set that aside. A suicide pill would do the same, wouldn’t it? A suicide pill could be provided “free,” which would save the insurance companies a lot of money that would have been spent treating the underlying illnesses of the suicide. Well, a Catholic organization could not have anything to do with such a policy. We could not be complicit in it, even if people argued all day long that our money wasn’t being used to support an evil thing, because, after all, the suicide pills were “free”. We can’t do it. It doesn’t matter, either, that evil thing A happens to be legal and evil thing B happens to be, for the time being, illegal.

    • Lee

      You’re getting increasingly wild and irrational in your rhetoric. Of course it matters that option A is legal and option B isn’t. If option B were illegal, the insurance companies would not be allowed to provide it. What you believe is that contraception SHOULD be illegal. You have a constitutional right to believe anything you want, but you can’t all on your own make contraception illegal in this country. What you’ve illogically “deduced”, if you’re honest with yourself, is that “we can’t” provide blood transfusions if one or two people believe doing so is “evil” because child abuse is also evil. That IS the “logic” behind your argument if you break it down.

      • Alecto

        Belief is a natural right, the constitution simply guarantees what already exists. If Congress chooses to pass laws which violate natural rights, no citizen is obligated to obey them.

        • Michael Paterson-Seymour

          Yes. As Jefferson put it, “”Believing with you that religion is a matter which lies solely between man and his God; that he owes account to none other for his faith or his worship; that the legislative powers of the government reach actions only, and not opinions…” and again, “that it is time enough for the rightful purposes of civil government for its officers to interfere when principles break out into overt acts against peace and good order.”

          It is when people start translating their beliefs into actions (or omissions) that they become subject to government control

  • Doug Bandow is correct — if the government can command insurance companies to pay for this group of services (which also include all forms of voluntary sterilization and “morning after” pills), then they can command insurance companies to provide and pay for any service or services. And that having been established, I demand that the government command insurance companies to give and pay for EVERYTHING.

  • Jeff

    “In short, the administration rule is extraordinarily bad on medical, policy, and moral grounds.”

    Medical grounds? Contraception coverage is recommended by the AMA.!

    The bishops are going to get rolled on this one if they fight it, and they can’t afford that. Their authority is already at an all-time low. They claim this is about individual conscience, something they’ve been happy to neglect as it relates to other issues, but it’s obvious that their real stance is purely ideological and has nothing to do with individual conscience. As Abe Rosenthal puts it:
    “From the start, the Church has used the mandate controversy to try to get the government to do what it has failed to do through preaching and dictates from the Pope – prevent Catholic women from accessing birth control to manage their reproductive lives so they can bear children when they choose and, equally important, participate in the work force.”

    • Augustus

      Oral contraception has harmful side effects. This is well documented. If you think that professional organizations can’t be influenced by political correctness, then you are seriously politically naive. Or more likely, willfully ignorant. And even if the AMA recommends coverage, so what. Does the AMA say that the government should REQUIRE all employers to cover it? That is the real issue, which you conveniently ignore. The fact that you buy into Rosenthal’s ideological priorities simply demonstrates your predisposition in favor of a Leftist political agenda. (And you claim to be ideologically neutral? Examine your own prejudices before accusing the bishops of harboring ideological motives.) Read this Crisis article if you have any sincere interest in learning the truth about the harm of contraception rather than blindly following secular ideologues and anti-Catholic bigots like Abe Rosenthal:

      • Jeff

        You make my point for me. The opposition to free contraception on the grounds of conscience has been removed. What’s left is to oppose free contraception on ideological grounds and to insult everyone who disagrees with your view. I trust every woman, Catholic or otherwise, to make the decision for herself. She can look at your arguments, the AMA arguments, the arguments of the Catholic Church, etc., and form her own conclusions. And she isn’t costing you, me, or her employer a cent in doing so.

        • Augustus

          Did you read the article by Bandow? Government mandating insurance coverage of contraception means everyone, including employers that oppose it, will be paying premiums to cover contraception, sterilization and abortion-inducing drugs. When the government demands that we pay for something, we have to pay for it. Someone pays. If the government “pays”, it means the taxpayers pay. If the Insurance company pays, it means the entity or individual who pays the premium pays–not the insurance company. Women can buy contraception at the pharmacy or virtually anywhere else. Your claim that women are being deprived of contraception is a red herring. This is not something you cover with insurance, but if a private company wants to offer it, that’s fine. In a free market, if a private company wants to provide a service and a private individual or company wants to purchase that service, then there is not problem. That was the status quo before the Ideologically driven HHS mandate which COMPELLED everyone, except actual churches (houses of worship), to pay for contraception and sterilization. The government has still not changed that, only modified it for a couple institutions. But compelling everyone is none of the government’s business. The Church is defending religious liberty and freedom of conscience because the First Amendment of the Constitution covers EVERYONE, not just clergy.

          • Mike

            What you are missing, Augustus, in spite of the fact that it has been explained repeatedly in this thread and the previous one, is that no, the employers will NOT be paying for the contraception. The Obama administration has found a workaround that relieves the employer of responsibility while providing women with comprehensive healthcare. If my insurance company offers me free vitamins because it’s cheaper to insure me if I stay healthy by taking a daily vitamin, should I have to refuse because my employer, who pays for part of my premium, doesn’t like the idea? Of course not! It is none of his business! The decision is transparent to my employer. It is free to my employer. It is my decision, not his. He has no right to be a dog in the manger and try to withhold vitamins from me, offered to me for free, because he feels vitamins are immoral. It’s not uncommon for a small investment to actually reduce overall operating costs. This investment pays for itself. Contraception is such a case. What if our insurance companies wanted to offer us free gym membership because it’s cheaper for them to insure people who work out than people who are sedentary? How selfish would our employers have to be to try to prevent that? Once you’ve grasped this distinction, you’ll be able to separate the two issues you’ve confused in your mind : 1) Whether or not anyone is being forced to pay for someone else’s contraception (they’re not — the insurance companies are happy to provide them and can even claim a tax credit against them), and 2) whether or not contraception is ideologically acceptable.

            • Augustus

              Mike, you have been fooled by the Obama administration’s deceit. Let me count the ways: 1) the “accommodation” only applies to SOME religiously affiliated organizations, not all of them; 2) it does NOT apply to for-profit businesses AT ALL. There have been 14 suits filed against the Obama administration by religious owners of for-profit businesses; of these Obama has lost 11 of them. These companies got NO relief from the so-called “accommodation.” 3) The “accommodation” that applies only to SOME religiously affiliated non-profits involves a rider that is attached to their insurance policy. The rider provides the contraception and sterilization, etc, but it is not FREE. The insurance company is not providing it for free, it is going to spread the cost to its policy holders including the religious organization. The insurance company is not offering this out of the goodness of its heart. It is being FORCED to do so by law. Obama will not allow any conscientious objectors. That’s what a MANDATE is and that policy was not reversed. The president of Planned Parenthood and the New York Times have admitted as much. As I said, nothing is for free. Someone pays. If the employee isn’t paying, it’s the employer. The insurance company, if it did not offer it before, will only do so now because it has no choice and it will pass the cost onto others. Obama created this mess for himself when his campaign invented the bogus “War on Women” to get reelected. The policy, which was ideologically driven, was invented as part of that strategy to win over single women voters. Now it’s causing legal problems for him but he’s too much of an ideologue to back down and admit the whole thing was a scam.

    • Bob

      Read this article from very liberal about Liz Fowler leaving the Obama administration for a very lucrative job at Johnson and Johnson Pharmaceuticals. Ms. Fowler was essentially the person who wrote Obamacare strongly influencing the HHS mandate on insurance carriers covering birth control. Looking at the supply chain, “free” birth control will mean increased sales in the tens of millions of dollars of birth control pills by J & J to Walgreens, CVS, etc. Always follow the money…….you scratch my back, I’ll scratch yours. J & J is rewarding Ms. fowler with a lucrative lobbyist post for helping craft a law that will make them huge $$$.

    • Proteios

      The AMA may very well recommend it. But it still not medicine. It makes a properly functioning system to miss function. They are wrong. all it reveals is that they have deviated from their core mission of curing the sick and bringing people into good health. It isn’t the only evidence that the AMA has serious weaknesses.

  • djpala

    Sebelius, Pelosi, Biden etc. continue their heresy & nothing is done ? The USCCB collects millions through the CCHD & grants these funds to anti-Catholic groups that keep the party-of-death in power while asking us to pray that the HHS mandate is reversed ? Weak, effeminate prelates are directly responsible for this corruption & it will continue until they are all removed.