John Cochrane, a professor of finance at the University of Chicago Booth School of Business and an adjunct scholar at the Cato Institute, has penned an outstanding piece for The Wall Street Journal today explaining why the ObamaCare birth control mandate is not just an affront to the First Amendment but an assault on common sense.
Cochrane explains that health insurance premiums could be raised by $50 per year to cover toothpaste, but you’d be saddled with mounds of paperwork and you would wind up spending more money. It is the same with birth control, except under ObamaCare the cost — free to those who get it — is shifted to those who have no need for it, such as older couples, couples trying to get pregnant and gays and lesbians.
Insurance was designed to spread the risk. In return for premiums from a large group, individuals could be protected from the financial disaster of large, unanticipated expenses, such as fire, car crash or major illness. And the insurer could make a profit.
The Department of Health and Human Services came up with this mandate that employer provided insurance must cover birth control by rationalizing that women should “have access to a full range of recommended preventive services.”
Cochrane observes, “Notice the doublespeak confusion of ‘access’ and ‘cost.’ I have ‘access’ to toothpaste because I have two bucks in my pocket and a competitive supplier. Anyone who can afford a cell phone can afford pills or condoms.
“Poor women who can’t afford birth control are a red herring in this debate. HHS isn’t limiting this mandate to the poor anyway. We all have to pay. The very poor typically don’t have employer-provided health insurance in the first place.”
The professor also points out two obvious unintended consequences. Since birth control pills will be free to the end recipient, there is no incentive for the pharmaceutical companies to attempt to come up with cheaper pills or non-prescription ones. Since pills are covered and condoms aren’t, the government might unwittingly be contributing to the spread of sexually transmitted diseases.
It is all a futile and expensive manipulation of the market for health care — a redistribution from one group to another in the form of hidden tax that destroys free market incentives to improve care or cut costs. What a deal!