Contraceptive-Only Plans: Questions and Answers

On March 23rd the oral arguments for the Zubik v. Burwell case were heard by the Supreme Court. The case involves the "accommodation" that was developed by the federal government for religiously affiliated nonprofit employers with objections to contraceptives. The accommodation was designed to eliminate any potential burden on religiously affiliated employers while providing women workers and their dependents contraceptive coverage. The accommodation relieves the religiously affiliated nonprofits of the requirement that they pay for contraceptives in their employees' health plans by allowing them to provide notification of their religious objection to their insurers or the government. In turn, the plans essentially create and pay for a separate plan that extends the contraceptive benefit to women workers and their dependents.

While religiously affiliated nonprofits are eligible for an accommodation, they are not eligible for the "exemption" that is available only to houses of worship with religious objections. Unlike employees of firms that receive an accommodation, workers and dependents of exempt employers do not have coverage for some or all FDA-approved contraceptive methods.

The nonprofits that are suing the government in the Zubik v. Burwell case want to be exempted from the requirement like the houses of worship are. They believe that, even though they are not paying for the contraceptive coverage directly, they are still "complicit" in the provision of contraceptives. They contend that this burdens their religious rights under the Religious Freedom Restoration Act.

In the oral arguments, the Justices and the lawyers debated different approaches that could be taken to develop a solution to the problem--that is to make sure that the women have contraceptive coverage in a way that does not make the religiously affiliated employers feel like they are substantially burdened by providing access to contraceptive coverage in violation of their religious beliefs.

One of the approaches discussed was whether the Affordable Care Act Marketplaces could offer a "contraceptive-only" plan as an option for the workers and dependents of religious nonprofit employers with objections to contraception. In theory, these plans appear to be a win/win solution: Women employees and dependents would be able to obtain no-cost birth control coverage separate from their employer's plan and nonprofit employers with religious objections to contraception would be relieved of any involvement. The real-world implementation of such an option, however, raises numerous questions. The following Q&As attempt to address some issues that would need to be considered if such an approach were to be pursued.

Could such a plan be made available through the ACA Health Marketplaces under current law?

The ACA specifically states that only Qualified Health Plans or pediatric dental plans may be sold in the ACA Marketplaces. The law specifies that Qualified Health Plans are comprehensive plans that must include essential health benefits and must be certified by ACA Marketplaces in each state. The specific benefits included are established by states within broad federal ACA guidelines. For contraceptive-only plans to be offered through the ACA Marketplaces, Congress would need to change the ACA, and each state would also have to pass new laws or issue new regulations.

Has this model been used before?

While there has not been a contraceptive-only plan available in the past, limited scope insurance products are available to consumers. These have been available through plans as supplemental benefits that cover certain conditions, such as pregnancy, or cover only a catastrophic medical event. Some limited scope insurance products cover services that have been out of the scope of traditional insurance, such as vision, dental or long-term care plans. The case of maternity care riders is instructive. Prior to the ACA, most individual insurance plans did not include maternity care as a benefit. While many plans offered maternity riders, these riders were costly and typically required waiting periods or included pre-existing condition exclusions (notably pregnancy). A woman could not purchase a maternity care rider if she was already pregnant because the plan knew that she would use the services and that it would be expensive. The ACA reformed coverage rules so that all plans must now include maternity care because it is an essential service that many women need at some point in their life in much the same way that women use contraceptives.

While the pediatric dental plans available through the ACA Marketplace could be a possible model for contraceptive-only plans, they differ substantially in a number of ways. Dental plans cover routine preventive services and help pay for unexpected dental problems. They typically rely on a network of dental providers and have deductibles, cost-sharing, and a specified maximum annual benefit. A contraceptive-only plan could have none of these because the ACA requires that health plans offer women the full range of FDA-approved contraceptives without cost-sharing. Dental care also has limited interaction with other health and medical benefits, while contraceptive care is provided in the context of well-women care, primary care, or ob-gyn care, all of which are covered by health insurance plans.

In addition, having to go to the Marketplace for contraceptive coverage separate from the employer's health plan imposes a burden on the employee of the religiously affiliated employer that other women do not face because their coverage is integrated with their health plans. Requiring this additional action by an employee to obtain coverage places a barrier to contraceptive coverage contrary to the intent of the ACA.

Could this plan be a true "insurance" product?

The financial viability of the insurance model counts on the fact that not everyone will use the services, although everyone pays in. The individual mandate provision in the ACA is needed to assure that a mix of healthy and sick individuals are included in the risk pool. A contraceptive-only plan tailored only for women who don't get contraceptive coverage in their employer plan, however, would attract only women who need contraception. Imagine a cancer-only plan that you could purchase after you were diagnosed with cancer. The only people who would buy this product would be individuals with cancer, essentially guaranteeing everyone who bought the plan would use the service. It is hard to imagine an insurer who would offer a cancer-only plan. A contraceptive plan developed to fill the gap in contraceptive care would need to be available to all eligible women who seek to enroll in such a plan; this is referred to as "guaranteed issue." Only women needing contraceptive services would sign up for this policy, and the policy might cost even more than the contraceptives themselves because it would include the insurance carriers' administrative expenses. In addition, for many women there would be little incentive to stay enrolled in the program for the long term. Long acting reversible contraceptives, such as IUDs, can last up to seven years. Women could get the coverage, obtain the long acting reversible contraceptive of their choice, and then drop the coverage. This does not align with the typical structure for a financially-viable insurance product.

How could this be financed?

The current accommodation is largely financed by either the plans themselves or the government. Because contraceptives are cost-effective, it is assumed that the plans can save money because the costs of contraceptives is largely outweighed by the amount plans can save by preventing costs associated with an unintended pregnancy. The regulations require insurance plans to cover the costs. In the case of plans that are self-funded, a third party administrator can seek reimbursement for the costs of the contraceptives services plus an administrative fee of 15% from the federal government for the costs though a reduction in the fees that they pay to the ACA Marketplaces for their participation. If a separate contraceptive-only plan were established, then the costs of the plans would likely have to be paid for exclusively by the federal government, at a higher price given the likely pricing and take-up only by potential users of a separate plan offered in the Marketplace.

How would this work for women?

A separate contraceptive-only plan offered outside an employer's plan could present logistical hurdles to the women who are seeking birth control services. To sign up for such a plan, women would need to go through a separate process to enroll through their state ACA Marketplace. Some women might be very motivated to get the coverage because they need contraceptives, while others might not because they, like their employer, have religious objections contraceptives. Still others might want the coverage, but may not enroll in the plan because they are unaware of the process or they do not think they need it at the time of enrollment. Once a woman is enrolled in such a plan there might be other hurdles stemming from the administrative complexity of processing paperwork for an additional plan, and possibly needing to seek care from a different provider network-- only for their contraceptive care. Finally, the reason that the government requires that most private plans include contraceptive coverage is because it has been recommended as an evidence-based preventive service important to women's health. While contraceptive-only plans, if they could be offered, might relieve the burden religiously affiliated nonprofits feel under the current accommodation, this proposal may create new barriers for the women workers and dependents who seek contraceptive care as part of their regular health care.

Laurie Sobel is a co-author of this post.

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