No Such Thing As a Free BCP

Earlier today, @TheDemocrats – “the official Twitter account of the Democratic Party”  – tweeted the following:  “Before #Obamacare, women spent up to $600 a year on birth control. That’s equal to 9 tanks of gas.”  Included with this tweet was a snazzy purple graphic with the same language, and “Women deserve preventive health care coverage,” underneath.  I’ll confess, it touched a nerve.  I responded with this: “And *poof* — it’s now magically free!!! Y’all are so amazing!!! #FreeStuffForEveryone”.

No, I’m not mad that all health insurance plans must now cover the cost of birth control — I’m no fan of much of anything being government mandated, but that ‘s a philosophical quibble for another day.  Nor am I mad that some employers who have religious/conscientious objections to providing health care coverage which includes birth control are being forced to litigate the issue via the courts.  I mean – these are things that irk me, but they aren’t the impetus for this post.

What I’m mad about is this:  The Democrats, with that tweet, imply that Obamacare has somehow now rendered birth control “free.”  This exposes and/or plays to a very basic misunderstanding of economics which serves as the underpinning for most of the liberal agenda, at least in the fiscal arena.  Perhaps what makes me most mad about it is that I bought into it for so many years. 

We’ve all  heard the saying, “There’s no such thing as a free lunch.”  I heard it — and even understood it — back when my ears were still liberal.  I just didn’t give it much thought.  But it perfectly sums up the economic reality that one simply cannot get something for nothing. Always, there is a trade off of some sort.  Just as the cost for the food provided with a “free lunch,” is offset by a higher drink price, the cost of “free” birth control must be offset in some fashion.  Any business, be it a restaurant or a pharmacy, must profit in order to live. Income must exceed expense.  That does not — can not — happen when one’s product is simply doled out for free.

The cost of a “free” lunch is made up for in one of two ways: 1) It is included in the cost of other items sold; or 2) it is covered in the price of paying customers’ meals.  Likewise, the cost of “free” birth control is either made up for by higher prices for other drugs or by higher insurance premiums.  Or both.  

Strangely enough, when birth control pills suddenly became “free” under my employer’s health insurance plan, our insurance premiums also increased.  This is where the proponents of “free” birth control point out that it was the evil insurer’s choice to increase premiums.  Why, yes, yes it was.  While some might find it shocking that a business, understanding basic economics, opted to offset the provision of a “free” product, by charging more for another, I don’t.  And neither should anyone else who understands that the lack of profit creates an existential crisis for any business.  

If you choose to use birth control, you are choosing to use a product.  That product costs money.  It costs money to develop, it costs money to make, it costs money to ship, and it costs money to sell.  Interestingly enough, these days, many types of birth control pills can be obtained at your local pharmacy for as little as $9 a pack. If that’s still too much for you to afford, your local Planned Parenthood will typically provide them based on a sliding scale.  For you to just expect it to be handed to you for “free,” demonstrates a troubling level of ignorance and/or selfishness.

I’ll confess I feel right silly at the moment, explaining such a basic concept.  Anyone who actually reads this already gets it.  But the mentality which that tweet from The Democrats perpetuates is the same mentality that blithely ignores economic realities and forges ahead with policies which do damage to our economy on both a micro and macro level.  And it ticks me off!

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Get Real

This started out as a Facebook post sharing Dana Loesch’s collection of “real stories” from people who have found themselves negatively impacted by Obamacare.  It tied into a discussion I was having yesterday, and my intended one or two sentence comment expanded.  So, here, in somewhat more permanent fashion, are some of my most recent thoughts re: Obamacare:

Yesterday, a friend related to me how a family member was helped by the provision in the ACA which allowed for people to remain on their parents’ health insurance plans up to age 26. That’s a real story of someone who benefited from it, and points to the need, in some instances, for there to be that sort of option available, so it should not be discounted. I know of another individual who benefited from the pre-existing condition facet. Pre-existing conditions MUST be reasonably and fairly addressed. 

On the other hand, many others are relating their own stories of how they have been negatively affected by the ACA. I know my own rates have gone up substantially in the past 3 years (as has my deductible) and, due to costs, I had to remove my daughter from the company plan and purchase a separate policy for her, which has also increased significantly, and which I’m desperately hoping won’t be done-in by the implementation of this Act. All around, we see stories of companies cutting back hours and holding off on hiring in anticipation of it. Many of its key provisions have been gutted for the time being by the President himself via Executive Order. Many of its prior supporters have sought exemptions from it. And Congress, which was in such an infernal hurry to pass the damn thing “so we can know what’s in it,” has effectively wrangled an exemption for itself. (See, e.g., Loren Heal’s recent article re: the Congressional exemption.)

So, yeah. I oppose Obamacare. Always have and likely always will. Because I believe it causes more problems than it solves. That doesn’t mean I oppose ALL efforts at reform which would address issues like the ones mentioned in my initial paragraph, nor do I at all oppose efforts to reduce costs. But it sure would be nice to look for reasonable, workable ways to do so that aren’t so entangled with political agenda that they do nothing of the sort.

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My initial post drew some comments, so I want to include those here, as well:

From my Sister-in-Law, Susan Moore (yes, we have the same name) – “We’ve been self insured for 13 years and our health care premiums have gone up EVERY s i n g l e year from 10-28%! This year was one of the lowest increases, only 10%:( It’s nearly unbearable.”

My response thereto – “The hard part with employer-sponsored plans is being able to go back and trace the increases historically, but I know mine didn’t just start going up in 2010. What I do know is they went up enough that year for dependents that I had to take Riley off my plan and put her on her own. The problem with health insurance itself is that it creates an artificial layer which insulates the provider from normal market forces and, in my view, encourages inflated costs. Add employer-sponsored plans to the mix and that’s another layer between the end user and the provider. All of which increases costs. This is why I’d love to see a la carte and catastrophic-only plans become available.”

An article I ran across shortly thereafter – “Real health reform should allow people who are happy with their plans and doctors to keep them – not force them to pay for something the government believes is ‘better’ against their will. It should increase choice and competition, so consumers have better options. It should strengthen the doctor-patient relationship – not break it. It is time for Congress and the President to replace this law with genuine, bipartisan patient-centered reform.” (See more here.)

I’ll update with any additional comments or thoughts as they occur.  

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UPDATE:  Well, here we are, twenty days post D-Day with Obamacare.  My own personal experience with it (which one might expect to be nil, since both my daughter and I already HAD insurance — which we LIKED):  

Early last week, I received a letter from my daughter’s insurer advising that, due to the ACA, her current policy would no longer be available.  Her (my) options at this point are 1) to essentially re-up now for a policy which will provide the same coverage for the same premium (thankfully) through December, 2014, 2) do nothing and her current policy will expire in August, 2014, or 3) start shopping on the exchange now.  You’ll note that both options 1 and 2 have an end date.  At which point, one can only assume our ONLY option will be to….*drum roll* go shopping on the exchange.

Meanwhile, last Thursday, I received a letter from my own insurer advising of basically the same thing.  My firm is going to do the equivalent of Option 1 above, but then will have to….*drum roll* go shopping on the exchange before December, 2014.  

Here’s the interesting part of that — my firm employs less than 50 employees. Yet, because it opts to provide health insurance coverage to its employees (and because we need to be ACA compliant), is forced to be ACA compliant.  So…the firm’s options are to provide ACA compliant coverage or  no coverage at all. 

Now, it is entirely possible that when the time comes to “shop” for my daughter and for my firm to “shop” for its employees, the options available on the exchange will be even better than what we have now.  Truthfully, that’s more likely to be the case with my firm (which has a somewhat older and not particularly healthy employee pool) than with my daughter (who is young and healthy.)  I guess we’ll find out in another year or so.

Meanwhile, “If you like your health care plan, you can keep your health care plan,” has been demonstrated to be pure hogwash.  (Knock me over with a feather!)