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Birth Control Without A Co-Pay Still Isn’t Free

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Starting next year, many health insurance plans will be required as part of the federal health-care law to cover contraceptive services without charging patients a co-payment. But that doesn’t mean they’re free.

The Obama administration announced Monday that Food and Drug Administration-approved contraceptives — including birth control bills, intrauterine contraceptive devices (a.k.a. ICDs or IUDs) and sterilization — classify as preventative services under the law. The requirement also covers HIV screening, breastfeeding pumps and some wellness care visits for women, among other services.

For women on the Pill, savings could be substantial. For oral contraceptives, out-of-pocket costs range from $14 to $26 per pack, according to a study in the June 2011 issue of medical journal Contraception. The study, which tracked expenditures between 1996 and 2006, found that women’s out-of-pocket expenses for oral contraceptives amounted to 58% of the drugs’ cost, compared with an average 30% of those for other monthly medications.

The new rules require the insurance plans to pay the full freight for the pills– and while that means lower out-of-pocket costs for women who take the pill (or avail themselves of other covered services), insurance plans are likely to make up for this extra expense elsewhere. Insurers can still charge extra fees for purchasing branded contraceptives over generic versions, and may also hike premiums. “Health insurance premiums are based on the cost of actually providing care, so if you add additional benefits — whatever they might be — and people utilize them, then the premiums will eventually reflect that additional cost,” says Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters. The degree to which consumers will see their bill rise will vary widely by plan. People in employer-sponsored plans where companies pass on only part of the costs may see less of an impact, as will those in plans that already voluntarily cover many of the soon-to-be-required services.

The Department of Health and Human Services has said it expects premium increases to be minimal, but did not provide an estimate. “Our committee did not look at costs when we made our recommendations,” says Alina Salganicoff, vice president and director of Women’s Health Policy at the Henry J. Kaiser Family Foundation, who served as a member of the Institute of Medicine recommendation panel behind the new requirements. “It’s an investment in your health, which in the long run can cut costs.”

Not all plans – and therefore, not all consumers – are covered by the government legislation. Medicare or Medicaid are exempt, and the government also included an exemption for religious organizations providing health insurance to employees. Excluded consumers can still look to free and low-cost services from family planning clinics and state-funded family planning programs, says Salganicoff.

Even people who will benefit are still on the hook for out-of-pocket costs for a few more years. The requirements take effect for new insurance plans issued on or after August 1, 2012, and given the way health plans calculate their calendars, Waltman says, most women won’t actually avoid those co-pays until January or July of 2013.

Or later. Health plans that took effect before President Obama signed the healthcare law on March 23, 2010 and haven’t changed significantly since are exempt from the new rules under a grandfather clause. It’s tough for companies to maintain that status, but those in grandfathered plans could be in limbo a few years longer, she says. (Employers are required to notify employees if their plan has this kind of status.) Until your plan turns over, current terms are still in effect, including co-pays and any un-covered portion of the bill.

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    • Where did you read that insurance companies will still be able to charge fees for branded oral contraceptives? Managed care wrote a letter to HHS asking them this question on Sept. 29th.

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