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February 03, 2013

Obama's Solution To The HHS Mandate Is To Conjure Contraception Out Of Thin Air

On Friday, HHS issued its notice of proposed rulemaking for the contraception/abortifacient mandate. I spent part of the afternoon picking it apart on Twitter, and I'm still amazed at how stupid the Obama Administration thinks we are.

After jawing over the issue for almost a year, the Obama Administration finally figured out a solution. Under the proposed rule (PDF), none of the following folks will have to pay for the contraception and abortifacient coverage that every insured person is required by law to receive:

(1) The insured person.
(2) The insured person's employer.
(3) The insurer.

Quite literally, the Obama Administration's rule contemplates that no one will have to pay for this morally ambiguous healthcare. Let me explain.

Obamacare was clear that individual purchasers of insurance should never have to pay for contraception and abortifacient coverage. That remains the case under the new rule, nominally anyway. The Obama Administration first intended that employers would bear the burden for that portion of insurance coverage. (And yes, that money would obviously have come out of the employee's total compensation, but neither Obama nor liberals in general understand how employment works.)

Naturally, thousands of employers who happen to be religious objected to paying for something to which they have a moral objection. In response, the Obama Administration reluctantly proposed the religious employer exception, which is the focus of the proposed rule. (And no, it doesn't cover such religious employers as, e.g., Hobby Lobby because it is a business instead of a non-profit. Obama apparently believes that you can't be religious if your business is intended to be a business. That's a different problem.)

But the exception left the Obama Administration in a difficult position. If neither the insured person nor the employer was going to pay for this healthcare, who was? Today's notice of rulemaking solves the problem by declaring that no one does.

The Obama Administration accomplished this feat of financial witchery by making two magical claims. First, it declares that for insured group health plans, the cost of contraception and abortifacient coverage with be "cost neutral, and may result in cost savings" once all other benefits are considered. (Pardon me for a minute while I flash back to Obama making the same false claim about Obamacare's own impact on the federal budget.)

The rule cites a study that finds the cost of contraception is cheaper than the cost of unplanned pregnancy, which is idiotically beside the point, since no one, not even the Obama Administration, is suggesting that people who do not get free contraception will necessarily fail to use any contraception at all. This pathetic, financially dubious dodge is the fig leaf that the Obama Administration has hung on the religious employer exception. It gets worse though.

Second, for self-insured health groups, like some corporations, the proposed rule says the cost of contraception and abortifacients will be offset because the ultimate issuer of the objectionable coverage (the rule contemplates a third party) will get to deduct the cost from the federally-mandated exchange fees that all such insurers will have to pay to continue operating under Obamacare. Essentially, Obama is saying to these insurers: "You must pay me a fee to stay in business, but you can deduct the cost of contraception from the fee, so that makes the contraception coverage free."

Like I said: magical thinking.

The Obama Administration will not bend on this. As far as the Democrats are concerned, people will have free contraception and nothing so obvious as morality, economics, or finance will stand in the way of that goal.

I know most commentators are focusing on the businesses that the so-called "religious employer" exception doesn't include. But even for the included groups, it is nothing praiseworthy because despite Obama's claims, somebody is going to have to pay for contraception and abortifacients. He can't just magic that money out of a federal regulation.

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posted by Gabriel Malor at 09:51 AM

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