On the Obamacare Birth Control Mandate

The following Letter to the Editor is a response to an op-ed published in the Wall Street Journal by John Cochrane, Professor of Finance at the University of Chicago's Booth School of Business. In his letter, Cochrane critiques the Obamacare birth control mandate in terms of how it negates the "don't sweat the small stuff" theory of insurance demand, which states that overall health costs will rise if insurance covers small costs rather than catastrophic damages. My response to this article highlights some potential oversights that Cochrane makes in his analysis of this theory.

Link to article: The Real Trouble with the Birth Control Mandate                     

To the Editor:

John Cochrane’s February 9^th op-ed “TRTCM” misleadingly portrays the realities of the contraceptive mandate debate through a biased interpretation of insurance demand theory, along with critical emphasis and omission errors.

Contraceptive costs have a more significant impact on birth control utilization than what Cochrane admits. NIH analysis of contraceptive expenditures and utilization data determines cost as the #1 factor impacting method choice, with IUDs, sterilization, and the pill costing four times that of condoms while failing three times less. The Center for American Progress also asserts that 50% of women under-utilize contraceptives for purely financial reasons. Cochrane also overlooks that as per the “don’t sweat the small stuff” premise that he references, health insurance is actually an exception to general theory when preventive care effectively stops “small stuff” from becoming “big stuff.” Thus, mandating birth control insurance will be cost-effective by lowering cost prohibitions on highly effective methods, which will decrease unwanted pregnancy and STD rates and thus reduce costs for the entire risk pool.

Cochrane overemphasizes this mandate’s opposition. The Guttmacher Institute reports that 98% of Catholic women use these “banned” contraceptives and that 28 of 50 states have already implemented these mandates. Furthermore, coercive mandates for preventive services are justified when a dearth presents an imminent danger to society and persuasion has been ineffective, according to the Columbia School of Public Health. Although Cochrane neglects to evaluate the evidence for the Affordable Care Act’s other potentially cost-efficient provisions like Accountable Care Organization bundled-payment models, he radically concludes his op-ed advocating its repeal.

Regards,

Arjun Bhaskar

Student at the University of Pennsylvania