David Catron writes
that the "central issue of the public debate over the Obama
administration’s contraception mandate" has been that of religious
freedom, a focus that is "hardly surprising." But why, he asks,
would
the Obama administration, having won the legislative struggle to get
Obamacare passed and fought a brutal legal battle to prevent it from
being overturned by the Supreme Court, risk another visit to that fickle
tribunal by insisting on this egregious mandate?
As the old saying goes, "Follow the money!"
Contraception
is big business, and the HHS mandate promises to turn it into a cash
cow for companies like Barr Laboratories. How? Avik Roy explains:
“Under the current system, drug companies have an incentive to compete
on price.… Under the new mandate, this price incentive disappears.”
Insurance policies that covered contraception prior to the mandate
encouraged patients to forego pricey products by charging higher co-pays
than for generic equivalents. The HHS mandate forbids such co-pays, so
there is no incentive to choose “Brand X.”
Roy goes
on as follows: “Drug companies will be able to market ‘branded’
contraceptives at premium prices, knowing that women are free to choose
the most expensive, designer product because it will cost them the same
as the cheapest generic.” In other words, the contraception mandate is a
license to steal for Big Pharma. Does that explain why President Obama
and his Commissar of HHS, Kathleen Sebelius, are willing to endure
another round of legal battles? Yep. The fix was obviously in at least
as far back as 2009.
Read Catron's entire column on the American Spectator site. Roy, in his March 2012 piece for The Atlantic,
highlights the fiscal insanity of the situation, which essentially
boils down to the Big Government artificially driving up costs so that
both Big Government and Big (Drug) Businesses benefit:
Under
the current system, drug companies have an incentive to compete on
price. If you have health insurance that covers birth control today,
your insurer is likely to charge you a higher co-pay for expensive,
"branded" versions of birth control over cheaper, generic ones. If you
don't have health insurance, and you're buying the Pill directly from
the pharmacy at Wal-Mart, you have even more incentive to shop on price.
Under
the new mandate, this price incentive disappears. Insurers will be
required to pay for any and all oral contraceptives, without charging a
co-pay, co-insurance, or a deductible. This "first dollar coverage" of
oral contraception kills the incentive to shop based on price.
If
history is any guide, this significant change will drive up the price of
oral contraception. Today, Tri-Sprintec costs $9 a month. In 2020,
don't be surprised if it costs $30. Drug companies will be able to
market "branded" contraceptives at premium prices, knowing that women
are free to choose the most expensive, designer product because it will
cost them the same as the cheapest generic. Prepare yourself for
multi-million-dollar Super Bowl ad campaigns from competing
manufacturers.
If you were surprised that PhRMA, the pharmaceutical trade group, backed Obamacare,
now you can see why: the HHS contraception mandate alone will be a
multi-billion-dollar boondoggle for the pharma industry. If your health
insurance plan allowed you to buy a television, of any price, without
any cost-sharing on your part, would you buy a 13-inch CRT or a 60-inch
flat screen?
Roy concludes, "The contraception contretemps is a case study in how
thoughtless laws and policies drive up the cost of health care, making
it less accessible to those who are most in need. The path to truly
affordable health care involves moving in exactly the opposite
direction: restoring the notion that health insurance is meant as
protection for catastrophic costs, and letting people buy birth-control
pills for themselves."
But how "thoughtless", really, are these
laws and policies? Most people associate "crony capitalism" with
Republicans, and not without good cause in many cases. However, cronyism
really knows no bounds in D.C., a town that thrives on power, which
ultimately boils down to controlling as many aspects and details of
citizens' lives as possible. Aaron M. Renn, in a recent essay for City Journal, examines the current prosperity enjoyed in D.C., writing:
But
what solidifies Washington’s emerging status as America’s new Second
City isn’t its economic performance or its emerging global-city profile.
Both of those are secondary effects of the real change in Washington:
the increasingly intrusive control of the federal government over
American life.
Traditionally, Washington thrived through a “leaky
bucket” model, redirecting some of the gigantic money flow through the
federal pipeline to itself. The 2000s were an especially good time for
the region, as two wars, plus 9/11-related defense and homeland-security
procurement, fueled the boom. These days, about a third of the
Washington-area economy depends on the federal government. But with $16
trillion in national debt and large deficits projected as far as the eye
can see, the gravy train may be coming to a halt. Some, like Steven
Cochrane of Moody’s Analytics, think that fiscal retrenchment would
spell the end of D.C.’s new prosperity. “The days of Washington being
the leader in terms of job growth and economic strength are really
over,” Cochrane told the Washington Post in early 2011. “I think there’s
no way that [the pace of job growth] could be kept up any longer,
particularly now that the federal government is undergoing pretty strict
[budget] scrutiny.”
The leaky-bucket model may indeed be nearing
its limits. But Washington has discovered a new way to extract value
from the federal government, based not just on spending but on an
ever-expanding regulatory state. An array of programs—the Sarbanes-Oxley
and Dodd-Frank acts governing finance; the government’s auto-industry
takeover; the EPA’s declaration that carbon dioxide is a pollutant—takes
regulation to new levels of detail and intrusiveness, even extending to
the micromanagement of particular companies. The trend began long
before President Obama took office, but its quintessence is Obamacare,
an annexation by the federal government of one-sixth of the American
economy via 2,000 pages of byzantine legislation, not counting the
thousands of pages of implementing regulations still to come.
All
this intrusion emanates from the legislative and especially the
regulatory machinery in Washington. The city has become, in effect, the
Brussels of America.
Read the entire piece.
The bottom line of all this is that those who think the battle over
contraceptives and the mandate is all about "religious liberty" (which
they might dismiss as either silly or of no consequence to them) are
missing the elephant and donkey in the room: it's about liberty, period.
And the problem is not just an overly aggressive State or greedy
businesses, but the power-lusting embrace of the two. In the words of
G.K. Chesterton: "Big Business and State Socialism are very much alike, especially Big Business.”