A solution to the contraceptives coverage mess?

While prepping for a guest lecture on the contraceptives coverage mandate currently before SCOTUS, I had the opportunity today to review the merits briefs filed in the Hobby Lobby case.  I think both petitioners and respondents put out their absolute strongest arguments, as one would expect at this highest level of review.  The government asserts a fairly convincing case that for-profit corporations were not meant to be covered by the Religious Freedom Restoration Act (RFRA) and that individual shareholders are not burdened by the mandate, and the respondents convincingly argue that RFRA does indeed apply and the numerous exemptions already offered by the government have eviscerated any claim that refusing religious exemptions to for-profit corporations is necessary to achieve a compelling government interest.

The respondents, Hobby Lobby and its family owners, articulate a variety of less restrictive alternative methods to achieve the government’s interest in promoting public health and gender equality, including having the government provide free access to contraceptives rather than demanding that employers do so. Interestingly, however, the respondents do not suggest simply extending the existing accommodation available to religious non-profits to for-profit corporations with religious objections.  This accommodation allows a religious non-profit that objects to contraceptives to sidestep the mandate, instead requiring that its insurance company exclude contraceptives from the employer’s plan and itself bear responsibility to provide preventive services without cost-sharing.   The rationale is that it should be at least cost-neutral for insurance companies to provide this coverage, on the grounds that preventing pregnancy is cheaper than covering new dependents.  (And for self-insured plans, there is a similar approach by which third party administrators bear the burden, and are compensated via adjustments to Exchange user fees.)

I can’t be certain why the respondents omitted this obvious alternative, but one possibility has to do with the fact that the accommodation is currently being challenged (e.g., by the Little Sisters of the Poor) as insufficient because objecting employers argue that they are still being required to facilitate access to objectionable services, even if they do not have to pay for them.

But maybe there’s a solution to all of these challenges: forget the employer mandate as it applies to contraceptives and just have insurers/third party administrators bear the burden across the board for all types of employers, objecting or not, for-profit or not.  In that case, there would be no certification or facilitation required, so objecting employers would really have no leg left to stand on.  And the government’s articulated interests would be satisfied because women would have free access to the services in question without altering the current system of employment-based, private insurance.

So is it problem solved?  Probably not so fast.  The accommodation only works in a no-skin-off-anyone’s-back sort of way, which is the way it’s been billed, if it really is cost-neutral for insurers to take on this new role – and that’s hotly disputed. Unfortunately, it looks like the balance between employer and employee interests in this space will continue to be tough.  Just another reason why single-payer government healthcare would have been a zillion times better than the mess we’ve still got.

(And just for fun, my money is on a government loss in Hobby Lobby.)