Executive Summary
Average out-of-pocket spending for the Pill and the IUD has seen a significant decrease since the implementation of the Affordable Care Act, new data show.
-
Results of an analysis of a large national insurer’s prescription claims database indicate the average out-of-pocket expense for a pill prescription fell from $32.74 in the first six months of 2012 to $20.37 in the first six months of 2013, which is a 38% decline, while similar expenses for an IUD insertion fell from $262.38 to $84.30, a 68% drop.
-
While the analysis showed drops in average out-of-pocket expense in other forms of contraception, little change was seen for the contraceptive vaginal ring (2%) and the contraceptive patch (3%).
Average out-of-pocket spending for the Pill and the intrauterine device (IUD) has seen a significant decrease since the implementation of the Affordable Care Act (ACA), new data show.1 Results of an analysis of a large national insurer’s prescription claims database indicate the average out-of-pocket expense for a pill prescription fell from $32.74 in the first six months of 2012 to $20.37 in the first six months of 2013, which is a 38% decline, while similar expenses for an IUD insertion fell from $262.38 to $84.30, a 68% drop.
“Our study found that before the mandate’s implementation, the cost of contraceptives for women using them represented a significant portion (30-44%) of total out-of-pocket health care spending,” said lead author Nora Becker, MPH, an MD/PhD candidate in the Perelman School of Medicine and the department of Health Care Management and Economics in the Wharton School at the University of Pennsylvania in Philadelphia. “We estimate that the ACA is saving the average pill user $255 per year, and the average woman receiving an IUD is saving $248.”
If such savings are spread over an estimated 6.88 million privately insured oral contraceptive users in the United States, consumer annual contribution to spending on the Pill could be reduced by almost $1.5 billion annually, Becker noted in a press release accompanying the paper’s publication.
Check the savings
The study’s findings are based on a sample consisting of 17.6 million monthly observations for 790,895 women ages 13-45 from all states and the District of Columbia who were enrolled in a large national insurer group for at least one month from 2008 to 2013. The data were leased by the University of Pennsylvania on the condition that the insurer not be identified.
The analysis calculated what women paid out of pocket for contraceptive methods before and after the ACA ruling came into effect in mid-2012. While the analysis showed drops in average out-of-pocket expense in other forms of contraception — emergency contraception (93%), diaphragms and cervical caps (84%), the contraceptive implant (72%), and the contraceptive injection (68%) — little change was seen for the contraceptive vaginal ring (2%) and the contraceptive patch (3%). The analysis says the contraceptive vaginal ring and the contraceptive patch still had median six-month costs of $35 and $60, respectively.
Why such low impact on cost savings? According to the Guttmacher Institute, while 2013 federal government information listed all covered methods, some insurers excluded the vaginal ring or patch by incorrectly claiming that they were medically equivalent to certain generic oral contraceptives, or they limited coverage to generic contraceptive products, even in cases in which a brand-name product had no generic equivalent, such as the vaginal ring.2 The government issued clarification in May 2015 that all methods must be covered, closing such erroneous loopholes. (The quarterly “Washington Watch” column in Contraceptive Technology Update reported on this update. See “Guidelines aim to improve contraceptive coverage,” July 2015. Also, download a copy of the update at http://1.usa.gov/1E2hZpF.)
The ACA calls for private health insurance plans to cover prescription contraceptives without a co-pay. So why did average out-of-pocket spending for contraceptives remain above zero in the analysis? Health plans phased in the requirement, so the change did not happen immediately for everyone, analysis authors note. Also, about one-third of all plans in 2013 were “grandfathered,” which means they had not substantially changed their cost-sharing requirements since the ACA was signed into law in March 2010. Such plans gradually are being phased out. In addition, employers that requested an exemption for religious reasons were exempt from the ACA requirement.
More ground to cover
Insurance companies must cover all 18 Food and Drug Administration-approved birth control methods for women without a co-pay, with limited exception. Despite the drop in co-payment requirements, the potential of their existence and the uncertainty of their magnitude still throw a wrench into the system, observes Anita Nelson, MD, professor in the Obstetrics and Gynecology Department at the David Geffen School of Medicine at the University of California in Los Angeles. Because a woman might face a substantial co-pay, clinicians have to double check each case, she notes. That “double check” often prevents same-day provision of implants and IUDs in two ways, states Nelson.
“First, the answer may not be available quickly [a staff member has to inquire], and second, the clinician may have to order the IUD or implant in the patient’s name and will not have a unit available to place that day,” says Nelson. “We will need to get rid of all remnants of the copayment system before we will be able to meet current standards.”
It is possible that by decreasing out-of-pocket expenses, more women will use contraception or switch to a longer-term method, said analysis co-author Daniel Polsky, PhD, executive director of the Leonard Davis Institute of Health Economics and professor of Medicine in the Perelman School of Medicine, both at the University of Pennsylvania. However, additional research is needed to determine the socioeconomic and health effects for women, he stated.
“In the long term, if we do, in fact, see an increase in the use of contraceptives, that could potentially lead to a lower overall fertility rate, and potentially increased economic opportunities for women and their families,” said Polsky in a statement issued with the data publication.
-
Becker NV, Polsky D. Women saw large decrease in out-of-pocket spending for contraceptives after ACA mandate removed cost sharing. Health Aff (Millwood) 2015; 34(7):1204-1211.
-
Guttmacher Institute. New Obama administration guidance aims to improve contraceptive coverage. Web: http://bit.ly/1P1Wgpm.
