Obamacare Expanded Insurance Coverage of Contraceptives. Prices Soared.

In today’s Los Angeles Times, Cato senior fellow Dr. Jeffrey A. Singer and I note that once the Affordable Care Act’s contraceptives‐​coverage mandate took full effect in 2014, “prices for hormones and oral contraceptives stopped falling and instead skyrocketed. By 2019, they had risen three times as fast as prices for prescription drugs overall.”

Here we provide the underlying data:

The Affordable Care Act (ACA) dramatically expanded insurance coverage for prescription contraceptives such as “the pill.” From August 2012 through January 2014, the federal government phased in the ACA’s requirement that nearly all private health insurance plans must cover all Food and Drug Administration‐​approved prescription contraceptives with no cost‐​sharing. In addition, from 2014 through 2017, the ACA enrolled an estimated 5 million previously uninsured women of child‐​bearing age in either private insurance plans subject to that mandate or in Medicaid, which also covers prescription contraceptives with no cost‐​sharing.

As a result of these changes, the share of consumers who are sensitive to the price of contraceptives plummeted. The Kaiser Family Foundation reports that, among women with large‐​employer coverage who use oral contraceptives, “the share experiencing out‐​of‐​pocket spending…declined from 94 percent in 2012 to 11 percent in 2017.” From 2012 through 2014, ACA‐​mandated coverage of contraceptives all by itself “account[ed] for nearly two‐​thirds (63%) of the drop in out‐​of‐​pocket spending on retail drugs” across all consumers.

The ACA’s reshaping of the market for oral contraceptives precisely coincided with a dramatic increase in prices for those items.