July 8, 2015 — Women's out-of-pocket spending on most major forms of contraception dropped significantly in the months following the implementation of an Affordable Care Act (PL 111-148) provision that requires insurers to cover contraception at no cost, according to a recent study published in Health Affairs, the New York Times reports.
Under the ACA, insurers must cover the full cost of prescription contraception and other preventive services. The rule, which took effect August 2012, required insurers to comply by the start of the new plan period. For many members, that period started Jan. 1, 2013.
For the study, researchers at the University of Pennsylvania reviewed health insurance claims from a private insurer that operated in 50 states and Washington, D.C. The researchers used the claims data to assess the contraceptive use of 790,000 women ages 13 to 45 between 2008 and 2013.
According to the Times, the researchers set the 2008 data as a baseline on prescription contraception spending and then compared such spending in the first six months of 2013 -- once the contraceptive coverage rule took effect -- with the first six months of 2012 (Tavernise, New York Times, 7/7). Specifically, the study assessed women's mean and median out-of-pocket medical costs and what percentage of such spending was put toward contraception among women using oral contraception and those who opted for intrauterine devices.
The researchers found that among women who filed at least one claim for oral contraception in both time periods, the mean percentage of out-of-pocket medical spending put toward oral contraception declined from 44% in the first six months of 2012 to 22.4% in first six months of 2013. Similarly, the median percentage of out-of-pocket costs put toward oral contraception between the two time periods declined from 36% to 0%.
Meanwhile, the researchers found that among women who received an IUD during the two time periods, the mean percentage of out-of-pocket medical spending put toward contraception declined from 30.3% to 11.3%, while the median percentage dropped from 13.2% to 0% (Becker/Polsky, Health Affairs, 7/7).
Further, the researchers found that spending on oral contraception declined by about 50%, from about $244 in the first period to $117 in the second (New York Times, 7/7). According to the study, spending on individual oral contraception prescriptions dropped by 38% between the two time periods, from $32.74 to $20.37, while out-of-pocket spending on IUD insertion declined by 68%, from $262.38 to $84.30. Meanwhile, spending dropped by 93% for emergency contraception; by 84% for diaphragms and cervical caps; by 72% for implants; and by 68% for injections. By contrast, spending dropped by only 2% for the ring and by only 3% for the patch.
Nora Becker, lead author and a University of Pennsylvania MD/PhD candidate, said, "We estimate that the ACA is saving the average pill user $255 per year, and the average woman receiving an IUD is saving $248." Overall, she noted that, "[s]pread 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" (Preidt, HealthDay/U.S. News & World Report, 7/7).
According to the Times, the study did not definitively determine that the ACA was the factor lowering costs, though experts have said that the timing and size of the decline indicate it was the case (New York Times, 7/7).
Out-of-Pocket Costs Not Yet Eliminated
The researchers noted out-of-pocket spending on contraception did not fall to zero because of grandfathered insurance plans and because certain plans were eligible for an exemption to the rule. Further, insurers are not required to cover all brands of each FDA-approved contraceptive method without cost sharing (HealthDay/U.S. News & World Report, 7/7).
In addition, according to Kaiser Health News, some insurers had not been providing no-cost coverage for certain contraception methods -- such as the ring and patch -- contending that they were similar to already covered methods, such as the pill. However, the Obama administration has since clarified that insurers must cover at least one type of each contraceptive method.
Becker noted that making contraception less costly might not increase the number of women who use it but could cause women to adopt different, more-effective methods. She said, "If prior to the ACA a woman was facing $10 to $30 a month for the pill but hundreds of dollars upfront for an IUD and now both are free, we might see a different choice" (Rovner, Kaiser Health News, 7/7).
Study co-author Daniel Polsky, executive director of the University of Pennsylvania's Institute of Health Economics and professor of medicine, in a statement said, "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" (HealthDay/U.S. News & World Report, 7/7).