The Alan Guttmacher Institute: U.S. Policy Can Reduce Cost Barriers to Contraception (07/99)

U.S. Policy Can Reduce Cost
Barriers to Contraception

Unintended pregnancy is a major problem in the United States that cuts across racial, ethnic, socioeconomic and demographic lines. By helping women to time and space their births, contraceptive use helps avoid the adverse health, social and economic consequences associated with unintended pregnancies.

In stark contrast to the situation in other developed nations, where contraceptives are easily affordable under universal health insurance systems, contraceptive supplies and services are expensive in this country, and American women must rely on a variety of fragmented systems and programs to help them cover these costs. In the absence of a more comprehensive system, any effective public policy effort to reduce levels of unintended pregnancy--and the abortions or unwanted births that inevitably result--must focus on strengthening the ability of these various systems and programs to meet the contraceptive needs of women and couples across the nation.

Background
Every year, three million pregnancies in the United States, or half of all pregnancies among American women, are unintended. These pregnancies often cause significant hardship for women, their families and society at large. For many women, an unintended pregnancy is a difficult, even life-altering, experience--because it occurs when the woman is too young to be a parent or is unmarried, too soon after her previous birth or after she has achieved her desired family size.

Unintended pregnancies have ramifications for individual and public health. Women who experience such pregnancies are less likely to obtain timely prenatal care than those whose pregnancies are planned; as a result, their chances of adverse health outcomes increase. Health risks are also heightened when pregnancies follow shortly after another birth or occur among young adolescents or women past their childbearing prime.

Additionally, an unintended pregnancy may threaten a woman's ability to complete her education and participate in the workforce, jeopardizing her ability to support herself and her family. For this and other reasons, half of women experiencing an unintended pregnancy seek abortion--a reality that causes considerable anxiety and division among policymakers and within the general public.

However, using contraceptives is effective in reducing rates of unintended pregnancy. In any given year, 85 of 100 sexually active women not using a contraceptive become pregnant. By contrast, among women taking birth control pills (the most commonly used reversible method), only eight of 100 become pregnant. It is therefore not surprising that about half of all unintended pregnancies occur among the small proportion (7%) of women at risk of such pregnancies who do not use birth control.

One of the major barriers to universal contraceptive access in this country is that contraceptives can be expensive. For example, costs for supplies alone can run approximately $360 per year for oral contraceptives, $180 per year for the injectable, $450 for the implant and $240 for an IUD. In addition, the bulk of the cost for some of the most effective methods must be paid up front.

While most U.S. women rely on employer-based private insurance to pay for their health care, these plans historically have provided far less extensive coverage for contraceptives than for most other prescription drugs and devices. Public programs--Medicaid, the health insurance program for the poorest Americans; and Title X, the family planning safety-net program for low-income women without another source of payment--exist to help those who lack adequate private insurance. But many low-income Americans do not qualify for Medicaid, and Title X funding has not kept pace with program costs or inflation, hindering the program's ability to serve all those seeking care. Thus, many women, even those who are privately insured, face financial barriers to obtaining their chosen contraceptive methods.

Private Insurance
Three-quarters of American women of childbearing age rely on private insurance to defray their medical expenses. Yet many private insurance plans provide inadequate coverage of contraceptive services and supplies. This gap increases many women's risk of experiencing an unintended pregnancy and helps explain why women of reproductive age spend 68% more on out-of-pocket health care costs than do men.

Half of traditional indemnity (fee-for-service) plans do not cover any reversible contraception (Chart A), and only 15% cover all five prescription methods--the pill, IUD, diaphragm, implant and injectable. While 97% cover prescription drugs, only 33% cover the pill.

chart a Private Insurance Many plans cover no contraception at all.

49	49	19	7
Note: Prescription methods are the oral contraceptive, IUD, implant, injectable and diaphragm.

Of the major types of health insurance plans, traditional health maintenance organizations (HMOs)--in which participants may obtain a wide range of care, but through a limited network of providers--offer the most comprehensive contraceptive coverage. Nevertheless, 7% cover no prescription contraceptives, and only 39% cover all five.

Preferred provider organizations and point-of-service networks--systems in which enrollees have considerable flexibility in their choice of providers but pay more out of pocket if they do not use a designated or network provider--fall somewhere between indemnity plans and HMOs in their levels of coverage.

In sharp contrast to reversible contraceptives, sterilization is covered in almost nine in 10 plans of
all types, and abortion in two-thirds.

Full contraceptive coverage in private insurance plans would be inexpensive and is popular among consumers.

Providing full contraceptive coverage in employment-based plans would cost, at the most, only $21.40 per employee per year. For employers whose current plans offer no contraceptive coverage, the average cost of adding it, assuming that employers contribute 80% of the cost, would be $17.12 per year (or $1.43 per month) per employee, a premium increase of less than 1%. Employees' 20% share of the cost would be $4.28 per year. Added costs would be less for plans that already cover at least some methods.

A nationwide poll indicated that 78% of privately insured adults support contraceptive coverage, even if it would increase their costs by five dollars a month--some 14 times the actual amount an employee would pay.

Policy initiatives at the state and federal levels promise to improve contraceptive coverage through private health insurance by requiring plans to cover contraceptives to the same extent that they cover other prescription drugs.

In 1998, Congress moved to require full contraceptive coverage in plans participating in the Federal Employees Health Benefits Program, the world's largest employer-sponsored health plan, which includes 1.2 million women of reproductive age.

That same year, Maryland became the first state to enact a law requiring full contraceptive coverage in private insurance. By July 1999, eight states had followed suit (Connecticut, Georgia, Hawaii, Maine, Nevada, New Hampshire, North Carolina and Vermont).

The federal Equity in Prescription Insurance and Contraceptive Coverage Act of 1999 would require contraceptive coverage for all privately insured women enrolled in plans with a
prescription drug benefit.

Need for Public Programs
Expanding access to family planning (contraceptives and closely related services) has been a major aim of the U.S. government since the mid-1960s. Federal support for family planning services derives principally from two sources: Medicaid, the joint federal-state health insurance program for poor Americans (created through Title XIX of the Social Security Act); and Title X of the Public Health Service Act, the only federal program devoted solely to the provision of family planning services. These programs have a long history of success in providing contraceptive services and reducing unintended pregnancy among low-income women, teenagers and other women in need of subsidized services; they also have made their mark by improving the health and financial well-being of women and their children.

Each year, publicly funded contraceptive services help women avoid 1.3 million unintended pregnancies, which would result in 534,000 births, 632,000 abortions and 165,000 miscarriages. Services provided by clinics receiving funds under Title X are responsible for averting one million of these pregnancies.

In the absence of publicly funded contraceptive services, the number of abortions performed in the United States would grow by 40%.

If publicly funded contraceptive services were unavailable, an additional 386,000 teenagers would become pregnant each year. Of these, 155,000 would give birth, increasing the number of teenage births by one-quarter. Another 183,000 would have abortions, increasing the number of abortions among teenagers by nearly three-fifths. The remainder, roughly 48,000 teenagers, would have miscarriages.

Without publicly funded contraceptive services, an additional 356,000 unmarried women would give birth each year, increasing total out-of-wedlock births by
one-quarter.

A 1992 North Carolina study found that women who used publicly funded family planning services in the two years before conception were more likely than those who did not use such services to begin prenatal care early and to receive adequate levels of care throughout pregnancy.

By helping women to plan and space births, publicly funded contraceptive services prevented 20,000 occurrences of low birth weight, 6,500 infant deaths and 5,500 neonatal deaths between 1982 and 1988.

In addition to providing these social and medical benefits, publicly funded family planning is cost-effective.

Every public dollar invested in family planning saves three dollars in Medicaid costs for pregnancy-related health care and medical care for newborns.

Without publicly funded family planning, Medicaid expenditures for maternal and newborn care would increase by $1.2 billion each year.

Medicaid
Under Medicaid, the federal government and the states share the cost of providing medical care to eligible low-income individuals. The program is the largest source of public funds for contraceptive services in this country. In FY 1994, Medicaid expenditures for contraceptive care totaled $332 million.

Given the importance of equalizing access to family planning services for low-income women, the Medicaid program provides special consideration for these services.

The federal government reimburses states for 90% of their costs for family planning services; for all other medical services, the rate is 50-80%.

The Medicaid statute prohibits the imposition of copayments or deductibles for family planning services.

Because of the sensitive nature of family planning services, Medicaid recipients participating in managed care are allowed to obtain such services from the provider of their choice, even if that provider is not affiliated with their plan.

States set income eligibility requirements for the program within broad federal parameters, but many low-income women in need of contraceptive services fail to qualify. Recognizing the value of family planning services, states have petitioned the federal government for special permission to expand services to women with incomes above their general eligibility ceilings.

State-set ceilings for women with children range from 15% of the federal poverty level in Alabama to 86% in California and average 46% nationally.

Special federal eligibility guidelines apply to pregnant women: States must cover pregnant women with incomes up to 133% of the federal poverty level, and may go as high as 185%. These women qualify for care, including family planning services, for 60 days following delivery, at which time their Medicaid eligibility expires.

By the end of 1998, the federal government had approved special waivers allowing 12 states to expand eligibility for family planning by either continuing eligibility beyond the 60-day postpartum period or covering women with higher incomes than would otherwise be allowed.

Benefits of expanded eligibility are already evident in Rhode Island, one of the first states to obtain a waiver and, therefore, to generate data. The number of women having Medicaid-funded deliveries who became pregnant within nine months of a previous birth fell by almost 50% within the first three years of the program. Furthermore, while the state estimates that it spent $5.7 million on family planning between 1994 and 1997, it reports having saved $14.3 million in costs related to deliveries and newborn care.

Many states, however, have found the waiver process--with federal approval taking up to three years--to be time-consuming and cumbersome. In response to their concerns and other states' interest in expanding Medicaid eligibility for family planning, federal legislation introduced in 1999 (the Family Planning State Flexibility Act) would allow them to do so on their own, without first obtaining a federal waiver.

Title X
Title X is a critical source of assistance for low-income women and teenagers, who often are uninsured or have insurance under a plan that does not include adequate coverage of contraceptives. The program was created in 1970 with broad bipartisan support in response to research showing that rates of unwanted childbearing among low-income women were at least twice those for more affluent women.

Over the past three decades, the Title X clinic system has played a major role in helping women prevent unintended pregnancies, abortions and unplanned births. While Medicaid is the largest public funder of family planning services, Title X remains the heart of the national family planning system, largely determining both its structure--through the nationwide network of clinics--and the types and quality of services that are provided to subsidized and fee-paying clients alike.

Each year, 4.5 million young and low-income women obtain care through the 4,400 Title X-supported family planning clinics nationwide; for many, these clinics are the first point of entry into the health care system.

In addition to financing the provision of contraceptive services, Title X funds support a wide range of reproductive health care, including pelvic and breast examinations, blood pressure checks, Pap smears, and testing and treatment for sexually transmitted diseases.

To ensure that women receive services on a purely voluntary basis, the Title X statute and regulations require that clinics offer clients a range of contraceptive choices on a confidential basis. They also contain safeguards to ensure that women are not pressured to accept a particular contraceptive method--or any method at all.

By statute, the amount a clinic can charge a woman depends on her ability to pay. If her income is below the federal poverty level, the clinic must provide the services free of charge. If her income is between 100% and 250% of poverty, she must be charged on a sliding-fee scale; she pays full fees if her income is above 250% of poverty.

Today, Title X-supported clinics face the challenge of maintaining high-quality care while they confront increasing costs of contraceptives and reproductive technologies, the need to serve growing numbers of uninsured women, and the imperative to expand service delivery to males and hard-to-reach populations such as substance abusers and the homeless.

Title X is unable to serve all those in need of contraceptive services. At least one million U.S. women with incomes below 250% of the federal poverty level are not using any form of contraception even though they are at risk of having an unintended pregnancy--that is, they are sexually active and capable of becoming pregnant but do not wish to do so.

The program needs to expand service capacity to accommodate the increasing numbers of the uninsured. The number of Americans without any public or private health insurance coverage has increased by 10 million over the last decade to 43 million people.

The squeeze on Title X dollars grows even tighter as clinics increasingly serve individuals--often free of charge--who have lost Medicaid coverage because of welfare reform.

Funding for the program has not kept pace with inflation. In terms of constant dollars, the FY 1998 funding level of $203 million represented a 61% decrease since the FY 1980 funding level of $162 million (Chart B).

chart b
Title X Funding

When inflation is taken into account, funding for Title X has decreased over the years.

Notes: Calculation of constant dollars based on Consumer Price Index for Medical Care. Years shown are fiscal years.

Conclusion
Given the absence of universal contraceptive coverage in the United States, public policies designed to reduce unintended pregnancy rates--which are high compared with those of other developed countries--must concentrate on strengthening each piece of the existing patchwork system. This includes making sure that private insurance fully covers contraceptive supplies and services, that states can easily extend Medicaid family planning services to all poor women desiring contraceptives, and that Title X is adequately funded to meet program costs and to serve growing numbers of people.

Expanding access to contraceptives will not by itself solve the problem of unintended pregnancy; much more can and should be done to achieve this goal. At a minimum, other necessary measures include investing in contraceptive research to improve and increase the range of available methods, and promoting responsible sexuality education that supports and encourages young people who want to delay sexual initiation, even as it prepares them to protect themselves against unplanned pregnancy when they do become sexually active. But clearly, increasing access to contraception must be at the heart of any national strategy to reduce unintended pregnancy.

Sources of Data
The Alan Guttmacher Institute (AGI), Uneven and Unequal: Insurance Coverage and Reproductive Health Services, New York: AGI, 1994.

Dailard C, Title X family planning clinics confront escalating costs, increasing needs, The Guttmacher Report on Public Policy, 1999, 2(2):1-2 & 14.

Darroch JE, Cost to Employer Health Plans of Covering Contra-ceptives, New York: AGI, 1998.

Families USA Foundation, Losing Health Insurance: The Unintended Consequences of Welfare Reform, Washington, DC: Families USA Foundation, 1999.

Forrest JD and Samara R, Impact of publicly funded contraceptive services on unintended pregnancies and implications for Medicaid expenditures, Family Planning Perspectives, 1996, 28(5):188-195.

Gold RB, State efforts to expand Medicaid-funded family planning show promise, The Guttmacher Report on Public Policy, 1999, 2(2):8-11.

Henshaw SK, Abortion incidence and services in the United States, 1995-1996, Family Planning Perspectives, 1998, 30(6):263-270 & 287.

Jamieson DJ and Buescher PA, The effect of family planning participation on prenatal care use and low birth weight, Family Planning Perspectives, 1992, 24(5):214-218.

Kaiser Family Foundation, National Survey on Insurance Coverage of Contraceptives, Menlo Park, CA: Kaiser Family Foundation, 1998.

Meier KJ and McFarlane DR, State family planning and abortion expenditures: the effect on public health, American Journal of Public Health, 1994, 84(9):1468-1472.

U.S. Bureau of the Census, Health insurance coverage: 1997, Current Population Reports, 1998, Series P-60, No. 202.

Women's Research and Education Institute (WREI), Women's Health Insurance Costs and Expenditures, Washington, DC: WREI, 1994.

Credits
This Issues in Brief was written by Cynthia Dailard and was supported in part by The Andrew W. Mellon Foundation.

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