Contraceptive Coverage and Massachusetts Law

According to a National Conference of State Legislatures report in August 2011, at least 26 states by law require insurers that cover prescription drugs to also provide coverage for any Food and Drug Administration (FDA) approved contraceptive, including: Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, West Virginia and Wisconsin.

So contraceptive coverage in Massachusetts is a mandated benefit for individuals and employers who purchase state-licensed health insurance policies. Importantly, this law has no effect on the large majority of large employers who "self-insure" -- more than half of the privately insured market. The requirement is located in Section 47W, Chapter 175 of the General Laws. Here are the essential parts:

Section 47W. (a) Any individual policy of accident and sickness insurance issued pursuant to section 108 and any group blanket policy of accident and sickness insurance issued pursuant to section 110 that is delivered, issued or renewed within or without the commonwealth and that provides benefits for outpatient services shall provide outpatient contraceptive services under the same terms and conditions as for such other outpatient services. Outpatient contraceptive services shall mean consultations, examinations, procedures and medical services provided on an outpatient basis and related to the use of all contraceptive methods to prevent pregnancy that have been approved by the United States Food and Drug Administration.

(c) This section shall not apply to an individual policy of accident and sickness insurance delivered, issued or renewed pursuant to section 108 or any group blanket policy of accident and sickness insurance delivered, issued or renewed pursuant to section 110 if that policy is purchased by an employer that is a church or qualified church-controlled organization, as those terms are defined in 26 U.S.C. section 3121(w)(3)(A) and (B).

So we have to dip into federal law to find out what the "church or qualified church controlled organization" exemption means. At your service:

(3) Definitions
(A) For purposes of this subsection, the term "church" means a church, a convention or association of churches, or an elementary or secondary school which is controlled, operated, or principally supported by a church or by a convention or association of churches.
(B) For purposes of this subsection, the term "qualified church-controlled organization" means any church-controlled tax-exempt organization described in section 501 (c)(3), other than an organization which:

(i) offers goods, services, or facilities for sale, other than on an incidental basis, to the general public, other than goods, services, or facilities which are sold at a nominal charge which is substantially less than the cost of providing such goods, services, or facilities; and (ii) normally receives more than 25 percent of its support from either (I) governmental sources, or
(II) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades or businesses, or both.

By the way, this federal statutory reference appears in many of the state mandated benefit laws on contraceptive coverage -- so Massachusetts lawmakers did not dream up this citation on their own.

Quite clear, it seems to me (disclosure -- I'm not a lawyer), that this qualification would not let any large Catholic hospital or university off the hook. With one big, big exception, namely, employers who self insure, who are exempt from any and all state regulation relating to their plans. Thus, Boston College, for example, can do what it wants on this matter...

...Until August 1, 2013, when this requirement will apply to all such organizations as part of the implementation of the Affordable Care Act (yes, this is part of the ACA).

By the way, our State's Division of Health Care Finance and Policy has been tracking and reporting on state mandated benefits for a number of years. Below is from their last review in July 2008:

e. Contraceptive Services
The contraceptive services mandate requires health plans to cover outpatient services related to the use of all contraceptive methods to prevent pregnancy. This mandate does not apply to insurance policies purchased by a church or church-controlled organization. RDCs of this mandate included all claims for outpatient contraceptive procedures and consultations, all claims for evaluation and management with a contraception-related diagnosis, and all pharmacy claims for contraceptive drugs and devices. Total estimated claims PMPM were $1.14, with a total PMPM of $1.33 (or 0.44% of the total premium) after administrative loading.

Research suggests that contraceptives are generally effective; however, effectiveness varies with both the type of contraceptive used and its user. When comparing the rate of pregnancies among people who "typically use" a contraceptives, abstinence and surgical sterilization are the most effective forms of contraception available. Among prescribed, reversible contraception methods, implants are the most effective (0.05 pregnancies per 100 women), while cervical caps are the least effective (14 to 29 pregnancies per 100 women).  Cost-effectiveness research done with people on Medicaid found that contraceptive services reduced Medicaid funded costs for pregnancy-related health care and medical care of newborns, as well as other costs such as those associated with high risk pregnancies. Mandating coverage of contraceptive services increases the range of contraception methods available to women who do not wish to become pregnant. Covering contraceptives may also have the added benefit of drawing women who may otherwise not seek out medical care to clinics to have routine check-ups.

So, bottom line: the new federal regulations will require coverage of contraceptives in all employer based plans beginning August 1st of this year. Religiously-affiliated employers will have an additional year to comply -- and litigation to stop the the new rule is already certain. How many employers do not offer contraceptive coverage? We don't know. The Alan Guttmacher Institute reported in 2004 that 90% of employer-based plans offer this coverage, though they did not include self-insured plans in that estimate.

By the way, here's an intriguing bit of information mentioned in today's ThinkProgress:  Boston College and the six former Caritas Christi hospitals (now known as Steward Health Care System) offer coverage for contraceptive services as part of the employee health benefits. 

Comment: Decisions on what to cover and what not to cover are often the most emotional and contentious issues in health policy.  Usually, a decision not to cover a medically necessary service (as contraception is) meets a chorus of cries of "rationing."  No such accusations flowing now because it's the folks who like to scream "rationing" who want the right to continue doing it themselves.