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Nearly two years after ObamaCare was signed into law, we are still finding out what was really in the 2,801 page bill. Many are shocked to find out that the intrusive law contains a provision that forces all employers to provide “free” birth control to all female employees by August 2013. Of course, there’s no such thing as a free lunch or free contraception in this instance. Most conservative bloggers have primarily focused on how the birth control requirement violates freedom of religion but it’s important to examine the mandate from an economic standpoint as well.
All of us should remember the old adage that goes “if one can frame the debate, one wins the debate.” Without fully realizing it, libertarians and fiscal conservatives all too often allow the left to frame the debate. The left has framed the birth control mandate debate as a battle between pro- and anti-birth control advocates. Leftist political pundit Rachel Maddow has claimed that the GOP is declaring a “war on birth control.” But that is entirely misleading; the real debate is between individual rights vs. government force.
Those opposed to the mandate are not necessarily against birth control. Some are but many are not. The left often accuses libertarians and fiscal conservatives of being opposed to a certain good or service just because we do not want it provided or mandated by the government. This intellectually dishonest debate tactic has been used for centuries in attempts to discredit free market supporters.
As Frédéric Bastiat wrote in his timeless book The Law, “socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”
These accusations are far from the truth. True free market supporters believe that all economic activity should be voluntary for everyone. This means that individuals should be free to buy, sell and produce whatever good they desire without government coercion. Forcing employers to provide “free” birth control coverage violates the principles of a free and peaceful society. No one would be legally forced to provide or buy a product that offends their personal beliefs and values in a pure free market economy.
The birth control mandate debate has centered around religious freedom but its likely unintended economic consequences should not be ignored. The mandate has moral hazard written all over it. Moral hazard occurs when people change their behavior when they are insulated from the real cost of their actions. Women are less likely to carefully consider their birth control options if they are getting it for “free.” As economist Peter Schiff says, “when women are buying their own birth control, they are shopping around. The price is a consideration. When they get it for ‘free’, price is no consideration.” Women will be more inclined to take the most expensive birth control option regardless if it makes the most sense.
This means that the mandate will ultimately increase the price of contraception. Peter Schiff further explains that “the problem is when you get something for free, behavior changes. People use things a lot more when they are free and you drive up the cost.” The economic reality is that there is a cost to everything. No matter how well-intentioned government legislation may be, it simply cannot repeal the law of scarcity. Birth control will never be free.
Insurance company Blue Cross has unofficially announced that it would cost $2.8 billion to cover contraception. This cost will eventually be passed onto all consumers in the form of higher insurance premiums. It reminds me of the popular P.J. O’Rourke quote, “if you think health care is expensive now, wait until you see what it cost when it’s free.” Just replace "health care" with "birth control" in that quote.
Another unintended consequence associated with the birth control mandate is that it could lead to gender discrimination in the hiring process. It will cost employers more money to hire women since they are forced to provide them with contraceptive coverage. Employers are not required to provide men with additional coverage. The cost of employing a woman will increase whether she wants birth control or not. The supposedly well-intentioned law will actually end up hurting women.
The birth control mandate not only violates freedom of religion but it will drive up the price of contraception and may lead to female discrimination. This is just one more reason why we need to get the government out of health care in order to allow the free market to flourish.
Please check out the Peter Schiff video on the birth control mandate below: