Contraception Mandate Shows Economic Illiteracy

Friday, 08 Feb 2013 07:41 AM

By Michael Carr

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The nation might be headed for low investment returns and a long-term depression if the latest Obamacare mandate illustrates the economic thinking of the administration and the general public.

Contraceptives have been deemed a minimum benefit and will now be available at no cost to anyone with insurance. Employees of religious organizations will get their contraceptives from the insurer who will provide them for free.

The disturbing part of this rule, putting aside the moral and constitutional issues, is that Americans believe anything can be free. Someone must be paid for the raw materials used by the manufacturers and someone must pay the manufacturers. Insurance companies have not been in the pharmaceutical distribution business before and someone must pay for them to create an infrastructure to distribute free contraceptives.

Also overlooked in the push for free benefits is the cost of complying with regulations that ensure no consumer is being charged for anything.

Surprisingly, this issue has been focused only on who should be handing out the freebies rather than the reality that there is no free lunch. Obamacare already requires free annual physicals that insurance companies pay for.

Free healthcare is setting up an inevitable chain of events. Insurers will raise premiums because they are allowed a certain amount of profit under Obamacare. Companies will drop health insurance benefits that become unaffordable, and government subsidies will be provided to more than 80 percent of the households in the nation, those earning less than $93,000 a year.

Subsidies require higher taxes or more borrowing, both actions that will hurt economic growth and lead to lower investment gains for years to come, all so that no one can be accused of being at war with women.

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