A Curious Take on the Catholic/Contraception

Recently, the Obama administration mandated coverage of contraceptive health products in health plans offered by employers, without an exemption given to Catholicism-based employers.  Over 75% of Catholic women use contraceptive products which is very close to the national average.  Virtually all women have used contraceptive products at some point in their lives.

So, what's the problem...the problem is that the some parts of the current ideology of the Catholicism does not approve of the use of contraceptives...not for anyone, even to prevent AIDS.  One way of looking at this issue is that the federal government is putting mandates on the employer who is putting mandates on the employee.



Such a problem highlights an absurdity and the economic inefficiency of employer-based health insurance.  Let me note, that this was an idea proposed to me by a friend at lunch the other day and not my own idea.  Given the almost all women use contraceptive products, why should these employees be under the tyranny of employer-chosen health insurance coverage.  I do not mean to say that I'm against employer-provided health care, but it is important to note that because of the current health care insurance market, employer preferences take precedent over employee preferences.  My point is that while this current dispute has to do with government mandates on employers, there is a more important (but less known) about employer mandates on employees.

It makes more economic sense for employees to decide what preferences they want rather than having the employer decide.  Therefore, it would make more sense for employee preferences to express themselves at the market because it is the employee that ultimately pays the costs and receives the benefits of health insurance coverage.  Bargaining power that is lost with this change in regime can be made up for by individuals joining together in risk pools who can have more negotiating power with insurances.

Another problem with employer-provided health insurance, is that it creates inefficient-stick labor markets.  This is when employees, who otherwise would switch jobs (towards, presumably a better fit), don't simply because of the employer-offered health insurance plan.  Here are some more interesting points on this topic.

Let me also note that this isn't an argument against decreased compensation packages, with the money employers save on not having to purchase health coverage, they can pay their employees more in cash.