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Birth control saves money. Lots of it.

VoxJuly 9, 2014Articles

Put aside the political and religious fights for a moment. There’s a simple fact about contraception that gets lost in much of the coverage: it saves money. Lots of money.

Daniel Liebman, a researcher at Harvard’s School of Public Health, rounded up the evidence at the Incidental Economist. It begins with basic arithmetic: insurers pay $18,329 for the average vaginal delivery and $27,866 for the average C-section (and because our health-care system can be startlingly cruel, prices for the uninsured are much higher: $30,000-$50,000). Nearly half of these pregnancies are unplanned — and direct costs from unintended pregnancies total more than $5 billion annually.

Contraception costs $100-$600 annually and cuts the risk of unplanned pregnancies to nearly nothing. Liebman finds various estimates of the savings: One paper put it at $6,000-$10,000 per person for every two years on contraception. Another put it at $13,000 over five years of contraceptive coverage. A study of Medicaid found that contraceptive services saved $4.26 for every dollar invested.

And these estimates are low. They count direct medical costs: how much money was (or wasn’t) spent on, say, delivering a child. But they don’t count how much more money a women made over her lifetime because her education or her career wasn’t interrupted by an unplanned pregnancy. And they don’t count, of course, the emotional benefits of being able to plan when to start a family.

Colorado recently announced that a program to provide free contraceptive services to low-income women contributed to teen births falling by 40 percent. “This initiative has saved Colorado millions of dollars,” Governor John Hickenlooper said in a statement. “But more importantly, it has helped thousands of young Colorado women continue their education, pursue their professional goals and postpone pregnancy until they are ready to start a family.” (More on that program here.)

For all the talk of Hobby Lobby, this is why businesses generally cover birth control: it just makes good economic sense. The National Business Group on Health found, in a 2000 study, that employers who didn’t offer contraceptive coverage spent 15 percent to 17 percent more because of the costs of pregnancy and reduced productivity. In a 2007 report, the group recommended that employers “Make sure that your plans cover comprehensive contraception options (e.g., hormonal pills, sterilization, IUDs, etc)” and “reduce or eliminate copays/coinsurance on these interventions, which help prevent unintended pregnancies.”

 

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