The administration seeks middle ground on Obamacare’s contraceptive mandate, but opponents may not buy it

The Supreme Court ruled in June that the government may not force closely held companies to cover contraceptives in their health plans over the religious objections of their owners. The plaintiffs in the case, Hobby Lobby Stores and two other closely held corporations, had challenged an Obamacare rule requiring insurance plans to pay for all forms of contraceptives without co-payments or deductibles. (To read the full decision, click here.) 

Last week, the Obama administration proposed a change to the rule to comply with the Supreme Court decision. It would allow some for-profit companies that have a limited number of owners to avoid covering some or all contraceptives by informing the government of their objection. The government would then contact the insurance company involved, which would be required to offer a separate policy for contraceptives directly to the employees with the government picking up the tab. (To read a summary of the proposed rule, click here.)

The proposal is similar to a rule the administration had issued for religious organizations, like hospitals and universities. That rule allowed the organizations to inform their insurers of their objections and required the insurers to offer a separate contraceptive policy to employees at government expense.

When it announced last week’s proposal for for-profit companies, the administration also announced that it was modifying the rule for religious organizations. No longer must they inform the insurance company of their objection, a requirement to which many of them had objected. Now, they, too, notify the government.

In its decision in the Hobby Lobby case, the Supreme Court suggested that the original rule for religious organizations presents a reasonable solution for for-profit companies. In a subsequent interim order involving a religious school in Illinois, Wheaton College, it also signaled approval of the government notification approach for religious organizations.

But some opponents of the contraceptive mandate are still not satisfied. The Family Research Council called it an “accounting gimmick.” The Southern Baptist Convention complained that it “doesn’t get at the primary problem.”

If this proposal is not acceptable, is there any compromise that would be?

There is one alternative that would work for both sides. That is to take the burden of providing health insurance away from employers entirely and place it on the government. That way the government could guarantee contraceptive coverage while keeping companies from having to provide it. The dispute may end up giving advocates of single payer health care a major boost.

The administration’s proposal is not final. It is open for comment for the next 60 days, and plenty of them are expected.

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