Stupak “Rider” Should Be Actuarially Sound

November 13th, 2009 by Al Lewis (alewis)

ABORTION COVERAGE IS ABOUT MATH AS WELL AS POLITICS

 

Let us start by acknowledging that those who think abortion is a sin must be respected, and not forced into a risk pool that covers abortion.  Let us also acknowledge that those who are pro-choice need to accept the beliefs of those who are pro-life, and recognize that abortion (except in the case of rape or incest or potential significant harm to the mother) is a personal choice (albeit usually as a result of an accident) rather than a health issue in the narrow sense of the word.  Therefore it is not beyond the bounds of reasonability to require an actuarially appropriate rider to cover it.

 

What would that “actuarially appropriate rider” be?  Probably a dollar or two a month to begin with.  Figur there are 800,000 abortions per year.  They cost maybe $1000 apiece.  That’s $800,000,000.  Divided by the 21-65 year-old health-insurance-buying population, we are talking about roughly $4/year.  Next, figure some self-selection into the rider, so that people with the rider might average think they have (for instance) three times the probability of an unwanted pregnancy than people without the rider.  Therefore their likelihood of abortion is three times higher than the average on which the above calculation was based.  So that $4 becomes $12/year or $1/month, to begin with. 

 

Note the phrase “to begin with.”  Remember, we are talking about insurance here, and insurance is based on math and math is not a belief system.  It is immutable.   Is it not pretty to discuss abortion mathematically, but immutability trumps belief, whether one is pro-choice or pro-life.   Therefore, an actuarially appropriate rider must reflect the total cost differential caused by abortion coverage between the risk pool with coverage and the risk pool without coverage.

 

Note the phrase, “the total cost differential.”   In future years, the $1 rider would have to be adjusted not just by changes in the abortion rate and procedure cost, but also by the relative accidental birth rates (and pregnancy/delivery/neonatal costs) in both groups.  Since there is no way of knowing the true accidental birth rate, perhaps the birth rate to minors could be used as a proxy, as most such pregnancies could be qualified as unplanned.

 

If in fact, the abortion rate and cost remain the same, and the accidental birth rate proves to be the same in both the pool with the coverage and the pool without, then the rider remains at $1 in future years.  If that happens, it means that no minor in the pool with abortion coverage was more likely to get an abortion because it was covered, and – using minors as a proxy for accidents – covering abortion did not reduce the number of accidental births.   Each abortion avoided an incremental pregnancy and therefore, there was no cost savings to the plan by covering abortion.

 

If in fact, the accidental birth rate turns out to be higher in the risk pool without abortion coverage, it implies that some people in the abortion pool were more likely to get an abortion than those in the other pool.   In that case, the rider must be reset, lower.  It may even be the case that the “rider’ becomes negative, meaning that health insurance with abortion coverage costs less than health insurance without.  That would happen if indeed the birth rate to minors – when projected to reflect all accidental births in the covered population – falls by enough to offset the costs of abortion coverage. 

 

Therefore, the recommendation to those who support both health reform and choice is to join your adversaries, and respect both your adversaries’ belief systems as well as the immutability of math, and not let a first-year rider of $1 for abortion coverage – with a possible reduction in future years even to $0 or below – influence your vote on health reform.  Instead, simply insist that the Stupak Amendment rider be calculated in an actuarially sound manner – meaning that the rider pricing captures any change in the birth rate caused by access to abortion — in all years, including the possibility that the pool with the rider could have a lower premium than the pool without.

 

It is not pretty to think about abortion mathematically, but ultimately health reform is about insurance, insurance is based on arithmetic, and this would be the way the arithmetic works out.  Math is not, and — despite all the politics in Congress — will never be, a popularity contest.

 

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One Response to “Stupak “Rider” Should Be Actuarially Sound”

  1. Roger P Says:

    Al

    I have to admit I had not thought about the abortion issue as a rider. This makes absolute sense. Well done.

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