Friday, July 11, 2008

McCain is right about Viagara and Birth Control (Even if He Doesn't Know Why)

The lefty blogosphere has been trying to give McCain a tough time about voting against mandating that health plans that include Viagara must include birth control as well. One can't expect them to understand economics, but even if you don't, surely both products are equally valuable to both parties in a heterosexual couple? I suspect some age bias.

Here is what I said at Ta-Nehisi Coates' (very good) blog:

I sort of doubt that birth control vs. Viagara is a man vs. woman issue. It's more of a generational issue. Heterosexual women with older partners benefit from Viagara as much as heterosexual men with younger partners benefit from birth control.

The legitimate argument for McCain's stance is the following. We want birth control (and Viagara)to be as cheap as possible. Mandating that birth control be part of a health insurance plan doesn't (necessarily) make it cheaper. You now have to add the costs of administering the insurance claims to the manufacturer's costs and profit.

Liberals tend to think, "Ah, but if it is insured, the employer pays for it instead of the employee." That's actually wrong. Benefits are just part of your overall compensation. If the costs of drug plans go up, then (all other things being equal), your take-home pay is going to be less. So you pay, one way or the other.

I suppose birth control could be part of a publicly-funded universal drug benefit. It isn't in Canada or anywhere else that I'm aware of, so I don't think this is reasonable.

But what about Viagara? Why should it be insured? I would object to a mandate there too, but it's at least possible that there is an overall gain to insuring it. Erectile dysfunction is a risk that only happens to some people (although it is pretty common at a certain age). So maybe employees as a group are better off spreading this risk across the group, even if it means higher unit costs.

Anyway, neither Viagara nor birth control should be mandated, since that just means paying more for sex.

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