An earlier comment suggested that the lack of data has forced insurers to assume women who wanted abortions would have them with or without insurance. I have not seen any smoking gun evidence on this issue, but I have seen that the abortion rate for poor women who have unintended pregnancies is far lower than for more affluent women, 42% versus 54%. Could part of that difference be the absence of insurance?

The same comment raised the issue of anti-selection. Put a 12 month waiting period on the benefit. No woman would plan to become pregnant just so she could have an abortion. When measured in 1994 and 2001, 5.1% of women of child-bearing age had unintended pregnancies. According to polls I’ve reviewed, somewhere between 55% and 75% of women would at least consider ending an unintended pregnancy with abortion. That’s a large potential market for what looks like a material insurable risk.

Putting those three issues aside, from a purely actuarial perspective, charging zero would be better than giving rate credits. Giving it away would probably be enough incentive to persuade women who might consider abortion to take the rider. That would eliminate the financial obstacles for women who would consider abortion without handing out rate credits to women who would not.

Let’s assume that approach would not fly because:
• the state laws on which the Nelson amendment was based explicitly prohibit coverage of elective abortions without additional premium, and
• insurance company systems may have edits that preclude “add zero” that would restrict them to making abortion a covered charge. (I hope I’m kidding about this one, but with insurance company systems, you can never be sure.)

Let’s also assume rate credits would not fly because even a U.S. Senator knows that negative numbers mean subtraction, not addition.

Are there other possibilities that could appeal to an insurer’s profit-making instincts while complying with the law?

Certainly charging 1¢ PMPM would comply with the letter of the law, but that one is far too obvious.

How about charging $10.00 PMPM for a rider that would cover the cost of elective abortions and pay a $1000 “bonus” to any woman who actually had one? That approach would actually be as financially advantageous as the 1¢ PMPM option if 37% of women not opposed to abortion bought the rider and the incentive increased the percent of those women who chose abortions to end unintended pregnancies from 64% to 67%.

Let the games begin!