Stupak Amendment Economics

Normally, I would refrain from weighing in on the landmine-strewn issue of abortion. But an NPR Morning Edition story today made me think of some economics of insurance coverage for abortions. It appears that swing votes on health care reform in the Senate will hinge on the Stupak amendment determining how restrictive the federal government will be in allowing insurance payments for abortions. The quote that piqued my interest was:

"Democrats who support abortion rights said the Stupak language would put such a regulatory burden on private insurers that cover abortion that they would stop. And for the first time, private citizens would be blocked from obtaining a legal medical procedure."

Not covered by insurance is not the same as being blocked. This begs the question of the efficiency of insuring abortions, or live deliveries by-the-way, at all. Because we know what causes it, pregnancy is an almost completely preventable condition where insurance could induce moral hazard. That is, if the average family has 2.2 children and the average delivery costs $5,000, then the family could pay the $12,000 in higher insurance premiums or at the "point-of-purchase." Insuring deliveries may induce more of them (though I doubt this is a big effect) or more expensive deliveries (whither the mid-wife?).

There is a claim, with little evidence that I know of, that many young couples substitute abortion for contraception. That is, couples are less willing to use contraception because they know that abortion is available. This too would be moral hazard. While access to cheap and safe abortions likely reduces unwanted births, it is also plausible that it increases unwanted pregnancies, the difference representing more terminations. If so, blocking insurance coverage for abortion would raise its marginal cost, leading more couples to use the contraception substitute. As a consequence, I would expect to see an increase in contraception and a decrease in unwanted pregnancies, but a likely increase in unwanted births as the substitution would not be perfect. The magnitudes of these effects could possibly be estimated if the Stupak amendment passes.

I have tried to stay morally neutral in this analysis. A moral calculus of the Stupack amendment, it seems to me, would then place weights on the social benefits of fewer pregnancy terminations versus the social costs of more unwanted births. The magnitudes of these benefits and costs are largely outside of the realm of economics.