On Tuesday, the Supreme Court heard oral arguments in a pair of cases challenging Obamacare’s rule requiring most employers to offer contraceptive coverage in their employee health insurance plans. While these cases have contraception and women’s rights at their center, they also raise significant issues about corporate influence and changes in our health care system.
Just to review how we got here: Part of President Obama’s 2010 health care reform law requires employers to offer their employees health care that covers contraceptives. The law exempts religious institutions – like churches and synagogues – from this mandate, and accommodates religious non-profits – like universities and hospitals – by letting insurers offer separate contraception coverage directly to their employees. It does not, however, offer any exemption for religious for-profit organizations. The mandate then breaks down like this:
|Class of Employer||Contraception rule under ACA:|
|Religious institutions (churches, synagogues, etc.)||Not required to provide|
|Religious non-profits (universities, hospitals, etc.)||Not required to provide, but direct provision from insurer to employee|
|Religious for-profits (Hobby Lobby, other businesses w/ observant ownership)||Required to provide|
Enter Hobby Lobby and Conestoga Wood, the two companies challenging the contraception rule before the Supreme Court. These companies are not exempt from providing contraceptive coverage to their employees, but they maintain that doing so violates their owners’ closely held religious beliefs. They rely on a 1993 law called the Religious Freedom Restoration Act (or “RFRA”), which forbids the government from substantially burdening a person’s religious beliefs unless it has a compelling reason for doing so.
Therefore, these cases hinge on: (1) whether corporations like Hobby Lobby and Conestoga Wood are “persons” that can assert protected religious beliefs under RFRA; (2) whether the contraception mandate is a substantial burden on the companies’ religious beliefs; and if so, (3) whether the government has a compelling interest in promoting contraceptive coverage, and whether imposing a mandate on employers is the least-intrusive way of promoting this interest.
The core legal arguments over religious freedom and contraceptive rights have been thoroughly dissected elsewhere, so I’d like to focus on other issues underlying these cases: namely, the power of business interests, and the structure of our post-Obamacare health care system.
Corporate Power & Health Care Autonomy
Much of what animates our arguments about these cases is disagreement over how much power corporations ought to have. Mandate opponents draw on the legal doctrine that treats corporations as if they are individual persons to argue that corporations can exercise religious and conscience rights. Corporate personhood doctrine has generally distinguished between the corporation and its owners, and has not (yet) recognized corporate religious beliefs, so the mandate opponents seek to doubly extend rights for businesses.
Mandate supporters resist this notion of corporate rights and freedoms. Many are sensitive to the expansion of corporate rights in the wake of the Supreme Court’s decision in Citizens United, which validated free speech rights for corporations engaged in political spending. To some, the idea that corporations can exercise rights just like natural persons upends the traditional understanding of the corporate form as a neutral vehicle through which employees and employers contract to conduct business. These rights, moreover, come at the expense of corporations having obligations in society by allowing them to opt out of generally applicable legal duties.
Businesses are not wrong to argue that the Supreme Court opened the door for these cases when it reaffirmed corporate speech rights in Citizens United. However, workers are understandably fearful of the outgrowth of corporate power. In an environment of stark economic inequality, where 1% of earners holds over 40% of the country’s wealth, and a marginalized labor movement, employees understandably feel dominated by business interests. Leaving workers at the mercy of ownership’s moral and spiritual beliefs would add one more dimension to this domination.
Decoupling Jobs from Insurance
Are workers right to fear that corporate rights come at the expense of their health care autonomy? Supporters of the contraception mandate argue that employer conscience-based decisions will infringe on their freedom to direct their own health outcomes and lend protection to discriminatory practices by employers. Such a fear is understandable given how long our health care system has been dependent on employer-provided insurance. Employers occupy a quasi-governmental role as health insurance providers of first resort. If corporations have discretion in how they provide health insurance, then workers’ health freedom is implicated.
The companies opposing the mandate, however, argue that there are other ways for their employees to obtain contraceptive insurance. One obvious way is through the centerpiece of Obamacare: the state and federal health insurance marketplaces.
This tension – over whether corporate religious choices impede employees’ freedom of health – is a product of the unique state of our health care system. Obamacare represents the first significant nudge away from employer-sponsored insurance. The law’s tax credits and marketplaces have breathed life into inoperative individual health insurance markets, meaning employer-sponsored insurance is not “do or die” anymore. Even Obamacare’s (twice delayed) employer mandate arguably replaces a traditional norm of obligation for employers to provide health insurance with a new ethic where employers can buy out this obligation by paying a fee.
Complete decoupling – as severing the link between our jobs and our health insurance is called – is widely considered to be a great thing, supported by economists and policymakers on both the left and the right. It would create a more dynamic workforce by freeing people to leave jobs without the fear of losing their health insurance. It would also reduce administrative costs from employers, liberated from having to manage costly and time-consuming health plans.
This transformation away from employer-sponsored insurance, however, is new and uncertain, along with being highly incomplete. Because a functioning individual health insurance market is a new phenomenon for most of us, many aren’t yet comfortable completely trusting it; it’s fundamentally different from the employer-based health insurance system they’ve always known. Despite forecasts to the contrary, this shift is also far from complete. Our health insurance system still favors employer-sponsored insurance, most notably by excluding health insurance benefits from taxation. For many, the value of this tax exclusion exceeds the value of Obamacare’s health exchange subsidies, which are means-tested based on an individual’s income. So on net, our system certainly still favors employer-based health insurance.
All of which is to say that the anxiety felt by contraception advocates is real and defensible, flowing from reliance on our traditional employer-based insurance system. But the long-term solution presented by mandate opponents – obtaining health coverage outside the employer’s auspices – is both realistic and desirable. Realistic because the seeds have been planted by Obamacare, and desirable because it would relieve employers of not just contraceptive coverage decisions, but all health care decisions. This, of course, would (mercifully) render our arguments about contraception and employers’ religious beliefs moot.
The specter of employers empowered to pick and choose which medical treatments comport with their moral code haunts many concerned observers of Hobby Lobby. We can truly solve this problem by reorganizing our health insurance system around something besides our jobs – whether that’s government-provided health insurance, competitive individual marketplaces, or something in between.