[Senate Hearing 107-391]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-391
 
 IMPROVING WOMEN'S HEALTH: WHY CONTRACEPTIVE INSURANCE COVERAGE MATTERS

=======================================================================

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                                 S. 104

 TO REQUIRE EQUITABLE COVERAGE OF PRESCRIPTION CONTRACEPTIVE DRUGS AND 
         DEVICES, AND CONTRACEPTIVE SERVICES UNDER HEALTH PLANS

                               __________

                           SEPTEMBER 10, 2001
                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions












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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

               EDWARD M. KENNEDY, Massachusetts, Chairman

CHRISTOPHER J. DODD, Connecticut     JUDD GREGG, New Hampshire
TOM HARKIN, Iowa                     BILL FRIST, Tennessee
BARBARA A. MIKULSKI, Maryland        MICHAEL B. ENZI, Wyoming
JAMES M. JEFFORDS (I), Vermont       TIM HUTCHINSON, Arkansas
JEFF BINGAMAN, New Mexico            JOHN W. WARNER, Virginia
PAUL D. WELLSTONE, Minnesota         CHRISTOPHER S. BOND, Missouri
PATTY MURRAY, Washington             PAT ROBERTS, Kansas
JACK REED, Rhode Island              SUSAN M. COLLINS, Maine
JOHN EDWARDS, North Carolina         JEFF SESSIONS, Alabama
HILLARY RODHAM CLINTON, New York     MIKE DeWINE, Ohio

           J. Michael Myers, Staff Director and Chief Counsel

             Townsend Lange McNitt, Minority Staff Director

                                  (ii)

  



















                            C O N T E N T S

                               __________

                               STATEMENTS

                       Monday, September 10, 2001

                                                                   Page
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................     1
Kennedy, Hon. Edward M., a U.S. Senator from the State of 
  Massachusetts..................................................     5
Snowe, Hon. Olympia, a U.S. Senator from the State of Maine; and 
  Hon. Harry Reid, a U.S. Senator from the State of Nevada.......     6
Erickson, Jennifer, Pharmacist, Bartell Drug Co., Bellevue, WA; 
  Anita L. Nelson, M.D., Chief of Women's Health Care Programs, 
  Harbor-UCLA Medical Center, Torrance, CA, on behalf of the 
  American College of Obstetricians and Gynecologists; Kate 
  Sullivan, Director, Health Care Policy, U.S. Chamber of 
  Commerce, Washington, DC; and Marcia D. Greenberger, Co-
  President, National Women's Law Center, Washington, DC.........    14

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Congresswomen Lowey..........................................    35
    Senator Snowe................................................    36
    Senator Reid.................................................    37
    Jennifer Erickson............................................    38
    Anita L. Nelson, M.D.........................................    39
    Kate Sullivan................................................    42
    Marcia D. Greenberger........................................    45
    Wendy Wright.................................................    49
    Elizabeth Cavendish..........................................    51
    Letter to Committee on Health, Education, Labor, and Pensions 
      from Julie Brown, dated September 12, 2001.................    54

                                 (iii)

  














 IMPROVING WOMEN'S HEALTH: WHY CONTRACEPTIVE INSURANCE COVERAGE MATTERS

                              ----------                              


                       MONDAY, SEPTEMBER 10, 2001

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 3 p.m., in room 
SD-430, Dirksen Senate Office Building, Senator Mikulski, 
presiding.
    Present: Senators Mikulski, Kennedy and Murray.

                 Opening Statement of Senator Mikulski

    Senator Mikulski [presiding]. Good afternoon, everybody. 
The Senate Committee on Health, Education, Labor, and Pensions 
is holding a hearing today called ``Improving Women's Health: 
Why Contraceptive Insurance Coverage Matters.'' We will be 
really listening to the views of those who are interested in 
legislation called EPICC, which is Equity in Prescription 
Insurances and Contraceptive Coverages. The chairman of the 
full committee, Senator Kennedy, has asked me to chair the 
meeting, and we are very happy to have him, and other Senators 
will be joining us as they arrive back in Washington.
    I am going to give an opening statement, and then Senator 
Kennedy, and then we are going to return to our original 
sponsors, Senator Harry Reid and our colleague, Senator Olympia 
Snowe. Before we begin, I have statements from Senators Gregg 
and Collins and I would like to ask unanimous consent that the 
testimony of Congresswoman Nita Lowey be entered into the 
record, as she is the lead sponsor in the House. Without 
objection, that is so ordered.
    [The prepared statements of Senators Gregg and Collins 
follow:]

                  Prepared Statement of Senator Gregg

    Thank you Madam Chairwoman for holding this hearing on 
contraceptive coverage. Contraception is obviously an important 
concern for millions of women of child-bearing age and their 
families. In addition to the critical role contraception plays 
in reducing unintended pregnancies, there is also evidence to 
show it correlates with improved maternal and infant health 
outcomes. While not every worker wants or needs access to 
contraceptive benefits, I agree with making it available to 
those who want it, so long as faith-based plans, employers, and 
providers are not required to provide services that conflict 
with their religious doctrine. This should be the issue before 
the Committee.
    Unfortunately, the legislation before this committee takes 
a different approach to the issue, an approach that I believe 
will undermine the intended effect of the legislation. EPICC--
the ``Equity in Prescription Insurance and Contraceptive 
Coverage Act'' (S. 104)--does not seek to make benefit options 
that include contraceptive coverage available for women who 
want it. Instead, S. 104 forces every health plan in America 
and every person enrolled in a private health plan to buy these 
benefits, whether they want them or not.
    Although S. 104 may be well-intentioned, any bill that 
mandates specific benefits that all consumers must buy directly 
raises health plan costs for employers and workers. The type of 
mandate in S. 104 limits an employer's ability to design 
benefits that meet the needs and preferences of their 
employees. Assertions that across-the-board congressional 
mandates are cost-effective in the private market because they 
may be other contexts, such as in the public sector or in the 
Federal Employees Health Benefits Program, are flawed. The 
private employment-based market bears very little resemblance 
to Medicaid, or even the choice model established by the FEHBP. 
Indeed, the cost of the mandate for FEHBP was minimal because 
nearly every plan was already covering most contraceptive 
benefits when the mandate was implemented. Workers, and women 
in particular, will pay the ultimate price of the mandate in 
this legislation.
    Benefit mandates cost money and must be considered in the 
context of other cost drivers. Employment-based health care 
costs have been increasing for several years and this year will 
experience their highest rate increase in nearly a decade. 
According to new survey data from the Kaiser Family Foundation, 
small employers are dropping coverage at an alarming rate. The 
cost of S. 104 will be in addition to premium inflation and a 
range of other expensive mandates and regulations that are 
pending, including the patient's bill of rights, mental health 
parity, medical privacy regulations and administrative 
simplification.
    I am deeply concerned about our appetite for benefit 
mandates. Resources for health care not unlimited, and I 
believe it is inappropriate for the legislative branch to tell 
consumers what benefits and services they must buy when many 
people either do not have insurance or at risk of losing their 
insurance. There is a strong link between increased insurance 
premiums and the rate of uninsured, particularly when the 
economy is weak. As it is, women are more likely to be 
uninsured today. It simply does not make sense to pay for 
increased contraceptive benefits for a few, at the expense of 
other women who will lose their coverage entirely or find that 
they are not adequately insured against a major medical event.
    I believe we can, and must, find a better way to give 
workers and other consumers options that meet their needs and 
preferences without driving up health care costs and the number 
of uninsured. For instance, the patient's bill of rights might 
offer a better approach. That legislation requires most 
employers to offer a point of service option so that employees 
have the ability to use providers and facilities outside the 
network. Thus, if a patient wants to obtain all health care 
services from the Mayo Clinic, he or she can pay the additional 
premium for that option. But other employees who don't want 
that option, or can't afford it, can select a lower cost 
option. While this type of requirement still costs money, it is 
preferable to the inflexible mandate in S. 104.
    In addition to its impact on cost and access, S. 104 as 
drafted raises other types of concerns. Of particular concern 
is the fact that, unlike the FEHBP mandate, S. 104 does not 
contain a conscience clause. FEBHP specifically exempts plans 
and providers that express religious objections. Under S. 104, 
faith-based employers and health plans would be forced to 
provide services that conflict with their religious and moral 
teachings. In addition, S. 104 would also preempt state 
insurance law and state parental notification laws.
    S. 104 also raises quality concerns because it does not 
permit a health plan to deny coverage or
    require prior authorization for a contraceptive drug or 
device for quality reasons. Thus, if a health professional 
mistakenly prescribes a drug that could be harmful to a 
patient, the plan cannot intervene. By prohibiting a plan from 
intervening for quality purposes, S. 104 exposes employers and 
plans to malpractice liability, the mere threat of which can 
raise insurance premiums.
    S. 104 also goes far beyond other benefit mandate proposals 
by imposing rigid cost-sharing and plan design rules. By 
linking contraceptive coverage cost-sharing to cost-sharing for 
``any other drug or outpatient service'' it does not appear 
that employers would be able to have different plan options 
with in-network benefit differentials. In essence, employers 
would be required apparently to cover contraceptive benefits at 
the most generous cost sharing level across all options. For 
example, if an employer plan offers 100% coverage for 
immunizations, it would have to offer the same level of 
coverage for contraceptive benefits.
    Based on the serious nature of the access, quality, cost, 
and moral issues I have outlined, I will oppose S. 104 in its 
current form. I would hope that the sponsors of the bill would 
be willing to address these concerns and seek to find a better 
approach to expanding access to contraceptive services.

                 Prepared Statement of Senator Collins

    Madam Chairman, thank you for calling this hearing this 
afternoon to examine the issue of contraceptive coverage and 
whether or not we should require insurers who routinely cover 
prescription drugs and medical devices to also cover 
contraceptive care. I am particularly pleased to welcome my 
colleague, the senior Senator from Maine, Senator Snowe, as 
well as Senator Reid, both of whom have been such leaders in 
the Senate on this and other issues important to women's 
health.
    Most American women do use contraception to avoid 
unintended pregnancy. While women clearly view contraception as 
basic to their health and to their lives, health insurers in 
the United States traditionally have not. While health plans 
routinely cover other prescriptions and outpatient medical 
services, contraceptive coverage is meager or nonexistent in 
many health insurance policies. According to a 1994 study by 
the Alan Guttmacher Institute, while virtually all fee-for-
service plans covered prescription drugs, half of these plans 
fail to cover any prescription contraceptive method. While 97 
percent cover prescription drugs, only 33 percent cover the 
pill.
    This gap in health care coverage has major health 
implications for American women. Contraceptives have a proven 
track record of preventing unintended pregnancy, and 
contraception is basic health care for most women throughout 
much of their lives. Prescription contraceptives, however, can 
be expensive and many women may use a less effective method or 
forgo using contraception at all because of the cost. This 
places these women at increased risk of unintended pregnancy 
and abortion.
    The Equity in Prescription Insurance and Contraceptive 
Coverage Act corrects this inequity, and I am please to be a 
cosponsor. While some may be concerned that this is a mandate, 
it really is an equity issue. It does not require health plans 
to cover prescription drugs--it just prohibits them from 
carving out contraceptive care. Currently, contraceptive drugs 
and devices are the only class of services that are not 
routinely covered by health plans that provide prescription 
coverage.
    Again, Madam Chairman, thank you for calling this hearing 
to explore this issue further.
    [The prepared statement of Ms. Lowey may be found in 
additional material.]
    Senator Mikulski. Well, I would like to thank everybody for 
coming to this important hearing on contraceptive coverage, and 
of course welcome our colleagues and others who are interested. 
To Senator Reid and Snowe, we want to commend both of you for 
your strong bipartisan leadership on contraceptive coverage for 
women. Senators Snowe and Reid have sponsored legislation 
called the Equity in Prescription Insurance and Contraceptive 
Coverage Act of 2001. This legislation requires health plans 
that cover prescription drugs to provide the same level of 
coverage for prescription contraceptives.
    I am a proud co-sponsor of this bill, and the purpose of 
the hearing today is to shine a spotlight on the issues related 
to contraceptive coverage, why it is important to women, why it 
is important to families, and how we can ensure that women have 
access to the health care they need. Women already pay a gender 
tax. We pay a gender tax when it comes to getting less pay for 
comparable work or getting lower Social Security benefits 
because of the time we take out of the workforce to raise 
families, and now women face the added gender tax of high 
health costs. For every dollar spent on men's health care, 
women during their child-bearing years spend $1.68. Now, why? 
Because some insurance plans do not cover birth control pills 
or other forms of prescribed contraception.
    Therefore, most women pay considerable out-of-pocket 
expenses. The legislation we are talking about today will 
address this inequity. Since my first days in Congress, I have 
been trying to lead the charge to make sure we address women's 
health, whether it was to establish the Office of Women's 
Health at NIH, to ensure that women are included in the 
protocols, something then-Congresswoman Snowe and I worked on, 
with the help of the great guys in the Senate like Senators 
Kennedy and Reid. We ensured that older women have access to 
important cancer screenings like mammograms and pap smears to 
make sure that women's health needs are a priority for our 
Nation.
    Contraception is a basic part of health care for women. 
Family planning actually improves the health of both mother and 
child. Unwanted pregnancies are associated with lower birth 
weights and can jeopardize maternal health. The American 
College of OB/GYNs has said contraception is a medical 
necessity for women during three decades of their lives. We 
cannot stand by and let insurance plans deny access to this 
medical necessity any longer.
    Some strides had been made, and I know we are going to hear 
from Jennifer Erickson today, who will tell us why she became 
an advocate for contraceptive equity and even took her employer 
to court for refusal to cover contraceptives. I am proud that 
my own State of Maryland has been a leader on prescription 
equity. It was the first State in the Nation to require 
insurers that if you cover prescription drugs, you also have to 
cover FDA-approved prescription contraceptives. Women in every 
State should have access to this basic health care tool. It 
helps create parity between the benefits offered to men and the 
benefits offered to women.
    Mr. Chairman, prescription contraceptives should be 
available to all women. It is time to end this sex 
discrimination in insurance coverage, and let's at least reduce 
the gender tax. We look forward to hearing the witnesses, and 
now I turn to my colleague and chairman of the committee, 
Senator Kennedy, for any statement he wishes to make.

                  Opening Statement of Senator Kennedy

    The Chairman. Well, just very briefly, Madam Chairman, I 
want to thank you for all of your strong leadership on this 
issue, as well as women's health issues, and thank Senator 
Snowe, as well, for all that she has done on this issue. 
Senator Reid has been a real leader in this particular area and 
in so many other areas, as well, in terms of health issues. 
Thank you for having this hearing.
    I think we will hear today the compelling case for action, 
and I just want to give you the assurance that I think many of 
us are looking forward to this hearing because we will have the 
latest in terms of information as to what is happening out on 
the crossroads of our country, but I think this is obviously 
something that all of us are very hopeful that we will move 
right to the Senate floor and have an opportunity to get action 
on this year. This is something that is timely and important. I 
know that is your priority. I know it is, Senator Snowe, as 
well as Senator Reid, because they have spoken about this on 
many occasions.
    So I thank all of you for all the good work that you have 
done. Just to mention again, contraceptive insurance coverage 
is essential for women's health. We should have passed the 
legislation long ago to deal with this pressing issue. The 
pending bill is a responsible solution to a problem facing 
millions of American women, and I thank all of you for your 
leadership. Family planning improves women's health and reduces 
the number of unintended pregnancies and abortions. Access to 
prescription contraceptives is a vital part of such planning. 
Women have the right to decide when to begin their families and 
how to space their children. Access to such coverage is also 
essential in reducing infant mortality and the spread of 
sexually-transmitted diseases.
    In spite of these benefits to women and their families, 
only half of all the health plans today cover prescription 
contraceptives, which may well be the only prescription a woman 
needs. Without the help of insurance coverage, many women are 
unable to meet this basic health need, or may decide to choose 
a less-expensive, less-effective method. Largely as a result of 
the lack of this coverage, women on average pay 68 percent more 
than men for health care. This bill is urgently needed to 
increase the number and variety of contraceptive methods 
available to all women.
    More than three-quarters of Americans support this 
coverage. According to a study in 1998, 78 percent of Americans 
support requiring health plans to include coverage for 
contraceptives even if it means increasing their out-of-pocket 
expenses by more than five dollars, which is much more than the 
actual cost of the coverage. The cost to employers of including 
this coverage in their health plans should not be an issue. In 
fact, the Washington Business Group on Health estimates that 
not providing the coverage would cost an employer 15 to 17 
percent more than providing the coverage.
    Many States have successfully begun to require this 
coverage in their basic health bills. The Equal Employment 
Opportunity Commission has ruled that employers who do not 
include such coverage in their health plans, while covering 
other prescriptions, are in violation of Title 7. Recently, a 
Federal court agreed on this point, as our panelists will 
discuss. But Federal legislation is clearly needed to see that 
all women throughout the Nation have fair access to the family 
planning services they need. I commend our witnesses who are 
here today and look forward to the testimony and to this bill 
becoming law this year.
    I thank the chair.
    Senator Mikulski. Well, thank you very much, Mr. Chairman, 
and really your leadership has been important. I know when we 
were working on including women in clinical trials, had it not 
been for your leadership, working with then myself and the 
women of the House, women would not have been included in that. 
We would have never had that Office of Women's Health at NIH, 
and I do not think Bernadine Healy would have ever been head of 
NIH. It is time now to break even additional ground.
    Having said that, I would like to be able to turn to 
Senator Olympia Snowe, who has been really a very strong 
advocate of comprehensive women's agenda, and has been a 
leader, working with our colleague, Senator Harry Reid, on this 
prescription contraceptive coverage. Senator Snowe, we really 
welcome you.

STATEMENTS OF HON. OLYMPIA SNOWE, A U.S. SENATOR FROM THE STATE 
OF MAINE; AND HON. HARRY REID, A U.S. SENATOR FROM THE STATE OF 
                             NEVADA

    Senator Snowe. Thank you, Madam Chair, and it is certainly 
a pleasure to be here today and before you. You certainly have 
been a longtime leader of women's health issues and it has been 
a privilege to work with you over the last 20 years on so many 
pieces of groundbreaking legislation, as you indicated, in 
creating the Office of Women's Health.
    Senator Kennedy, I thank you as chair of this committee for 
setting aside time to address this most important issue, and 
more significantly to highlight the continuing inequity in 
prescription drug coverage that excludes the coverage for 
prescription contraceptives. I introduced this legislation with 
Senator Reid back in 1997, and we now have 42 co-sponsors on 
this legislation once again. I consider it my good fortune to 
have been joined in this effort, to have as my partner in 
advancing this legislation, Senator Reid, who has done so much 
to advocate on behalf of this legislation and the need to 
address this discriminatory problem within coverage of 
prescription drugs and overall health insurance policies.
    We have agreed that this is a common-sense public policy 
whose time has long since come. It really does get down to a 
matter of basic fairness, fairness to half of the Nation's 
population, fairness in how we treat and view women's 
reproductive health care versus every other health care need 
that is addressed through prescription drug coverage. Make no 
mistake about it, the lack of coverage for prescription 
contraceptives in our health insurance policy has a very really 
impact on the lives of women in America, and certainly on our 
society as a whole. This is not an overstatement. It is a basic 
fact and it is basic reality.
    Frankly, it confounds logic as to why the Congress has been 
reluctant, reticent, resistant to the idea of passing this 
legislation so that we can have a national law, a national 
standard by which women could be assured that they are going to 
receive this coverage. It has been four long years since we 
introduced this legislation, and according to the Alan 
Guttmacher Institute, in each of those 4 years, women have been 
paid $350 for prescription oral contraceptives. That is a total 
of $1,500. Why? Because health insurance plans exclude 
prescription contraceptives when they when they provide 
coverage for other prescription benefits. How can we continue 
to deny this fundamental coverage that is so critical, so key 
to women's reproductive health?
    All we are saying in this legislation is that if health 
insurance plans provide coverage for prescription drugs, that 
that coverage has to extend to FDA-approved prescription 
contraceptives. It is that simple. It is a matter, as I said 
earlier, of basic fairness that really underscores law and 
jurisprudence. We only have to look at the case that was issued 
by the U.S. District Court in the Western District of the State 
of Washington back in June. I guess it should come as no 
surprise to us that a court should issue a ruling, buy it was a 
very significant ruling in the case of Jennifer Erickson versus 
Bartell Drug Company, in which they indicated that employer's 
failure to include prescription contraceptives in an otherwise 
comprehensive prescription drug benefit program constituted 
gender discrimination under Title 7 of the Civil Rights Act.
    We are very fortunate to have with us here today--and I am 
delighted that you were able to get Jennifer Erickson, who is 
the plaintiff in this case, to testify here today, so that we 
can hear firsthand from her of her willingness to wage this 
lawsuit, and I am thankful and we are all grateful to Jennifer 
Erickson for her willingness to do that, for her fortitude, her 
perseverance, her persistence, and her courage in doing so, 
because this is the first case of its kind that establishes a 
legal precedent for the legality of our position and really 
does speak to the reasons as to why we need to have national 
legislation.
    We also know the EEOC issued rulings preceding this court 
decision that really underscored the same premise, that 
employers were violating gender discrimination laws under Title 
7 of the Civil Rights Act if they did not include prescription 
contraceptives when otherwise their health insurance plans 
included prevention devices, prescription drugs, or other 
preventive health services.
    So we have, in these two decisions, a one-two punch 
approach that favors the legislation and the approach that we 
have embraced in that legislation, as well. So have 16 States, 
as you indicated, Madam Chair, in your own State of Maryland, 
same is true of my State of Maine. There are 16 states who have 
already passed this legislation, 20 other States are 
considering similar legislation. But the fact of the matter is 
women should not be held hostage by virtue of where they live, 
to geography, but that is exactly what would happen if we just 
relied on the States enacting this legislation. But 
furthermore, that legislation can only address State-regulated 
plans. So it cannot reach all the Federal plans, ERISA plans, 
for example, or other group plans. So it is very, very 
important that we have national standard.
    It is not only a matter of fairness. It is a matter of what 
we must consider the primary objective of this legislation, and 
that is to reduce unintended pregnancies. Frankly, that is why 
Senator Reid and I came together, to bridge the chasm between 
pro-life and pro-choice positions on this very significant 
challenge in our society today. There are three million 
unintended pregnancies in America, over half of which result in 
abortions. What better way than to prevent these unintended 
pregnancies than through this legislation, giving access to 
women to the most effective means of birth control?
    So that is what it is all about, Madam Chair and Chairman 
Kennedy, in this legislation. There are numerous ramifications 
by omitting this kind of coverage in our health insurance 
policies. We know that, to be sure. When we talk about cost, 
talk about the cost of unintended pregnancies, the 
ramifications to a woman's health, to the children's health, to 
low birth weights and infant mortality, to mention a few, but 
very significant consequences as a result of unintended 
pregnancies. Women do not seek prenatal care in many of these 
instances of unintended pregnancy.
    So there are numerous consequences, and then you look at 
what health insurances provide for. They provide for surgical 
procedures such as sterilization, tubal ligation, vasectomies; 
and yet here in this instance, are providing the minimal 
support for coverage for the most effective means of birth 
control. It simply is not fair, and it is inequitable. Ask any 
woman in America, who would not say that reproductive health 
care is a vital component of overall health care. How do you 
divorce that issue from overall health care and issues that 
affect women's health?
    So those are the major reasons why we have introduced this 
legislation. The American people see the common-sense approach 
to this. That is why they overwhelmingly support requiring 
health insurance companies to provide this coverage, even if it 
were to increase the cost of their premiums from one to five 
dollars. There was a survey that was conducted a couple of 
years ago which indicated that 73 percent of American people 
would support that even if it increased premium cost, but we 
know that there will not be any cost. We have seen that with 
the extension of that coverage that we were able to provide to 
Federal employees in the 1998 Treasury-Postal appropriations. 
In fact, we heard that argument over and over and over again, 
``It is going to increase the cost of the premiums. It is going 
to increase the cost of that insurance.''
    Well, guess what? OPM issued a statement in January of this 
year that emphatically declared otherwise. It said there was no 
obstacles to extending this coverage to Federal employees; 
there were no net increases in the premium costs; there were no 
increased costs as result of this contraceptive coverage. So 
that is a plain fact, and we know that, because we know that if 
you have unintended pregnancies, there are greater costs. There 
are costs--the pregnancy-related medical costs that can range 
from $5,000 to $9,000, or a premature baby up to $500,000. So 
we know that ultimately this legislation is going to reduce 
costs, not only for the employer, but also for the insurers in 
America today.
    Finally, I might add, Madam Chair, there have been some 
questions about whether or not we should have a conscience 
clause, and we were able to draft an appropriate conscience 
clause in the legislation for Federal employees, and I know 
that we can do the same in this legislation, as well, to 
address any concerns for those with respect to being able to 
opt out because of religious beliefs. So, again, Madam Chair 
and Chairman Kennedy, I thank you for this opportunity to 
testify. I hope that we will be able to redress this wrong, so 
that we can work in what is in the best interest of women and 
children in America.
    Thank you.
    Senator Mikulski. Thank you very much, Senator Snowe.
    [The prepared statement of Senator Snowe may be found in 
additional material.]
    Senator Mikulski. Now we would like to turn to our 
colleague, Harry Reid, who has been a champion of women's 
health and their safety and security, both here and abroad. He 
has taken a leadership role in international family planning, 
and he has also been an outstanding international opponent 
against the trafficking of women, and in those grim-and-gore 
surgical procedures that are used against women, in terms of 
their fertility.
    So, Senator Reid, the women in the Senate just think you 
are one of the Gallahads, and we are very happy to hear from 
you today.
    The Chairman. We think so, too. [Laughter.]
    Senator Mikulski. We are so grateful for your advocacy, and 
we turn to you for your comments today.
    Senator Reid. Madam Chairman, thank you very much--Senator 
Kennedy.
    First of all, let me express to Senator Snowe what a 
pleasure it has been to work with her over these 4 years, and 
we have made progress. I appreciate very much being able to 
work with you, Olympia. Yesterday, all over America, hundreds 
of thousands of people watched people playing football, but if 
we look at panel number two here, these are the real heroes, 
people who really affect people's lives, different than 
somebody kicking a football or throwing a football. Jennifer 
Erickson, Anita Nelson, Kate Sullivan, Marcia Greenberger, I 
hope those within the sound of our voices, those that are 
viewing us, will understand that these are the real heroes. 
These are going to make a change. These people are attempting 
to make changes in people's lives that really mean something. I 
have said many, many times that if men suffered from the same 
illnesses as women, the medical research community would be 
much closer to eliminating diseases that strike women.
    Senator Mikulski, you remember when I came back and 
reported to you of a meeting I had in Las Vegas with three 
women who would rather have been anyplace in the world rather 
than meeting with me. I was all they had. They were there 
because they had a disease called interstitial cystitis, a 
disease that afflicts, at that time, 500,000 women--we think 
much more than that now. But they had no place else to turn 
because people told them it was all psychosomatic.
    Working with you, we were able to get money in an 
appropriation bill to start a protocol, and we have made great 
progress; 40 percent of the women who have this dread disease 
now get relief through a drug that has been developed. So there 
is no question in my mind that if we had legislatures in the 
past that had a fair sprinkling of women, we could have done 
much better in directing some of our resources toward illnesses 
like interstitial cystitis and many, many other diseases that 
afflict women. So thank you for working with me in that regard.
    I believe the issue before us today is similar. If men had 
to pay for contraceptives, I believe the insurance industry 
would cover them. It was hardly surprising that less than 2 
months after Viagra went on the market, it was covered by many, 
many insurance plans. Birth control pills, which have been of 
the market since 1960, are covered by less than one-third of 
these insurance companies. The health care industry has done a 
poor job of responding to women's health needs. According to a 
study by the Guttmacher Institute, 49 percent of all large 
group health care plans do not routinely cover any 
contraceptive method at all, and only 15 percent cover all five 
of the most common contraceptive methods. But these same 
insurance companies routinely cover more expensive services, 
including sterilizations, tubal ligations, and abortions.
    Apparently, insurers do not know what women and their 
doctors have long known, that contraceptives, as has been 
indicated by both Senators that are presiding over this meeting 
today, Senator Snowe--have already said that contraceptives are 
a crucial part of a woman' health care plans. By helping women 
plan and space their pregnancies, contraceptive use fosters 
healthy pregnancy and healthy birth by reducing the incidence 
of maternal complications, low birth weight and infant 
mortality.
    Madam President, sadly--I should say Madam Chair--financial 
constraints force many women to forego birth control at all. I 
was on a talk show shortly after Senator Snowe and I introduced 
this, and frankly I was being abused pretty much on the radio 
show about this legislation I introduced: ``Why are you doing 
this? Leave people to their own choices. Leave people alone.'' 
A woman called in. She was from Texas and she said, ``Senator, 
thank you for doing this.'' She said, ``I'm pregnant now with 
my third baby. I did not want to get pregnant.'' She said, ``I 
have diabetes, and I have real concern about my health and that 
of my baby-to-be.'' She said, ``Why am I pregnant? Because I 
could not afford to get the contraceptives at work. My 
husband's insurance does not cover this. We are living hand-to-
mouth.''
    Well, this is only one example, one real example. What we 
are talking about here does not deal only with statistics. It 
deals with real people with real problems. Financial 
constraints force many women to forego birth control 
altogether, leading to 3.6 million unintended pregnancies every 
year. Senator Snowe has covered very ably that we need to do 
something about this. We introduced this legislation. All we 
are asking is equitable treatment. We do not want special 
treatment. We want fair treatment. Senator Snowe and I first 
introduced this many years ago, as I have indicated. We have 
made some progress, as we have already talked about.
    Along with Ms. Lowey, whose testimony you have already 
indicated is going to be part of this record, we have a 
provision that requires health care plans who participate in 
the Federal Employees Health Benefits Program, the largest 
employer-sponsored health plan in the world, to cover FDA-
approved prescription contraceptives. The Office of Personnel 
Management, which administers the program, reported in January, 
as has already been indicated, this benefit did not raise 
premiums, since there is no cost increase due to contraceptive 
coverage. I am sorry to report, Madam Chair, in spite of this, 
this administration has proposed eliminating this benefit in 
this budget. This past June, United States District Judge 
Robert Lasznick handed down a landmark decision, and as Senator 
Snowe indicated, we are so happy to have Jennifer Erickson 
here. I was fortunate to be able to meet her.
    I can remember the day that I got up and read about this 
decision. It was much more exciting--using the athletic 
contest--than any ball game that had occurred in the recent 
past. This kept our legislation alive, and I was so happy for 
her going her own way to work on this. Her case builds on 
momentum from a second ruling this past December by the Equal 
Employment Opportunity Commission that Senator Snowe has also 
mentioned.
    In that case, EEOC ruled that denial of coverage for female 
contraceptives, if an employer offers other preventive medicine 
or services, is sex discrimination under the Civil Rights Act. 
That is the way it should be. In spite of these important 
advances, women will not have the contraceptive insurance 
coverage they deserve until Congress passes this legislation. 
16 million Americans obtain health insurance from private 
insurance, rather than employer-provided plans. Only the 
enactment of this legislation will ensure that contraceptive 
coverage is offered by insurance providers. Women who receive 
their health care through work should not have to take their 
employers to court. We want to make family planning more 
accessible. We do not want an explosion in lawsuits. We want 
fairness.
    Equity in prescription contraceptive coverage is long 
overdue. We have lots of sponsors, as Olympia has noted, on 
both sides of the aisle. Senator Snowe and I are committed to 
moving this legislation. We are looking for the right vehicle. 
Promoting equity and health insurance coverage for American 
women, while working to prevent unintended pregnancies and 
improve women's health care, is the right thing to do. I 
personally would appreciate, as would men and women--it is not 
only women. Men need this insurance coverage. We are all 
looking for this committee to report this bill on the floor so 
it is there, we have a vehicle that is freestanding, that we do 
not have to worry about attaching to some appropriation bill, 
but we will do whatever we have to do to get this passed.
    Thank you all very much.
    Senator Mikulski. Thank you very much, Senators Reid and 
Snowe, for, one, your leadership on this issue and your 
testimony.
    [The prepared statement of Senator Reid may be found in 
additional material.]
    Senator Mikulski. I do not have any questions. We know that 
you are both pressed for time, in the leadership that you are 
providing.
    Senator Kennedy, would you have any questions?
    The Chairman. Just a quick reaction. I think Senator Reid 
gave it to us. In the budget, there was a proposal to eliminate 
the Federal employees coverage, too. So Senator Snowe reference 
that as something that we have witnessed, this course in action 
over the recent years, and it has proven to be successful. I 
imagine you are warning us to be alert as to the possibilities 
of eliminating that existing coverage, and take the lessons 
from the Federal employees health insurance and to learn from 
that experience, which has not resulted in the increased cost, 
which is the principal opposition element in that, and to make 
sure that others are going to have it included.
    I do not know whether there is anything in addition you 
wanted to add on how successful it has been in the Federal 
health insurance proposal. I do not want to delay you.
    Senator Snowe. That, I think, is a good predicate for the 
reasons why this legislation will not raise premiums. In fact, 
in reading the OPM letter to health insurers, saying that if 
you have to make adjustments in the premiums, please do so, as 
a result of this legislation, and it did not happen. We got a 
response to our letter to OPM, saying very emphatically that 
does not lead to increases. So we hope that that coverage will 
be preserved for Federal employees in the Treasury-Postal 
appropriations in this go-around, but we also should draw from 
that that we should be able to establish national legislation 
without raising health insurance premiums, which I know may be 
cited later on in the testimony here by others, that somehow 
that may be a possibility. But I do not see that. In fact, I 
draw the opposite conclusion from this big study trial with 
Federal employees, of 9 million people in that pool.
    The Chairman. Thank you very, very much.
    Senator Reid. If I could just say this, too. Again, Olympia 
and I like to throw these statistics around, and they are 
important, but think what it would do to individual families 
if, after the progress we have made, Federal employees no 
longer had this benefit. It is a shame. We cannot allow that to 
happen to Federal employees' families. That is why we not only 
have to protect Federal employees' families, but we also have 
to extend this, because it deals with people, making their 
lives better, doing away with unintended pregnancies. That is 
what it is about, 3.6 million. We can do so much good for 
American families by having this legislation apply to 
everybody.
    Senator Snowe. In fact, Madam Chair, I would like to ask 
unanimous consent to include in the record the letter from OPM 
regarding the effects of extending coverage to Federal 
employees. I think that would be an important part of the 
record.
    Senator Mikulski. Without objection, so ordered.
    [The OPM letter follows:]
               U.S. Office of Personnel Management,
                                     Washington, DC, 20415,
                                                  January 16, 2001.
Marcia D. Greenberger,
National Women's Law Center,
Washington, DC, 20036.

    Dear Ms. Greenberger:
    Thank you for your recent inquiry about the Federal Employees 
Health Benefits (FEHB) Program and the extent to which it covers 
contraceptive drugs or devices.
    As you may know, the Office of Personnel Management administers the 
FEHB, ensuring that it provides the roughly nine million Federal 
employees, retirees, and their family members covered by it with the 
best possible health care options available. It is the largest 
employer-sponsored health benefits program in the United States, with 
approximately 300 health plans participating in it and providing over 
$18 billion in health care benefits a year.
    In 1999, passage of Public Law 105-277, required FEHB plans to 
cover the full range of FDA-approved prescriptions and devices for 
birth control. Implementation of the law occurred smoothly and without 
incident. Because 1999 premiums had already been set when contraceptive 
coverage was mandated, the increased coverage had no effect on 1999 
premiums. We told health carriers we would adjust 1999 premiums, if 
needed, during the 2000 premium reconciliation process. However, there 
was no need to do so since there was no cost increase due to 
contraceptive coverage.
    Please do not hesitate to contact us again if you have additional 
questions about the Federal Employees Health Benefits Program.
            Sincerely,
                                        Janice R. Lachance,
                                                          Director.
                                 ______
                                 
    The Chairman. Thank you very much.
    Senator Mikulski. Thank you very much, Senators. I look 
forward to working with you and moving this to the floor.
    Senator Mikulski. While our colleagues are leaving, we 
would like to then invite the witnesses for panel two: Jennifer 
Erickson, a pharmacist who took this issue to the courts; Dr. 
Anita Nelson, an OB/GYN representing the American College of 
OB/GYNs; Kate Sullivan, the director of health care policy from 
the Chamber of Commerce; and Marcia Greenberger, the co-
president of the National Women's Law Center, a long-standing 
advocate of the legal remedies to discrimination against women. 
I want to first turn to invite Ms. Erickson to give her 
testimony.
    Ms. Erickson, I know you are from the State of Washington, 
and your Senator, who is also a dear colleague on this 
committee, Senator Patty Murray, wanted to introduce you 
personally. Somewhere she is circling some airport, and who 
knows? She might parachute in here herself, because she was so 
eager to do this introduction. But let me just let others know 
who you are. You are a professionally-trained pharmacist. You 
work for a pharmaceutical company named Bartell, and you live 
in Bellevue, WA. That is kind of the data background. But, 
also, as we understand it, you took a personal situation where 
you did not have insurance coverage for prescription 
contraceptives and were so concerned that you decided to move 
this as a legal challenge. How like the United States of 
America. We do turn to our courts and we turn to our 
legislative bodies to redress the remedies and to come up with 
balanced solutions. So we would like to hear from you today. We 
would like to hear what you did, why you did it, and why you 
think we have got to consider some new legislative frameworks. 
So, a most cordial welcome.

   STATEMENTS OF JENNIFER ERICKSON, PHARMACIST, BARTELL DRUG 
COMPANY, BELLEVUE, WA; ANITA L. NELSON, M.D., CHIEF OF WOMEN'S 
HEALTH CARE PROGRAMS, HARBOR-UCLA MEDICAL CENTER, TORRANCE, CA, 
    ON BEHALF OF THE AMERICAN COLLEGE OF OBSTETRICIANS AND 
  GYNECOLOGISTS; KATE SULLIVAN, DIRECTOR, HEALTH CARE POLICY, 
    U.S. CHAMBER OF COMMERCE, WASHINGTON, DC; AND MARCIA D. 
    GREENBERGER, CO-PRESIDENT, NATIONAL WOMEN'S LAW CENTER, 
                         WASHINGTON, DC

    Ms. Erickson. Thank you. Madam Chair and members of the 
committee, thank you for allowing me to testify this afternoon. 
My name is Jennifer Erickson and I am the class representative 
for the Erickson versus Bartell Drug Company case. I am pleased 
to have been invited to testify in support of the Equity in 
Prescription Insurance and Contraceptive Coverage Act. I 
consider myself in many ways a typical American woman. My 
husband, Scott, and I have been married for 2 years. We both 
have full-time jobs in the Seattle area and are working hard to 
save money. We recently bought our first house, and we spent a 
lot of time this summer painting and fixing it up. My husband 
and I are both looking forward to starting a family. However, 
we want to be adequately prepared for the financial and 
emotional challenges of parenting.
    Someday, when we feel ready, Scott and I would like to have 
one or two children, but we know we could not cope with having 
12 to 15 children, which is the average number of children 
women would have during their lives without access to 
contraception. So I, like millions of other women, need and use 
safe, effective prescription contraception. Like many 
Americans, I get my health insurance through my employer. I am 
a pharmacist for the Bartell Drug Company, which is a retail 
pharmacy chain in the Seattle area. About 2 years ago, shortly 
after I started working there, I discovered that the company 
health plan did not cover contraception. Personally, it was 
very disappointing for me, since contraception is my most 
important ongoing health need at this time.
    For many women, it may be the only prescription she needs. 
But it was also troubling to me professionally, as a health 
care provider. As a pharmacist who serves patients every day, I 
see on a daily basis that contraceptives are central to women's 
health. Contraception is one of the most common prescriptions I 
fill for women. I am often the person who has the difficult job 
of telling a woman that her insurance plan will not cover 
contraceptives. It is an unenviable and frustrating position to 
be in, because the woman is often upset and disappointed, and I 
am unable to give her an acceptable explanation. Why? Because 
there is no acceptable explanation for this shortsighted 
policy.
    All I could say was, ``I do not know why it is not covered. 
My pills are not covered, either, and it does not make any 
sense to me.'' Oral contraceptives cost approximately $30 per 
month, and I know that I am very fortunate. I have a secure job 
and a good income, but for many women it is a real financial 
struggle to pay this cost every month year-in and year-out. My 
perspective from behind the pharmacy counter gives me a clear 
picture of the burden this policy places on women, especially 
the low-income women who are the least-equipped to deal with an 
unplanned pregnancy. I have seen women leave the pharmacy 
empty-handed because they cannot afford to pay the full cost of 
their birth control pills, and that really breaks my heart.
    I finally got tired of telling women, ``No, this is one 
prescription your insurance will not cover.'' So I took the 
bold step of bringing a lawsuit against my employer to 
challenge its unfair policy. I did it, not just for me, but for 
the other women who work at my company who are not so 
fortunate. I thank Planned Parenthood for their outstanding 
legal counsel in my case. I am proud that the victory in my 
case will help the women in my company. The court ordered 
Bartell to cover all available forms of prescription 
contraception and all related medical services in our health 
plan, and I am very pleased that the company recently changed 
its policy to comply with the court's order.
    Despite our victory in Federal court, I know that my case 
is not enough to help all of the American women who need this 
essential health care. At this point, my case is directly 
binding only on Bartell. Nearly every day, one of my customers 
thanks me for coming forward and congratulates me on winning 
the case, but many of the women I serve at my pharmacy counter 
still do not have insurance coverage for the contraception they 
need. I know that some companies are still choosing to ignore 
the recent legal developments.
    Planned Parenthood has created a web site, 
covermypills.org, with tools to help women whose employers do 
not cover contraception. But I also know that Title 7, the 
anti-discrimination law that my case is based on, does not 
cover all women, and even more important, women should not have 
to file Federal court lawsuits to get their basic health care 
needs covered. So, today, I am speaking for millions of 
American women who want to time their pregnancies and welcome 
their children into the world when they are ready. On behalf of 
the women of this Nation, I urge you to enact this 
comprehensive legislation because every woman, no matter what 
State she lives in or where she works, should have fair access 
to the method of contraception she needs.
    Thank you very much.
    Senator Mikulski. Thank you very much, Ms. Erickson, for 
your testimony. I know it is not easy to--think about going to 
court. It is an enormous undertaking. The personal stress, the 
financial enormity, is really something when you go against 
your employer, and we are going to come back and ask some more 
questions about that. What we are going to do is listen to 
everybody testify and then come back and ask some questions. I 
anticipate my colleagues will be joining me. It is Monday 
afternoon and they are trying to get back to Washington, and I 
think it is more a problem of airlines and delays, which is a 
whole other hearing. [Laughter.]
    [The prepared statement of Ms. Erickson may be found in 
additional material.]
    Senator Mikulski. But I would like now to welcome Dr. Anita 
Nelson. Dr. Nelson is representing the American College of OB/
GYNs. She herself is quite distinguished in that field, a 
professor at the Department of OB/GYN at the University of 
California-L.A., and she is also the medical director of the 
Women's Health Care Clinic at Harbor-UCLA. She, in her career, 
has focused on contraception, menopause, and gynecologic 
infection, often being the principal investigator of several 
NIH research grants, writing articles, professional journals, 
magazines, the kind of news you can use, and authored books on 
contraceptive methodologies for women.
    We look forward to hearing from Dr. Nelson, and we know you 
speak not only for yourself, but for your field, and we believe 
that there are other physicians who have also accompanied you 
here today; is that right? So why don't you just proceed and 
share with us your profession expertise?
    Dr. Nelson. Thank you, Chairman. Chairman Mikulski and 
members of the committee, I am Dr. Anita Nelson, as was just 
identified, testifying on behalf of the American College----
    Senator Mikulski. Dr. Nelson, pick up that microphone a 
little bit.
    Dr. Nelson. I will pick up that microphone. Is that better?
    Senator Mikulski. There you go.
    Dr. Nelson. I am just too tall. There we go.
    Senator Mikulski. Dr. Nelson, you can never be too tall. 
[Laughter.]
    Dr. Nelson. --testifying on behalf of the American College 
of Obstetricians and Gynecologists, an organization 
representing over 41,000 physicians dedicated to improving 
women's health care. I am pleased to testify in support of S. 
104, the EPICC Act, introduced by Senators Harry Reid and 
Olympia Snowe. EPICC would remedy a long-standing inequity in 
insurance coverage, not only by providing coverage for 
prescription methods of birth control, but also for the 
counseling that is needed for their effective use.
    Inadequate health insurance coverage of prescription birth 
control remains a glaring medical problem for American women. 
Contraception is a basic health care need. Non-prescription 
forms of contraception, such as condoms and spermicide and 
natural family planning, reduce the risk of pregnancy. But 
prescription birth control methods are dramatically more 
effective and allow couples more spontaneity in their lives. 
Sexual expression is obviously an important part of human 
experience, or there would not be so much interest in Viagra. 
Biologically, we know that women are at risk for pregnancy for 
nearly 40 years of their lives. Without contraception, the 
average woman could have more than 12 pregnancies, a prospect 
that is unappealing to most women and would place the health of 
both the woman and her children at risk.
    Unfortunately, for far too many American women, their 
insurance plans do not cover the cost of their birth control. 
Almost half of fee-for-service plans have no coverage of any of 
the five most common prescription contraceptives. HMOs have a 
better record, but only four out of 10 routinely cover all five 
common methods. I have known women who have had to skip their 
pills for months because their finances were tight. Perfect 
candidates for IUDs have been unable to pay the up-front costs 
and have had to settle for less-effective methods.
    If a woman cannot afford her birth control pills or an IUD, 
she certainly cannot afford a pregnancy. The lack of 
appropriate contraceptive choices is one of the greatest 
barriers to effective contraceptive use. We will be successful 
in reducing unintended pregnancy when women can obtain the 
particular contraceptive that best meets their social, economic 
and health needs, and when they have full access to 
contraceptive counseling that teaches them how to effectively 
use their method.
    Allow me to briefly discuss the major public health reasons 
for ensuring that women have access to contraception. First, 
contraception prevents unintended pregnancies and abortions. Of 
all the industrialized nations, this country has the highest 
rate of unintended pregnancies. Every year, approximately 50 
percent of all pregnancies in this country are unintended, and 
50 percent of these pregnancies are terminated. Perhaps even 
more importantly, contraception saves and improves the quality 
of babies' lives. The National Commission to Prevent Infant 
Mortality estimated that 10 percent of infant deaths could be 
prevented if all pregnancies were planned.
    Contraception gives women an opportunity to prepare for 
pregnancy, rather than having it happen to them accidentally. 
We know that women who take folic acid before they conceive 
reduce their risk of having neural tube defects in their babies 
by 50 percent. Diabetic women who change their medications 
before they become pregnant decrease their babies' risk of a 
major congenital anomaly from nine percent to less than one 
percent. Interestingly, women who plan their pregnancies are 
less likely to smoke or to drink alcohol while they are 
pregnant.
    Another important point is that contraception allows women 
with serious medical conditions to control their fertility. 
Pregnancy can be life-threatening to women with serious medical 
conditions such as heart disease, diabetes, lupus, and high 
blood pressure. Contraception can help these women prevent 
pregnancy altogether, or can help them postpone pregnancy until 
they are healthy enough. Contraception improves maternal 
health. Family planning is critical to improved maternal health 
by allowing women to control the number and space the timing of 
their pregnancies. Women who conceive within 6 months of 
childbirth increase the risk of pregnancy complications.
    Very importantly, contraception is cost-effective. Studies 
in my own State of California demonstrated that for every 
dollar invested in family planning, over $14 is saved. The more 
effective birth control methods are the most cost-effective. 
For example, every copper IUD placed saves the health care 
system and society over $14,000 within 5 years. However, due to 
rapid turnover of insured individuals, each individual 
insurance company will not reap these economic benefits until 
all companies are required to play by the same rules and cover 
all prescription methods.
    Contraceptive coverage is a basic health care need, just as 
is coverage for diabetes and high blood pressure treatments and 
vaccinations. Federal legislation is critical. ACOG supports S. 
104 and urges the members of this committee to support this 
important legislation. I thank the Chair and this committee for 
holding this hearing today and for allowing me the opportunity 
to testify. S. 104 is important to our Nation's women and their 
families.
    Thank you.
    Senator Mikulski. Thank you very much, Dr. Nelson.
    [The prepared statement of Dr. Nelson may be found in 
additional material.]
    Senator Mikulski. Now the committee would like to turn to 
Kate Sullivan, who is the director of health care policy for 
the Chamber of Commerce. The Chamber of Commerce represents 
more than 3 million businesses in the United States. First of 
all, Ms. Sullivan, we welcome you. I know you feel like you are 
on the hot seat because everybody is for this bill, and you 
have some flashing yellow lights about it, and we want to hear 
this. So, relax. We are not going to treat it like a quiz here. 
We know you have come with really a great background to the 
Chamber. You were the director of government programs at a 
nonprofit health system in Chicago, so you have been right out 
there in the trenches. You have been a health care adviser for 
members of Congress, a dear friend like Congresswoman Nancy 
Johnson, as well as Harris Fawell--that is F-A-W-E-L-L, not 
Reverend Falwell--and that you worked for Governor Jim Edgar, 
the Washington State women are really represented here. We know 
that you have an undergraduate degree from Georgetown and a 
masters of health administration from GW. So let's hear your 
views on this legislation.
    Ms. Sullivan. Thank you very much, Madam Chairwoman. I do 
appreciate the opportunity to provide the perspective of 
employers who are voluntarily providing health coverage to more 
than 172 million Americans. Employers do so because having a 
healthy workforce is essential to productivity, and most 
Americans would be unable to afford or even access a health 
plan if they did not have one through their jobs.
    Unfortunately, the affordability of this coverage is 
quickly evaporating. Last week's report that job-based health 
coverage has increased at the greatest rate in nearly a decade 
should really be a wake-up call to the Congress. Small 
employers are once again the hardest hit, reporting health plan 
inflation rates of 16.5 percent on average. For employers of 
all sizes, health plan costs are now more than $2,600 a year 
for single coverage, and more than $7,000 a year for family 
coverage. Given the anemic economy, employers can no longer 
keep up with the rising cost of their health plans. Employees 
are making bigger monthly premiums, paying larger co-payments 
for doctors and prescription drugs, and contributing more 
toward their deductibles and coinsurance. 75 percent of large 
employers expect to further increase employee costs next year. 
The result is that more employees are turning down their 
employer's offer of coverage.
    One out of four employees who declines workplace coverage 
is uninsured, and when asked, they frequently State that it was 
just too costly to participate. Further increasing the cost of 
health coverage by imposing mandates of any kind, not just this 
mandate, really does jeopardize the continued availability of 
plans for both employers and working families. So while some 
women may gain under S. 104 coverage for their contraceptive 
needs, other women may lose their coverage entirely and remain 
uninsured, not only for predictable, comparatively nominal 
health care services, but also when they are accidentally 
injured, require surgery or experience a major illness.
    Government mandates also stifle health plans' efforts to 
provide consumers with a variety of choices and the ability to 
select the benefits most appropriate for their personal 
situations. Mandated contraceptive coverage is not the only 
government mandate the Senate is considering this year. Last 
month, this committee approved a broad expansion of the current 
mental health parity mandate. At the end of June, the full 
Senate passed managed care reform legislation replete with 
numerous mandates, and now this committee is prepared to 
further increase health plan cost.
    In addition to cost, S. 104 presents other problems for 
employers. The bill prohibits plans from conducting quality 
reviews to ensure various forms of contraception are being 
prescribed safely and appropriately. Plans also face greater 
risk from medical malpractice----
    Senator Mikulski. Could you repeat that sentence?
    Ms. Sullivan. The bill prohibits--there is a specific 
prohibition in the bill that prohibits plans from conducting 
quality reviews, which often are used to make sure that plans 
or providers are prescribing contraception appropriately for a 
particular patient.
    Senator Mikulski. I will come back to that as a question. 
Please continue, Ms. Sullivan.
    Ms. Sullivan. The plans also face greater risk from medical 
malpractice by being required to cover contraceptive services 
ordered by any provider without regard to training or medical 
expertise. The Chamber understands and appreciates the 
sponsors' good intentions with this bill, and many a well-
intentioned public policy has had unintended consequences. We 
believe the Congress is tackling the wrong issue. One out of 
six people in this country are uninsured. Women already face 
barriers in accessing affordable health coverage because of 
their work and income status. A Commonwealth Fund study last 
month reported that younger women are far more likely to be 
uninsured than older women.
    Not only do uninsured women not have contraceptive 
coverage, they are uninsured in the event of childbirth, a trip 
to the emergency room, or a diagnosis of cancer. Bit by bit, 
mandate on top of regulation, on top of more liability, 
lawmakers threatened the health and economic security of hard-
working Americans of both sexes. Rather than enrich the 
benefits that some already have, Congress needs to reign in its 
penchant for mandates. It should halt duplicative regulations 
that raise health system costs. Most importantly, it should act 
immediately to create new options for private health coverage 
and new ways to pay for it.
    Thank you.
    Senator Mikulski. Thank you very much, Ms. Sullivan. We 
appreciate those views and are going to come back to them, 
those particularly regarding to quality and who prescribes, 
because as Dr. Nelson said, the counseling and the appropriate 
method, and, in fact, if any method at all. So, thank you. 
Actually, you brought up something I did not know about the 
bill. I appreciate that.
    [The prepared statement of Ms. Sullivan may be found in 
additional material.]
    Senator Mikulski. Let's turn to Marcia Greenberger now. She 
is the founder and co-president of the National Women's Law 
Center. She is an expert on women and the law, fighting for 
women's rights in employment, health and education for three 
decades, written many articles on legal issues, participated in 
key legislative initiatives and litigation, both Federal and 
State, to advance the cause of women and their families, and 
has often appeared on various talk shows to say in plain 
English, without a lot of footnotes and annotations, really the 
impact sometimes on the law, either for us or against us, but 
most of all has been a very strong advocate of keeping the 
courthouse door open to address those grievances so Ms. 
Erickson could go to court; a graduate of Georgetown Law and a 
member of the American Bar and many other prominent bars. We 
welcome you and look forward to your testimony.
    Ms. Greenberger. Thank you very much, Madam Chair Mikulski. 
It is a particular pleasure and honor to have the chance to 
testify before you and this committee. You have been such a 
leader on women's health. There are countless protections that 
women of this country and their families now have because of 
your leadership, and we are very grateful for all that you have 
accomplished on our behalf, and are especially grateful, too, 
for your interest in this most important topic that is the 
subject of the hearing this afternoon.
    I would ask that my full statement, with attachments, be 
included the record, and just say that I actually am a graduate 
of the University of Pennsylvania Law School. So they have to 
take me with my accomplishments and my problems, although I am 
part of a program at Georgetown Law Center.
    Senator Mikulski. That is where I got off-track.
    Ms. Greenberger. Yes. So I am proud that I have a 
connection there, as well. The National Women's Law Center 
began almost 30 years ago, and as you said, we have been 
involved in major legal and public policy initiatives to 
improve the lives of women and their families ever since. So it 
comes as no surprise that the center's involvement in 
pregnancy-related discrimination, which is really at the heart 
of this issue, dates back to our beginning in 1972, and we were 
also involved, not only in litigation on the issue, but the 
Pregnancy Discrimination Act of 1978, because it took 
congressional action to get maternity coverage in health 
insurance plans covered by employers.
    I know that the Chamber of Commerce is opposed to mandates, 
generally. They were opposed to the Pregnancy Discrimination 
Act at that point, as well as they are opposed now. But 
sometimes, unfortunately, mandates are the only way that 
justice can be served and the ends of fairness can be secured. 
I believe that that is the case right now. We were honored to 
be a part and working on the Erickson case, and had filed a 
petition with the Equal Employment Opportunity Commission on 
behalf of 60 organizations, and ultimately the EEOC did, as has 
been said, find that it is a violation of that Pregnancy 
Discrimination Act and Title 7 to exclude comprehensive 
coverage otherwise from employer-provided health insurance 
plans.
    We have taken those legal victories and actually been 
successful in helping a number of women since who have approach 
their employers and asked for coverage, and we have a web site, 
nwlc.org/pillforus, because we care so much about helping women 
and their families around the country get this essential 
coverage, as has been described by the other panelists. I want 
to just add two points very quickly before I turn to the EPICC 
legislation that we have been talking about. One is there has 
been a discussion about the importance of protecting women's 
health and the vital role that contraception plays.
    It is essential. We are, in fact, 21st in the world on 
maternal mortality, not a record that the United States should 
be proud of, and clearly our record on infant mortality is a 
record that needs major improvement, as well. It is far past 
the time when contraceptives and better maternity and health 
care coverage for women is needed, and we see extended health 
care coverage, as Ms. Sullivan said, as essential. We know you 
do, Senator Mikulski, and have dedicated a career to working 
toward that end. But we also have to be sure, not only that 
women and their families have insurance, but the insurance they 
have covers their core health care needs, like contraception.
    Now let me turn for a minute to talk about why EPICC is so 
important, even with some of these victories in the courts and 
with the EEOC now on our side with Title 7. These laws and also 
the State laws where they exist--but these Federal laws deal 
with employer-provided insurance plans that provide 
prescription drug coverage if an employer is covered by Title 7 
and the Pregnancy Discrimination Act, a law that prohibits 
discrimination in employment and protects women.
    Well, employers are only covered if they employ 15 or more 
employees. Of course, for those employers who do not provide 
insurance coverage at all, individuals must go to other group 
plans or buy individual insurance in order to secure health 
insurance coverage. So millions of women receive their 
insurance from a source not covered by Title 7. 16 million 
Americans obtain health insurance from private insurance other 
than employer-provided plans, people who are self-employed, 
employed by employers who offer no health insurance, as I said, 
part-time, temporary, and contract workers, others.
    Women are disproportionately represented in a number of 
these categories, especially part-time, temporary, and contract 
workers. Moreover, since only those employers with 15 or more 
employees are covered by Title 7, that leaves out 14 million 
workers who are employed by entities that fall beneath this 
threshold. We know from unfortunate experience with maternity 
coverage after the passage of the Pregnancy Discrimination Act 
of 1978, that legislation like EPICC is essential to provide 
protection for those women. Just as is true with contraceptive 
coverage, before 1978, when Congress stepped in, it was common 
for insurance companies to exclude maternity coverage from 
their plans; basic prenatal delivery services were not in their 
standard policies.
    Now, in looking at what has happened over 20 years later, 
we see it is commonly covered now in employer-provided plans, 
but because there is no legal mandate to do so, insurers do not 
always include this in their standard benefits package. In 
fact, in some studies cited in my written testimony, we see 
this is a serious problem for women having to buy their own 
health insurance even today. In short, the contraceptive 
coverage problem will not take care of itself, unfortunately, 
without congressional action.
    Finally, I want to respond to a couple of the points that 
Ms. Sullivan raised. First of all, most of her testimony was 
based on the premise that this legislation would add to the 
cost of insurance. The other witnesses described in some detail 
why that premise is actually faulty. By covering 
contraceptives, employers will reduce their costs. We saw with 
the Federal Government no costs were incurred, no budgetary 
cost, no premium cost, and there have been a series of 
employer-provided studies that have actually shown--a Mercer 
study in 1998--that employers would save money, not cost money, 
if they covered contraceptives.
    A study by Gardner and Strader in 1996, that an employer 
saved 11 percent of its cost in just 1 year after covering 
contraception. The Washington Business Group did a study in 
2000 that talked about what the average cost savings would be; 
17 percent of all cost, 14 percent of direct costs would be 
saved. These cost savings are estimates from business studies, 
as well as the Federal Government's actual experience.
    My last point has to do with what I believe is Ms. 
Sullivan's misreading of EPICC, that it would interfere in any 
way with quality reviews or with the ability of insurers to 
deal with who prescribes. It simply puts those decisions on the 
same footing as any other decisions that insurance companies 
make. It protects against having more stringent requirements, 
but it allows the insurers and the employers to have the same 
requirements that they would have for any other provider 
requirements or quality insurance requirements. So I think that 
was a misreading and should not cause a problem.
    So, as a bottom line, this is a piece of legislation that 
makes bottom-line sense, dollars-and-sense sense, common sense, 
and sense in terms of human costs that can be so devastating as 
a result of unintended pregnancy. I will add one final point, 
that for some employers and some insurance companies, their 
exclusion of contraception is so extreme that they will even 
exclude it when it is being prescribed, not to prevent 
pregnancy, but to deal with other health conditions, 
dysmenorrhea or other health conditions. Clearly, it takes 
Federal legislative action to set this problem straight.
    Thank you.
    Senator Mikulski. Thank you very much, Ms. Greenberger.
    [The prepared statement of Ms. Greenberger may be found in 
additional material.]
    Senator Mikulski. First, I want to note that our colleague, 
Senator Patty Murray, has landed. I am going to ask questions 
for about five minutes and then turn it over to Senator Murray 
for a statement or whatever.
    Senator Murray, you should know, though, you have one 
current constituent from the State of Washington here, Ms. 
Erickson, but also Ms. Sullivan is from the State of Washington 
and actually worked in a community--aren't you from the State 
of Washington?
    Ms. Sullivan. I had worked for the Governor, in Chicago. I 
have a sister on Mercer Island, though, who voted for you and 
is a big fan. [Laughter.]
    Senator Mikulski. Also, I want to note that Senator 
Jeffords, our colleague, has a statement for the record, and we 
ask unanimous consent that it be included, and it is so 
ordered.
    [The prepared statement of Senator Jeffords follows:]

                 Prepared Statement of Senator Jeffords

    Madam Chairwoman, I am pleased that the full Committee is 
having this hearing today to discuss the issue of contraceptive 
insurance coverage. This is especially true given the June 
decision of a Federal District Court in Washington on this 
issue. The Court ruled that an employer's failure to cover 
prescription contraceptives in its otherwise comprehensive 
prescription drug plan constitutes gender discrimination in 
violation of Title VI I of the Civil Rights Act of 1964.
    As we in Congress have closely examined health insurance 
coverage, we have seen a growing disparity between men and 
women. Out-of-pocket health care expenses for women are 68 
percent higher than those for men, and most of the difference 
is due to non-covered reproductive health care. The vast 
majority of private insurers cover prescription drugs, but many 
exclude coverage for prescription contraceptives. Most plans do 
cover abortion and sterilization, but will not provide coverage 
for reversible contraception. This is an issue that the 
Congress should and must address.
    I am proud to be a cosponsor of S. 104, the Equity in 
Prescription Insurance and Contraceptive Coverage Act, and am 
pleased that the sponsors of this important legislation are 
here with us today. This legislation requires a health 
insurance plan that provides benefits for Food and Drug 
Administration (FDA) approved prescription drugs or devices, 
must also provide benefits for FDA-approved prescription 
contraceptive drugs or devices. Furthermore, it requires that 
if a plan covers benefits for other outpatient services 
provided by a health care professional, it must also cover 
outpatient contraceptive services.
    Thank you again for holding this hearing. I look forward to 
continuing to work with you and our other colleagues on this 
important issue.
    Senator Mikulski. Also, again, our colleagues, I know, are 
facing these airline situations. For any of our colleagues who 
wish statements either for or against the legislation, the 
record will be open for another 2 days to ensure that their 
statements will be included. The other is--I know Ms. Greenberg 
challenged you, Ms. Sullivan, and we will give you a chance to 
respond. One of the things we are going to do with the hearing, 
though, because the women of the Senate, on a bipartisan basis, 
are really working hard for what we call the Civility Zone. So 
we are not going to run it like ``Hardball.'' We are not going 
to run it like ``Softball,'' either. But we will give you a 
chance, because there are issues related to cost I know you 
want to comment on, and then we can proceed.
    But let me turn first to Ms. Erickson. A young woman, 
starting her career, her marriage--going to court is an 
enormous undertaking. First of all, the motivation to go to 
court, the time that it will take, the money, and then also you 
were not just suing. You were suing your employer. That 
obviously required tremendous motivation on your part. Could 
you tell us what was what you encountered in your day-to-day 
activity as a professional that so motivated you to take such a 
very, very big step, and to take it all the way up to the U.S. 
Supreme Court?
    Ms. Erickson. Thank you. I just want to say hi to Senator 
Murray, so I am glad that you are here today.
    Well, I guess I was just tired of being yelled at all day 
long by women. So there are so many women customers that I have 
that were angry about the fact that their prescription 
contraception was not covered, and as far as the women that I 
work with at Bartell Drugs, too, were also upset. The position 
that I had--I am currently pharmacy manager, and it seemed like 
I was the only one that was in a position to do anything about 
this. So I did write a letter to my company. I never imagined 
that I would have to go as far as making a lawsuit. I thought 
it would not be that hard to change their policy. But here I 
am, and they have changed it. Unfortunately, it is not enough. 
We did have a recent insurance commissioner hearing in 
Washington State, and there are still a lot of companies in 
Washington that feel that, ``Well, this case is up for appeal, 
it may not hold. Who knows what is going to happen?'' So thy do 
not really feel like they should change their policy yet, and I 
really thought it was important for me to be here today because 
of this fact, because there are so many States that still do 
not have laws that mandate----
    Senator Mikulski. 34 of them.
    Ms. Erickson. Yes--mandate laws that cover prescriptions. 
So that is why I am here, and I feel very strongly about it. I 
still have women that come into my pharmacy all the time, and 
they are so happy that someone has done something about it.
    Senator Mikulski. But, Ms. Erickson, first, if I could, 
when you went to your employer--I am using you both 
literately--not using you, but for witness purposes, not only 
you, but you metaphorically, again--you are a trained health 
care provider. You are part of the team. When you wrote your 
letter and tried to go up the chain of command, if you will, at 
a retail pharmacy, what were the obstacles that you ran into, 
and why did they say no and continually rebuff you? What was 
the rationale? What exactly did you encounter, both from a 
climate standpoint and a content standpoint?
    Ms. Erickson. Well, when I wrote the letter about a year-
and-a-half ago to their human resource department and asked for 
them to change their policy, their response was just that, ``We 
do not feel that it should be covered at this time,'' and it 
really was not any more than that. The answers that I got from 
people were, ``We just do not feel like it should be part of 
our policy. It is too expensive. It is going to add cost,'' all 
that kind of thing.
    Of course, from the testimony that was heard today, it does 
not add cost. It saves cost. That was pretty much the response 
I had from my employer.
    Senator Mikulski. Well, let me then turn to Dr. Nelson.
    Dr. Nelson, we are going to get into cost and so on, but 
cost/benefit is always not as precise as people think. I want 
to go back, not to your research or your academic positions, 
but do you continue to see women in clinical practice?
    Dr. Nelson. All the time.
    Chairman Dodd. We heard, essentially, how cheap 
contraceptives are. In your clinical practice, $30 a month--I 
am going to be the devil's advocate here--because you know my 
advocacy for the legislation. What do you hear in your practice 
about this? Why is it that women cannot afford this? $30 is 
less than going to McDonald's once a week, over the course of a 
month. What is the big deal here?
    Dr. Nelson. Because it is a big deal; 30 bucks is 30 bucks, 
and I work in indigent health care, and for a lot of women, 
that is a week's worth of food. Ironically, many indigent women 
are covered by Title 10, pharmacies and programs like that, so 
we have that. But I have a lot of patients who I see who are 
working poor, who are working at McDonald's and maybe they can 
pick up a hamburger there, but they certainly cannot pick up 
their contraception. So helping them control their fertility is 
desperately important.
    It is not just 30 bucks. It is 30 bucks a month, and that 
adds up to a lot of money over a year. It is also the IUD up-
front cost may look very big, although if you amortize it over 
the 5 years, she still has to come up with the dollars. I have 
had patients who could not get their Norplant out because their 
insurance company did not put it in, so they did not think they 
needed to take it out. So this whole issue of women being able 
to control their fertility, either by preventing pregnancy or 
by enabling it by the removal, is very important to equity and 
to women's rights overall.
    I would like to underscore, if I could, this other issue 
that was raised. I have patients who are using forms of birth 
control pills in menopause. There is a birth control pill we 
use in breast-feeding women that works very nicely to balance 
the estrogen for menopausal women, and they cannot get that 
prescription unless I indicate on there that it is not for 
contraception, and then I still have to write little letters to 
try to support that. So anything that could possibly be used 
for contraception will not be covered unless there are three, 
four or five stars on there, proving that it is not going to be 
used for contraception, which is a curious position.
    Senator Mikulski. Well, let me even go farther then. As you 
know, there are over-the-counter methods for birth control, and 
spermicides, condoms, etc. Why, if you do not have a lot of 
money--why can't you just go over-the-counter?
    Dr. Nelson. Well, for one thing, it depends upon how often 
you are having sex. If it is only a dollar an episode, it 
depends on how many episodes. That could easily be $30 a month, 
too. Then you have to put in the issue of they do not work as 
well, and you are running a bigger risk for pregnancy. The 
average failure rate for condoms, if women use condoms for a 
year, an average of 12 out of every 100 women will get 
pregnant. If you use spermicides alone, just for 6 months, 26 
women out of 100 will get pregnant. So there are huge 
pregnancy-related costs that do not appear on the up-front cost 
that we have to factor in when we are figuring the cost-
effectiveness of methods of birth control.
    Senator Mikulski. This will be my last question for this 
round, because my time is up, and I will turn to Senator 
Murray. You talked about the counseling, and I know one of the 
issues Ms. Sullivan raised was the appropriateness of the 
prescription, if a prescription is appropriate at all. Could 
you elaborate on what you find? There are those who, for 
example, some of my providers, and someone who has said, 
``Senator Mikulski, you would be surprised how little, often, 
young women know about themselves;'' that, second, even when 
they have been married--and they do not know about themselves, 
they do not know about their bodies; they do not know if they 
have had other kinds of medical conditions where one needs to 
really monitor for preparation for pregnancy and so on.
    Could you share with us what the counseling means? Is the 
counseling about how to practice better birth control, or is 
the counseling more than that, and is actually a form of 
primary care? Could you elaborate on that?
    Dr. Nelson. Certainly. Contraception will not work unless 
women know how to use it. To know how to use it, you need to 
know how your body works. I certainly underscore--in my 
experience, I was just talking to a group of mothers, 
adolescent mothers, who told me that they had learned--of 
course, from their peer groups--that the best method of birth 
control was to drink a lot of orange soda right after sex. 
Looking around the room at all the mothers that were there, 
clearly orange soda was not working. The myths that are out 
there--it is so important for women to know, yes, how it is 
that their bodies work so that they can make their method of 
birth control work, and to know how important it is to plan the 
conception of their children, not just the delivery, but to 
know how they need to be in good health. This whole 
reproductive health counseling is what we are hoping for from 
this bill for all women.
    Senator Mikulski. Thank you very much, Dr. Nelson. We will 
be turning to others for questions.
    Senator Murray, our dynamo Senator.
    Senator Murray. Thank you, Madam Chairman, and really thank 
you for having this hearing on, I think, a really important 
issue facing women and men across this country. I really 
appreciate your having this and I appreciate your holding it 
until I got here, my flight got in.
    Ms. Erickson, I just have to tell you it is great to have 
you here in the other Washington to share your story with so 
many others. You really are a hero at home, where you took on 
an issue that was not easy to take on, including your own 
employer, including a lot of issues surrounding it, and it took 
a lot of courage, I know, to do that. But you have made a 
tremendous difference in the lives of many women in my home 
State of Washington, and now have the opportunity to do that 
nationwide, and all of us owe you a great debt of gratitude.
    You have not only changed some insurance policies--have the 
opportunity to change more insurance policies--but I think 
really have raised an awareness issue about this that was not 
there before you took this to court. We always find that you 
make a difference when you educate people, and so there are a 
lot of people out there now who have been educated about an 
important issue, a women's health care issue that they either 
did not want to think or did not want to go into before. You 
have made it okay to talk about, and I really want to thank you 
for that. I think that took a lot of courage, but you have made 
a difference, and thank you very much from the bottom of my 
heart, and I know from many of our constituents out in 
Washington State and across the country.
    It took a lot of courage to do this. Did you think a lot 
about it, or was it just a matter of you were mad and you 
wanted to do something about it?
    Ms. Erickson. Like I said, I never thought I would have to 
file a lawsuit. So as far as--we went through a whole process. 
We went through the EEOC and this was kind of the next step, 
but it just seemed like there were so many people who were 
supporting it, that were supporting me. People I worked with 
were very supportive. Customers were very supportive. So there 
were definitely times when it was hard, but just the support of 
the people I worked with was really helpful.
    Senator Murray. Has there been any backlash from your 
employer?
    Ms. Erickson. No. Bartell Drugs is a great company to work 
for and I really enjoy working for them. As far as any 
backlash, no, there has not been any.
    Senator Murray. Have you heard a lot from women who now 
come into you to thank you for what you did?
    Ms. Erickson. Yes, it has been a little weird sometimes, 
but it has been great. It has been great to have people come 
and say because of your case--I never would have written a 
letter to my employer, I never would have done this without 
someone else doing it. People said I always was mad about it, 
but I never did anything about it until you did something about 
it. It is kind of like that bandwagon, especially when you 
mentioned raising awareness. I remember last summer when we 
filed the case, there were so many people that said they never 
new this was an issue or never knew this was important. And now 
because of the case, because of the publicity, people are much 
more aware of it and saying yes, it should be covered.
    Senator Murray. You are a folk hero and we all appreciate 
it very much and look forward to continuing to make a 
difference building on what you have been able to accomplish. 
Thank you very much.
    Ms. Erickson. Thank you.
    Senator Murray. Dr. Nelson, often we hear that moral 
arguments or the religious arguments are surrounding this, but, 
to me, this is really a women's health care issue. You started 
to talk about it a little bit in your response to Senator 
Mikulski a minute ago, but can you describe for the committee 
and for our record why it is a women's health care issue, in 
particular, having equal access to contraceptives?
    Dr. Nelson. In basic biology 100 percent of pregnancies 
occur to women, and the complications of the pregnancy on the 
woman's health, the complications of the pregnancy outcome, 
making sure that women have contraception, so they can plan for 
pregnancy and most importantly prepare for it--to make sure 
that they are taking the iron and vitamins, that their 
nutrition is appropriate, that they had been screened for all 
the infections that they might inadvertently pass on to the 
baby when they are pregnant, before they become pregnant. 
Waiting for accidental pregnancy and catching up with early 
prenatal care is not enough in the year 2001. We need to make 
sure that women are prepared for pregnancy, and the way to do 
that is with effective contraception, and the way to make sure 
every women has it, is making sure she has the coverage for it.
    Senator Murray. There are some women, who because of health 
care conditions, cannot become pregnant or it is a serious 
impact to their own health. You mentioned just a minute ago in 
response to a question that you had to specify that 
contraception was because of another health care. Did that make 
a difference? Do some insurance companies provide coverage 
under those--or are there insurance companies that preclude 
anyone from covering contraception, even if it has something to 
do with someone's health care other than becoming pregnant?
    Dr. Nelson. I have not personally had that as an issue, but 
I have heard reports in other States. I come from California, 
and we have now the Contraceptive Equity Act. But there are 
still some women who are not covered by that because of the 
other programs----
    Senator Murray. Even if it could be a serious consequence 
to them, say they are a diabetic or have another health care 
problem; it may not be covered if----
    Dr. Nelson. Unless I justify that it is not related to 
contraception, which leaves you the issue what about the 
contraception? In the bad old days in California, we still have 
that as an issue.
    Ms. Greenberger. Senator Murray, I know outside of 
California the EEOC dealt, for example, in one of its opinions, 
with an employer who would not cover the cost of 
contraceptives, even though it was not being prescribed to 
avoid pregnancy, but to deal with a health condition of a woman 
unrelated related to that. So we know, as a matter of fact, 
that for a number of plans and employers, their exclusion of 
contraception goes to such extremes that it does not even cover 
the cost of the contraceptive when being prescribed for a 
nonpregnancy-related condition.
    Senator Murray. We have heard some of the economic 
arguments, which just goes to the reason not to do this is it 
may cost money, and Ms. Sullivan, I am sorry I missed your 
testimony, but I assume you went somewhere around that in your 
testimony. I am curious, when insurance companies make 
decisions like this, is it based totally on economics? Is this 
going to cost us too much?
    Ms. Sullivan. Well, I am here representing employers, not 
insurance companies, and employers really do feel like they are 
sort of at the mercy of what insurance companies are telling 
them what this year or this quarter's premium is going to be. I 
think that the issue here is--that it really depends--when an 
insurance company prices insurance for a group, it really 
depends on what that plan is already covering and what the 
group looks like. Is there a very high potential that many 
women would avail themselves of this benefit? If so, the cost 
for you is going to be that much higher.
    Others have cited the FEHBP impact. Many of those plans are 
already covering at least some form of contraception. I can 
remember in 1987 being a very low-paid first-year Hill staffer 
in the House, that the largest plan at the time did not cover 
contraception or even routine visits to the doctor, and it 
actually did take a note in order to have it covered for an 
unrelated condition. Health plans have changed. They are 
evolving. Many employers do offer a choice of plans, which is 
hard, so you cannot do it if you are a small business, and 
small businesses frequently offer a managed care plan because 
it provides access to so many of these very popular, highly-
demanded benefits like preventive health care and greater 
access to coverage. The more traditional health plans, usually 
this covers sort of the major medical, those things that you 
cannot plan for, the really unexpected cases, and often they 
provide employees the ability to save for these routine, 
expected, predicted expenditures through a payroll deduction on 
a tax-free basis, and the money is made available to them on 
January 1st or the first day of that plan year.
    It is a trade-off, and to the extent that we want all plans 
to look more like HMO plans because they provide a lot of 
preventive health services up front, but we want them to have 
the freedom and no restrictions of indemnity plans, those plans 
are going to start getting really expensive, and our concern is 
that more people will not be able to continue to afford to 
participate in their health plans offered at work.
    Senator Murray. Ms. Greenberger, you talked a little bit 
about the economic analysis and what you have looked at. What 
is the economic analysis in terms of what it will cost 
insurance companies to provide it, and the cost of not 
providing this kind of coverage?
    Ms. Greenberger. Well, there have been several studies done 
actually by employer-based groups that have come to the exact 
opposite conclusion from Ms. Sullivan, and, in fact, have 
determined that it will save employers money if they cover 
contraceptives. So because it is not just a question of the 
cost of the contraceptive, per se, and those estimates have 
been about $1.43 a month. I saw another one, $1.43, $1.42 a 
month; not a very big cost alone. But you balance that against 
the savings in maternity coverage, in newborn coverage. It can 
be, in a Mercer study, $61,000 for prenatal care for a 
complicated delivery of a newborn. Newborn care can cost from 
$2 to $20,000. There is absenteeism related to pregnancy and 
unintended pregnancy, loss of productivity, stronger employee 
morale.
    So an employer's cost has to take all of those 
considerations into account, and that is why each of these 
studies has found, when you add them all up, there is actually 
a substantial savings of money to employers. As I mentioned, 
there was a study of a particular employer who, in just the 
first year alone, saved 11 percent of costs. The Washington 
Business Group just last year found that it would lead to a 17 
percent savings in cost, all costs, if contraceptives were 
included, and 14 percent just in direct health insurance cost 
if contraceptives were included; and that, of course, does not 
even speak to the cost of women and their families in having 
the kind of health conditions and unintended pregnancy 
consequences that not only affect their health, but also their 
future earnings potential.
    There are newspaper stories, unfortunately too much in the 
news over the last few weeks, about pregnancy discrimination, 
women being told that they cannot be hired or they cannot go to 
school if they are pregnant. We see women who have to pay and 
earn salaries to help support themselves and their families, 
and it is devastating for these women, just as a human matter, 
to have to deal with the cost, the human cost as well as the 
out-of-pocket cost.
    While it is fair to look at cost and to be serious in 
assessing what those costs would be, we see here it is not just 
a question of cost savings, but as we talked about before, it 
is so unfair to think and so discriminatory to think that the 
major FDA-approved contraceptives that are routinely excluded 
from health insurance plans are contraceptives, and that is 
plain and simple sex discrimination. We have a principle in 
this country that cost is not a defense to discrimination. It 
is not a defense to paying women less, that it will cost 
employers more to give them equal pay, even though we know 
employers have sometimes complained about having to give women 
equal pay. This is really a form of equal pay. This is their 
compensation. This is part of what they are working for, health 
insurance benefits, and they deserve the same value from their 
health insurance plans as their male colleagues have, as well.
    Senator Murray. I see my time has expired, but I again 
appreciate all of you coming and testifying on this.
    Ms. Erickson, especially to you again, thank you for 
traveling all the way across the country, and I look forward to 
working with you as we continue forward.
    Madam Chairman, thank you for your leadership on this 
issue. I look forward to building on what we have done in 
Washington State across the country.
    Senator Mikulski. Good. My State is one of the ones that 
has the law already. [Laughter.]
    Let me come back to you, Ms. Sullivan, for a minute. You 
raised some issues related to quality assurance, etc. Could you 
restate what you said in your testimony about what the 
legislation prohibits and your concern about that, please, 
around quality assurances?
    Ms. Sullivan. Right. My fellow witness over here said it 
may be a simple misreading of the bill, and we frequently take 
care of these things by working to clarify that truly the 
intent of the bill is actually the way this is spelled out.
    Senator Mikulski. Sure. We do not see it as----
    Ms. Sullivan. We certainly want to make sure that because 
employers are responsible for the health plans--we know that 
they can be held liable for what those plans do for the 
networks that are put together--we want to make sure that plans 
can do the quality review to make sure that contraceptive 
devices are being prescribed appropriately to someone that 
would not be considered to be at risk, and that the proper 
professionals with the right training are the ones who are 
prescribing these.
    Senator Mikulski. Well, I would like to instruct the Senate 
staff working on this, both majority and minority, to meet and 
discuss this with you and perhaps Ms. Greenberger, to be sure 
of this, because if we are going to do legislation, we want 
quality assurance, as well. It is in the interest, not only of 
the employer, to get value for their premium, but after working 
this hard to accomplish the legislative objectives, we, too, 
believe in quality assurance, though I believe that one of the 
best cost savings, ultimately, as well as quality assurance, is 
an item in the Patient's Bill of Rights that would say that 
access to an OB/GYN for a woman is equated with access to a 
primary care physician, exactly what we said.
    Many of these young women have undetected situations. It 
could be the beginning of Type II diabetes. We see that now 
with the weight gains in younger children. You see that. Also, 
they embark on what they are ready to be embarked upon, both 
physically and emotionally. So I feel that this is really a 
significant issue, to give access to the OB/GYN and others 
within the team, because I am sure you work very closely with 
the nurse midwifery position. But did you want to comment on 
that, Dr. Nelson?
    Dr. Nelson. I very much appreciate what you just said, but 
as we are reviewing those finesse points of the legislation, 
again, according to the support that we had for the Patient's 
Bill of Rights, to make sure that the health plans are out of 
the business of second-guessing the physicians in terms of who 
is the appropriate candidate for an IUD or for birth control 
pills; that that really ought to be, as much as possible, a 
decision between the woman and her physician.
    The scope of practice within each of the State laws will 
dictate who can give contraception. I am not thinking that 
podiatrists are going to try to put in IUDs. That is going to 
be well taken care of within existing frames; so that as we are 
talking about quality assurance, certainly that must be done, 
but not within the intrusions.
    Senator Mikulski. I will tell you, when we embarked upon 
mammogram quality standards, we had people doing mammograms 
using x-ray equipment, the x-ray technicians were not prepared. 
But let me come back to Ms. Sullivan.
    Ms. Sullivan, actually I think we all need to be clear. Ms. 
Sullivan is representing employers. She is not an insurance 
company, and I think we have to acknowledge that for our 
employers, they are caught in the middle between the people who 
work for them and their needs, and an American health care 
system that is not a comrade care system, but based on private 
insurance, Medicare and Medicaid; that is our triad. So it is 
the needs of the employee and then the escalating cost of 
private insurance. So what the Chamber is saying is that they 
are worried about the cost in order to meet their 
responsibilities.
    Is this kind of where we are heading in this?
    Ms. Sullivan. I just want--and I emphasized this in my oral 
remarks, as well. It is not just this requirement. Perhaps this 
will have no cost, depending on what your plan covers now and 
who is enrolled in your plan. If you are a very large business, 
such as those who typically belong to the Washington Business 
Group on Health or who use William Mercer for their consulting 
services, they tend to be able to absorb cost much more 
readily, and, in fact, studies like that are very beneficial to 
employers of all kinds, because they show that while there may 
be some initial up-front costs here, it is how it will benefit 
you in the long run.
    We do not support a mental health parity mandate, but we do 
encourage employers to find out how it is that productivity can 
be enhanced through the better use of SSRIs to treat 
depression. It really does come down to cost. It is not just 
this one. It is not just mental health parity. It is not just 
the ones that are in the Patient's Bill of Rights. It is sort 
of all this rising factor that employers are redesigning their 
health plans to cover more benefits, to give their employees 
more choice, more access to a broad range of providers. States 
have been passing a lot of these mandates, and employers have 
been complying with them when they offer those insured health 
plans. We have seen the cost of those insured health plans rise 
at a rate far greater than employers who self-insure, and that 
is the result of those mandates, those requirements.
    Putting all that aside, though, probably the biggest cost 
driver in health coverage right now is prescription drugs, and 
Ms. Erickson certainly knows this. Employers have been 
redesigning their health plans to raise those co-payments when 
they get those prescription drugs filled. Some have gone from a 
flat dollar amount to sharing in a percentage of the cost of 
the drugs. Some of them have increased their co-payments to $30 
per prescription, and at that point, you will have taken away 
any of the economic effects to the consumer that would be put 
forth under this bill, or force more employers to go----
    Senator Mikulski. That is exactly right, and we know that 
the whole cost of prescription drugs and how to meet our social 
responsibility will be the subject, also, of what to do in the 
area of Medicare. That is why I said at the opening of the 
hearing that women really pay a gender tax, not only on the pay 
issue, in which gains are being made, not only in the fact that 
we are penalized in Social Security because of our time out for 
child-bearing and child-rearing, and this particular issue. 
Then, when you get old and you are on Medicare, you tend to be 
the survivor again, and you are paying for prescription drugs 
there.
    We have done a very good job in reducing the marriage 
penalty. Now I think we have got to really take a look at how 
to reduce the gender tax and, at the same time, acknowledge 
that there are other costs. I will tell you a fact that was so 
disturbing for me--and, Dr. Nelson, I would like your viewpoint 
on this--that 50 percent of the pregnancies in the United 
States are unwanted. That is a pretty big number, and of that 
50 percent, 25 percent end in abortion.
    Dr. Nelson. It is 50 percent of the unwanted pregnancies, 
unintended; so it is 25 percent overall.
    Senator Mikulski. Then the other 50 percent are initially 
unwanted. I know very few people, when the baby is born--of 
course, adoption is an option--but that often it is not only 
the unintended, it is the unprepared. It is the low birth 
weight. It is the premature baby, the significant cost of the 
dazzling breakthroughs we now have in neonatal care, and it is 
marvelous what we do, but it is expensive. I think we ought to 
spend the money. But could you share with us really what you 
see, both in your practice and in your work with the American 
College? This issue of abortion because of unintended is really 
troubling. What is the view from the clinical side here?
    Dr. Nelson. I think every one of us would like women to be 
totally prepared for pregnancy and plan for pregnancy. That is 
our goal, our image of where we want to be in this century for 
women. To let pregnancy happen by accident, whether it is 
acceptable or unwanted, is really from a medical standpoint 
unacceptable today, because it encourages so much risk. We know 
that we get better babies and healthier mothers and better 
families if women are prepared, not only from a financial and 
an emotional standpoint, but just from a pure medical 
standpoint.
    Why not get the pap smear on that lady before she gets 
pregnant so we can treat her cervical dysplasia before she gets 
pregnant? Why not make sure she does not have chlamydia before 
the baby catches it, or she has some other infection? That is 
our goal, and we do not there unless we have access to 
contraception for women. It is a very important medical issue, 
as well as the other issues that we have talked about in terms 
of equity for women and fairness and opportunity.
    Senator Mikulski. Well, Senator Murray, did you have any 
other questions?
    Senator Murray. I am done.
    Senator Mikulski. First of all, we want to thank everyone 
for their testimony, for the breakthrough people like Ms. 
Erickson, to Dr. Nelson, to Marcia Greenberger, and you, too, 
Ms. Sullivan. We acknowledge the issues facing employers, and 
quite frankly in all that we have done on the tax bill this 
past year, what I felt was that instead of across-the-board, 
big-buck tax breaks to other big-buck people, we should have 
had targeted tax cuts exactly to go to the employers. I am from 
a family of small business grocers, my grandmother having the 
best Polish bakery. So I often think, suppose we were still 
running that bakery, what would be the cost? So we are very 
mindful of that, and I would really look forward--in addition 
to while we are looking at how to provide comprehensive 
coverage to women--how we can also work with the employers, the 
good-guy employers who, using our tax code and perhaps other 
government mechanisms to really work with employers, to give 
help to those that practice self-help, and not only the self-
insured, because I think if you are an employer and you are 
willing to step forward and provide health insurance, that 
means you are also inviting the mandates. Well, I believe we 
should not create unfunded mandates and we should be addressing 
this in the tax code.
    Ms. Sullivan. I appreciate your saying that, and that is 
the health care priority for the Chamber. I really do look 
forward to working with you and the committee members.
    Senator Mikulski. You mean the tax breaks for health 
insurance?
    Ms. Sullivan. Anything possible to get more people 
affordable health coverage in this country. There is a long 
range of things and I have got some good--I have got ideas----
    Senator Mikulski. You started to say, ``I have got some 
good ideas.'' Do not be modest. We did not put you in the 
middle to keep you in the middle. I hope you felt that your 
views were met with respect, and also we acknowledge the 
validity of those flashing yellow lights that you have raised.
    We are going to also be in a big battle on the prescription 
drug issue and we really welcome your views on this, because 
prescription drugs, particularly in the Medicare population--
and once we deal with that, I believe it will drive all 
frameworks for prescription drugs. Do you agree with that, Ms. 
Sullivan?
    Ms. Sullivan. I think it is really important, certainly 
to--it is a big concern with employers, about their rising drug 
cost, particularly for the retirees who are on Medicare. They 
want to continue to be able to provide that coverage to their 
retirees. They made a promise to them to help them with their 
health care costs as they rise, and I think it is very 
important, in addressing this Medicare coverage for 
prescription drugs, that you continue to work with employers to 
make sure that they continue to maintain that coverage, or 
otherwise the price tag just goes way up at that point.
    Senator Mikulski. I am sure Ms. Erickson is already hearing 
it from the old-timers; am I right?
    Ms. Erickson. This is what people complain of, as far as 
contraception, and I get all the elderly customers about drug 
prices. That is like the huge complaint I get at the pharmacy 
counter. I just say, ``You know, we do not make money on 
prescription drugs anymore. We have got a huge photo department 
and we sell lots of cards. That is how we make money as a 
pharmaceutical chain.''
    Senator Mikulski. Before this hearing closes, we have 
thanked you for your willingness to go to court on behalf of 
other women, but I want to thank you for the role you play as a 
retail pharmacist. My own mother, with her diabetes, and my 
father with Alzheimer's and so on, the pharmacist was the one 
that kept everything straight for us, to make sure their drugs 
were not contraindicated. There was a time when the cumulative 
effect of one prescription with the other had a negative 
consequence. In my day, growing up in the neighborhood, we 
called the pharmacist ``Doc,'' because they were the first 
health professional you often went to. We really know that you 
come with an enormous amount of training and skill, and almost 
like the employer, you are not the one who sets the price, but 
you get the grief. So we want to thank you. We want to just 
thank you for being on the front line. We want to thank you for 
working with the families, often of moms and dads, like in our 
own cases, that were too sick or too bewildered sometimes by 
the contraindications and so on. So we think the pharmacists 
are just great, and we are very well aware of the pharmacist 
shortage.
    But we will not go there on how we are going to pay for 
that. [Laughter.] But, again, we want to thank everyone, 
because here is my observation--I think Senator Murray would 
agree. Every woman at this table has made a difference in what 
they are doing, in each and every one of your fields of 
endeavor. But do you know what? We will work together, we are 
going to make change, and by the time this sessions adjourns, I 
think we are going to have a bill that everyone at the table 
feels good about, but most of all the American women feel 
secure about.
    Thank you very much.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

               Prepared Statement of Congresswoman Lowey
    I want to thank Chairman Kennedy, Ranking Member Gregg, my good 
friend Senator Mikulski, and distinguished members of the Committee for 
hosting this important hearing. It's an honor to speak in support of 
the Equity in Prescription Insurance and Contraceptive Coverage Act.
    I believe contraception is basic health care for women, and that 
universal coverage for the full range of contraceptive methods is long 
overdue.
    EPICC was first introduced in 1997 by Rep. Jim Greenwood and I in 
the House and Senators Olympia Snowe and Harry Reid in the Senate, and 
would require that health insurance plans cover prescription 
contraceptives in the same manner that they cover other prescriptions.
    My colleagues, now is the time to take action and pass this bill.
    Although abortion rates are failing, today--still--nearly half of 
all pregnancies in America are unintended and half of those will end in 
abortion. Increasing access to the full range of contraceptive drugs 
and devices is the most effective approach to reducing the number of 
unintended pregnancies--a goal we all share.
    Furthermore, planned pregnancies are healthier pregnancies. By 
increasing access to family planning infant deaths will be better 
prevented, more women will receive adequate prenatal care, and more 
sexually transmitted infections will get diagnosed and treated.
    Support for contraceptive coverage has only grown. According to a 
recent national survey, 87 percent of Americans support women's access 
to birth control, and 77 percent support laws requiring health 
insurance plans to cover contraception.
    Their message is clear: If we want fewer abortions and unintended 
pregnancies, we must make family planning more accessible.
    And the truth is, we're making progress. Since we first introduced 
EPICC, 16 states--including California, Connecticut, Delaware, Georgia, 
Hawaii, Iowa, Maine, Maryland, Missouri, Nevada, New Hampshire, New 
Mexico, North Carolina, Rhoda Island, Texas, and Vermont--have enacted 
contraceptive parity legislation.
    Beyond requiring plans to cover prescription contraceptives because 
it is good for women's health and reduces abortions, it is necessary to 
ensure the fair treatment of employees and their families.
    Currently, women of reproductive age spend 68 percent more in out-
of-pocket health care costs than men. This inequity persists in large 
part because the majority of insurers exclude coverage of reproductive 
health-related supplies and services.
    That's why in April, a federal court ruled that Bartell's, a large 
drug store chain, left a ``gaping hole'' in health care coverage for 
its female employees because their health plan excluded contraception. 
The Equal Employment Opportunity Commission (EEOC) also ruled in 2000 
that not covering contraceptives is sex discrimination.
    My colleagues, we cannot turn a blind eye to these recent 
developments. It's time to close our country's health care gender gap.
    I was proud to lead the successful fight to add contraceptive 
coverage for the 1.2 million American women participating in the 
Federal Employees' Health Benefits plan. It was an important first 
step.
    Before the contraceptive provision was enacted in FY 1999, 81 % of 
all FEHB plans did not cover the most commonly used types of 
prescription contraception (oral contraceptives or the pill, IUD, the 
diaphragm, Norplant, Depo Provera), while a full 10% covered no 
prescription contraception at all.
    Women need the full range of options because not every woman can 
use every form of birth control. Many women cannot used the pill--its 
side effects, such as migraines, can be truly disabling for some. Other 
women choose not to go on the pill because they are at special risk for 
stroke or breast cancer.
    Isn't it clear that women and men who want to have families, and 
want to plan their pregnancies, need more and better options?
    The American public thinks so, the courts think so, Republicans and 
Democrats alike think so.
    Mr. Chairman, we can work together to reduce the need for abortion 
and help Americans plan their families. Once again, thank you for 
allowing me to address the Committee. I am so pleased that this hearing 
is taking place, and strongly believe that this is a move in the right 
direction.
                  Prepared Statement of Senator Snowe
    Madam Chairwoman, Mr. Ranking Member and Members of the Committee, 
I appreciate the opportunity to address you today on the need for 
legislation I originally authored back in 1997--the bipartisan Equity 
In Prescription Contraceptive Coverage act--or EPICC--which currently 
has 42 cosponsors. I have the good fortune of being joined on this 
panel by Senator Reid who has been a partner with me in this effort, 
and I would like to thank him for his ongoing leadership on this issue. 
We both agree this is common sense public policy whose time has long 
since come.
    Madam Chairwoman, there should be no mistake--this issue boils down 
the principles of basic fairness--fairness for half this nation's 
population, fairness in how we view and treat a woman's reproductive 
health versus every other kind of health care need that can be 
addressed with prescription drugs. The facts are not in dispute--the 
lack of equitable coverage of prescription contraceptives has a very 
real impact on the lives of America's women and, therefore, our society 
as a whole. This is not overstatement, Madam Chairwoman and members of 
the committee. This is reality.
    It's been four long years since I first introduced EPICC, and 
according to the Alan Guttmacher Institute, in each of those four years 
women have spent over $350 per year on prescription oral 
contraceptives--for a total of over $1,500. Why? Because many insurance 
companies that already cover other prescription drugs do not cover 
prescription contraceptives. How can we continue to deny this 
fundamental coverage for prescription drugs that are a key component in 
women's reproductive health?
    All we are saying is that if an employer provides insurance 
coverage for all other prescription drugs, they must also provide 
coverage for FDA approved prescription contraceptives--it's that 
simple, it's that fair, and it builds on existing law and 
jurisprudence.
    As recently as June, the U.S. District Court for the Western 
District of Washington ruled in Erickson v. Bartell Drug Company that 
an employer's failure to cover prescription contraceptives in its 
otherwise comprehensive prescription drug
    plan constitutes gender discrimination, in violation of Title VII 
of the Civil Rights Act of 1964. 1 couldn't be more pleased that the 
plaintiff, Jennifer Erickson, is here today to share her story with the 
Committee--her case was the first of its kind, setting a legal 
precedent as well as bolstering the case for our legislation.
    In turn, the foundation for the District Court decision was a 
ruling by the Equal Employment Opportunities Commission--or EEOC--last 
December that an employer's decision to exclude coverage of 
contraceptives in a health plan that covered other prescription drugs, 
devices and preventive health care services violated Title VII of the 
Civil Rights Act regarding gender discrimination.
    Together, these two decisions form a ``one-two'' punch in favor of 
the approach we advocate today--an approach that's already been 
endorsed by a total of 16 states including my home state of Maine--that 
have passed similar laws since 1998. Today, another twenty states have 
contraceptive coverage legislation pending. That's a start, but it's 
not enough. Not only are these laws limited to state regulated plans, 
but this piecemeal approach to fairness leaves many American women at 
the mercy of geography when it comes to the coverage they deserve.
    But fairness is not the only issue. We believe that EPICC not only 
makes sense in terms of the cost of contraceptives for women, but also 
as a means bridging, at least in some small way, the pro-choice pro-
life chasm by helping prevent unintended pregnancies and thereby also 
prevent abortions. The fact of the matter is, we know that there are 
three million unintended pregnancies every year in the United States. 
We also know that almost half of those pregnancies result from just the 
three million women who do not contraceptives--while 39 million 
contraceptive users account for the other 53 percent of unintended 
pregnancies--most of which resulted from inconsistent or incorrect use.
    In other words, when used properly, contraceptives work. They 
prevent unintended pregnancies--we know that. Yet, according to the 
Kaiser Family Foundation, while 87 percent of covered workers in 
conventional health plans receive a prescription drug benefit, only 60 
percent have coverage for oral contraceptives -the most popular type--
begging the question, what is wrong with this picture?
    It certainly shouldn't be cost. A January 2001 OPM statement on 
EPICC-like coverage of federal employees under the FEHBP found no 
effect on premiums
    whatsoever since implementation in 1998. Let me repeat--no effect. 
In fact, some like the Alan Guttmacher Institute--argue that improved 
access to and use of contraception nationwide would save insurers and 
society money by preventing unintended pregnancies, as insurers 
generally pay pregnancy-related medical costs which can range anywhere 
from $5,000 to almost $9,000. Improved access to contraception would 
eliminate these costs and would reduce the costs to both employers and 
insurers.
    But even if none of this were true, a 1998 Kaiser Family Foundation 
nationwide survey revealed that 73 percent of those questioned still 
support insurance coverage of contraception even when told that the 
coverage would increase insurance premiums by $1 to $5. In fact, the 
survey found that the public is more likely to support insurance 
coverage of contraceptives, 75 percent, than Viagra--49 percent. That's 
not so surprising when you consider a June survey by NARAL showing that 
77 percent of Americans support laws requiring health insurance plans 
to cover methods of contraception such a birth control pills . . . and 
whopping 87 percent of Americans support access to birth control.
    Madam Chairwoman, the question before is now is, if EPICC-style 
coverage is good enough for nine million federal employees and their 
dependents . . . if it's good enough for every Member of Congress and 
every Senator--why isn't it good enough for the American people?
    Now, I know some will raise the issue of a ``conscience clause'', 
and I agree that this is a legitimate concern--one we have worked out 
before, and I believe can work out again. When the Senate agreed to 
ensure contraceptive coverage for federal employees, we addressed the 
concerns of our colleagues who felt that there needed to be a 
``conscience clause'' by amending EPICC to allow religious plans to opt 
out of this coverage if their beliefs and tenets are not consistent 
with this coverage. As we look to expand EPICC beyond the FEHB plans, 
we are willing to work again with those who support the inclusion of a 
conscience clause in EPICC. The basic fairness of EPICC is simply too 
important to do otherwise.
    Mr. Chairwoman, women should have control over their reproductive 
health. It is the best interests of their overall health, their 
children and their future children's health--and when we have fewer 
unintended pregnancies, we will have a reduced
    need for abortions. We need to finally fix this inequity in 
prescription drug coverage and make certain that all American women 
have access to this most basic health need. Again, I thank the 
Committee for this hearing and I look forward to working with you to 
advance this vital issue.
                   Prepared Statement of Senator Reid
    Thank you for inviting me to testify about insurance coverage for 
prescription contraceptives.
    I have said time and time again that if men suffered from the same 
illnesses as women, the medical research community would be much closer 
to eliminating diseases that strike women.
    The issue before us today is similar. If men had to pay for 
contraceptives, I believe the insurance industry would cover them. It 
was hardly surprising that less than two months after Viagra went on 
the market, it was covered by many insurance plans. Birth control 
pills, which have been on the market since 1960, are covered by only 
thirty-three percent of indemnity plans.
    The health care industry has done a poor job of responding to 
women's health needs. According to a study done by the Alan Guttmacher 
Institute, 49 percent of all large-group health care plans do not 
routinely cover any contraceptive method at all, and only 15 percent 
cover all five of the most common contraceptive methods.
    Ironically, most insurance companies routinely cover more expensive 
services, including abortions, sterilizations and tubal ligations.
    Apparently, insurers do not know what women--and their doctors--
have long known: contraceptives are a crucial part of women's health 
care. By helping women plan and space their pregnancies, contraceptive 
use fosters healthy pregnancy and healthy births by reducing the 
incidence of maternal complications, low birth weight and infant 
mortality.
    Sadly, financial constraints force many women to forgo birth 
control all together, leading to 3.6 million unintended pregnancies 
every year. Almost half of those end in abortion. If we are committed 
to reducing the number of abortions in this country, we need to 
eliminate the barriers to effective and affordable birth control.
    That is why the legislation Senator Snowe (R-ME) and I have 
sponsored--the Equity in Prescription Insurance and Contraceptive 
Coverage (EPICC) bill--is so important. In short, our bill would 
require health plans that provide coverage of prescription drugs to 
include the same level of coverage for FDA-approved prescription 
contraceptives. Our bill does not ask for special treatment of 
contraceptives--only equitable treatment within the context of an 
existing prescription drug benefit. EPICC will increase fairness, 
promote women's health, and reduce unintended pregnancies.
    Since Senator Snowe and I first introduced this legislation in 
1997, we have made some progress that is worth noting.
    In 1998, Senator Snowe and I, along with Congresswoman Lowey (D-
NY), fought to pass a provision that requires health plans 
participating in the Federal Employees Health Benefits Program--the 
largest employer-sponsored health plan in the world--to cover FDA 
approved prescription contraceptives. The Office of Personnel 
Management, which administers the program, reported in January that 
this benefit did not raise premiums ``since there was no cost increase 
due to contraceptive coverage.'' In spite of this, President Bush 
proposed eliminating this benefit in his budget.
    Just this past June, US District Judge Robert Lasnik handed down a 
landmark decision when he ruled that a Seattle company's policy of 
excluding prescription contraception from employee health benefits 
violated Title VII of the 1964 Civil Rights Act. The Judge ordered the 
company to cover all available methods of prescription contraception in 
its employee health plan.
    I am pleased that the plaintiff in this case, Jennifer Erickson, is 
here to share her story with us today. Ms. Erickson is the first woman 
in the nation to initiate sex discrimination charges against her 
employer based on the company's policy of excluding prescription 
contraception from employee health benefits.
    Jennifer Erickson's case builds on momentum from a separate ruling 
this past December by the Equal Employment Opportunity Commission 
(EEOC). In that case, the EEOC also ruled that denial of coverage for 
female contraceptives, if an employer offers other preventive medicines 
or services, is sex discrimination under the Civil Rights Act of 1964.
    In spite of these important advances, women will not have the 
contraceptive insurance coverage they deserve until Congress passes our 
EPICC legislation.
    An estimated 16 million Americans obtain health insurance from 
private insurance other than employer-provided plans. Only the 
enactment of EPICC will ensure that contraceptive coverage is offered 
by insurance providers.
    Women who receive their health care through work should not have to 
take their employers to court. We want to make family planning more 
accessible. We do not want an explosion in lawsuits.
    Equity in prescription contraception coverage is long overdue. Our 
bill has 42 cosponsors from both sides of the aisle and from both sides 
of the abortion debate. Senator Snowe and I are committed to moving 
this legislation. Promoting equity in health insurance coverage for 
American women while working to prevent unintended pregnancies and 
improve women's health care is the right thing to do.
                Prepared Statement of Jennifer Erickson
    Madame Chairwoman and Members of the Committee, thank you for 
allowing me to testify this afternoon. My name is Jennifer Erickson, 
and I am the class representative for the Erickson v. Bartell Drug Co. 
case. I am pleased to have been invited to testify in support of the 
Equity in Prescription Insurance and Contraceptive Coverage Act.
    I consider myself in many ways a typical American woman. My husband 
Scott and I have been married for two years. We both have full time 
jobs in the Seattle area and are working hard to save money. We 
recently bought our first house and we spent a lot of time this summer 
painting and fixing it up.
    My husband and I are both looking forward to starting a family. 
However, we want to be adequately prepared for the financial and 
emotional challenges of parenting. Someday when we feel ready, Scott 
and I would like to have one or two children.
    But we know we could not cope with having twelve to fifteen 
children, which is the average number of children women would have 
during their lives without access to contraception. So I, like millions 
of other women, need and use safe, effective prescription 
contraception.
    Like many Americans, I get my health insurance through my employer. 
I am a pharmacist for the Bartell Drug Company, which is a retail 
pharmacy chain in the Seattle area. About two years ago, shortly after 
I started working there, I discovered that the company health plan did 
not cover contraception. Personally, it was very disappointing for me, 
since contraception is my most important, ongoing health need at this 
time. For many women, it may be the only prescription she needs.
    But it was also troubling to me professionally, as a health care 
provider. As a pharmacist who serves patients everyday, I see on a 
daily basis that contraceptives are central to women's health.
    Contraception is one of the most common prescriptions I fill for 
women. I am often the person who has the difficult job of telling a 
woman that her insurance plan will not cover contraceptives. It is an 
unenviable and frustrating position to be in, because the woman is 
often upset and disappointed, and I am unable to give her an acceptable 
explanation. Why? Because there is no acceptable explanation for this 
shortsighted policy. All I could say was: ``I don't know why it's not 
covered. My pills aren't covered either and it doesn't make any sense 
to me.''
    Oral contraceptives cost approximately $30.00 per month. I know 
that I am very fortunate--I have a secure job and a good income. But 
for many women it is a real financial struggle to pay this cost every 
month, year in and year out. My perspective from behind the pharmacy 
counter gives me a clear picture of the burden this policy places on 
women, especially the low-income women who are the least equipped to 
deal with an unplanned pregnancy. I have seen women leave the pharmacy 
empty-handed because they cannot afford to pay the full cost of their 
birth control pills, and it breaks my heart.
    I finally got tired of telling women ``no this is one prescription 
your insurance won't cover.'' So I took the bold step of bringing a 
lawsuit against my employer to challenge its unfair policy. I did it 
not just for me, but for the other women who work at my company who are 
not so fortunate. I thank Planned Parenthood for their outstanding 
legal counsel on my case.
    I am proud that the victory in my case will help the women in my 
company. The court ordered Bartell to cover all available forms of 
prescription contraception and all related medical services in our 
health plan, and I am very pleased that the company recently changed 
its policy to comply with the court's order.
    Despite our victory in federal court, I know that my case is not 
enough to help all of the American women who need this essential health 
care. At this point, my case is directly binding only on Bartell. 
Nearly every day one of my customers thanks me for coming forward and 
congratulates me on winning the case; but many of the women I serve at 
my pharmacy counter still do not have insurance coverage for the 
contraception need. I know that some companies are still choosing to 
ignore the recent legal developments. Planned Parenthood has created a 
website with tools to help women whose employers do not cover 
contraception.
    But I also know that Title VII, the anti discrimination law that my 
case is based on, doesn't cover all women. And, even more important, 
women should not have to rile federal court lawsuits to get their basic 
health care needs covered.
    So today I am speaking for millions of American women who want to 
time their pregnancies and welcome their children into the world when 
they are ready. On behalf of the women of this Nation, I urge you to 
enact this comprehensive legislation because every woman, no matter 
what state she lives in or where she works, should have fair access to 
the method of contraception she needs. Thank you.
              Prepared Statement of Anita L. Nelson, M.D.
    Chairwoman Mikulski, Members of the Committee, I am Anita L. 
Nelson, MD, testifying on behalf of The American College of 
Obstetricians and Gynecologists (ACOG) an organization representing 
over 41,000 physicians dedicated to improving women's health care. I am 
pleased to testify, in support of S. 104, the Equity in Prescription 
Insurance and Contraceptive Coverage (EPICC) Act introduced by Senators 
Harry Reid (D-NV) and Olympia Snowe (R-ME).
    I am a Professor in the Department of Obstetrics and Gynecology at 
the University of California in Los Angeles. Currently, I serve as 
Medical Director of the Women's Health Care Clinic and Women's Health 
Care Nurse Practitioner Program at Harbor-UCLA Medical Center in 
Torrance, California. Also, I am the Program Director of Women's Health 
Care Teams for the Coastal County Health Centers and the Medical 
Director for the Research Division of the California Family Health 
Council in Los Angeles.
    While most (90%) health plans cover prescription drugs and devices, 
many do not cover prescription contraceptives. S. 104 seeks to provide 
coverage equity for prescription contraceptives and related medical 
services. Under this legislation, plans already covering prescription 
drugs and devices would be required to cover FDA approved prescription 
contraceptive drugs and devices. Also, plans that cover outpatient 
medical services would be required to include outpatient contraceptive 
services in that coverage. FDA approved contraceptives include birth 
control pills, intrauterine devices (IUDs), injections, implants, 
diaphragms, and the cervical caps.
    Inadequate health insurance coverage of prescription birth control 
remains a glaring medical problem for American women. Contraception is 
a basic health care need. As women's health care physicians, ACOG knows 
that access to contraception is critical to achieving healthy families. 
While some non-prescription forms of contraception play an important 
role in reducing the risk of sexually transmitted diseases (STDs) and 
pregnancy prevention, prescription birth control does a significantly 
superior job of pregnancy prevention and should be readily available to 
American women. Prescription contraception is also dramatically more 
effective than natural family planning methods, and allows couples more 
spontaneity in their lives.
    In a 1999 article, the Centers for Disease Control and Prevention 
(CDC) counted family planning among the ``Ten Great Public Health 
Achievements in the 20th Century.'' They reviewed the history of family 
planning during the past century and discussed the positive impact of 
contraception on American families. Access to contraception has 
contributed immensely to the better health of women and children. 
However, the CDC noted that providing access to the full array of 
reproductive-health services remains a challenge.
    The Equity in Prescription Insurance and Contraceptive Coverage Act 
would remedy a longstanding inequity in insurance coverage and help 
improve access to basic health care for millions of American women. 
EPICC would also guarantee women access to contraceptives that are 
appropriate to their medical and family history, age, health status, 
fertility desires, beliefs, and economic circumstances, all of which 
can change for an individual over time. Almost half (49%) of fee for 
service plans provide no coverage of any of the five most common 
prescription contraceptives. While health maintenance organizations 
(HMOs) have a better record, only 39% routinely cover all five of the 
most common methods.
    I have had patients who had to save up for months to pay for their 
Norplant removal because their insurance companies claimed they didn't 
pay for its insertion, so they would not pay for its removal. Perfect 
candidates for JUDs were unable to pay the upfront costs and settled 
for significantly less effective methods, such as condoms. If a woman 
cannot afford an IUD, she certainly cannot afford a pregnancy!
    Over the last 16 years, I've helped thousands of women choose the 
birth control method that is light for them, and I can tell you that 
men and women really do need an extensive menu of options for 
contraception to meet their particular needs. Lack of appropriate 
contraceptive choices is one of the greatest barriers to effective 
contraceptive use.
    Fortunately, there are several distinctly different types of FDA-
approved contraceptive methods and newer methods on the horizon, each 
designed to suit specific aspects of women's health needs. Women must 
not be limited from choosing the best method because of insurers' 
arbitrary coverage decisions.
    Biologically, most women can become pregnant for nearly forty years 
of their lives. Without contraception, the average woman could become 
pregnant more than twelve times, a prospect that is unacceptable to 
most women and would place a woman's and her children's health at 
unnecessary risk. Women cannot simply opt out of the need to control 
their fertility for three or more decades. Sexual expression is 
obviously an important part of the human experience, or there would not 
be such interest in Viagra. Access to contraception provides women the 
opportunity to choose the number as well as the timing of their 
pregnancies, and to protect their health.
    I can assure you that we will be most successful in reducing 
unintended pregnancy when women can obtain the particular contraceptive 
that best meets their needs and when they have full access to 
contraceptive counseling that teaches them how to use their method 
correctly and consistently.
    Allow me to briefly discuss the major public health reasons for 
ensuring that women have access to contraception.
    Contraception prevents unintended pregnancies and abortions. Of all 
industrialized nations, the United States has the highest rate of 
unintended pregnancies. Every year, approximately fifty percent of all 
pregnancies in the United States are unintended and 50% of these 
pregnancies are terminated.
    The consequences of unintended pregnancy are serious and impose 
tremendous burdens on women and their families. Women who did not 
intend to become pregnant are more likely to delay seeking early 
prenatal care and more likely to expose the fetus to poor nutrition and 
harmful substances. Pregnancy planning and preconceptual preparation 
are key to optimal pregnancy outcomes. Children from unwanted 
pregnancies are at greater
    risk of poor birth outcomes (e.g. congenital defects, low birth 
weight, prematurity), abuse, and of not receiving sufficient resources 
for healthy development. The parents may suffer greater economic 
hardship.
    Contraceptive coverage would place birth control within the 
financial reach of more American women. An Institute of Medicine (IOM) 
Committee Report on Unintended Pregnancy in 1995 concluded that one of 
the reasons for the high rates of unintended pregnancy in the United 
States was the failure of private health insurance to cover 
contraceptives and recommended increasing the number of health 
insurance policies that cover contraceptive services and supplies. The 
IOM report also highlighted the need for appropriate contraceptive 
counseling, in conjunction with contraceptive use in order to reduce 
the number of unintended pregnancies.
    Contraception saves and improves babies' lives. Effective family 
planning has also been positively correlated with a reduction in infant 
mortality. The National Commission to Prevent Infant Mortality 
estimated that 10 percent of infant deaths could be prevented if all 
pregnancies were planned.
    A study published in the February 1999, New England Journal of 
Medicine concluded that pregnancy spacing of 18-23 months dramatically 
lowered the risks of low birth weight and preterm birth. Contraception 
gives women an opportunity to prepare for pregnancy instead of having 
it happen accidentally. Women who take folic acid before they conceive 
reduce the risk of neural tube defects in their babies by 50%. Diabetic 
women who change their medications before they become pregnant decrease 
their baby's risk of major congenital defects from 9% to 1%.
    Contraception allows women with serious medical conditions to 
control their fertility. Pregnancy can be life threatening for women 
with serious medical conditions such as heart disease, diabetes, lupus, 
and high blood pressure. For these women, contraception can be life 
saving. It can help them prevent pregnancy altogether, or it can help 
these women postpone pregnancy until they are healthy enough to support 
a pregnancy.
    Contraception improves maternal health. Family planning is critical 
to improved maternal health by allowing women to space the number and 
timing of their pregnancies. Studies also show that women who conceive 
within six months following childbirth increase the risk of pregnancy 
complications. According to the November 2000 British Medical Journal, 
``women who became pregnant less than six months after their previous 
pregnancy were 70% more likely to have membranes rupture prematurely 
and had a 30% higher risk of other complications.''
    Contraception aids in the prevention and treatment of sexually 
transmitted diseases (STDs): Access to contraceptive-related health 
services increases the likelihood that the estimated 15 million 
Americans who contract sexually transmitted infections each year will 
be diagnosed and treated. Access to contraceptive-related health 
services enables sexually active individuals to receive prevention 
counseling and appropriate medical tests from their health care 
professional.
    Contraception is cost effective. Studies in my own state of 
California demonstrated that for every dollar invested in family 
planning, over $14 is saved. The more effective birth control methods 
are the most cost effective. For example, every copper IUD placed saves 
the health care system (and society) over $14,000 within 5 years. 
However, due to rapid turnover of insured individuals, each individual 
insurance company will not reap those economic benefits until all 
companies are required to play by the same rules and cover all 
prescription methods.
                               conclusion
    In response to strong public support, 16 states have enacted laws 
requiring prescription equity similar to EPICC. In addition, a federal 
court in Washington State concluded that an employer's failure to 
provide contraceptive coverage ``to the same extent and on the same 
terms'' as it provides coverage for other prescription drugs 
constitutes illegal sex discrimination under Title VII of the Civil 
Rights Act of 1964.
    However, even if all the states were to pass laws, and more 
employees had the courage to stand up in court for their rights, 
federal legislation would still be necessary. As you are aware, there 
are many families who are not protected by state provisions because 
employers insure them in federally governed (ERISA) plans. And we 
should not continue an inequity that forces individuals to sue in 
court. The only way to help the millions of woman and families 
throughout the country who are covered by such plans is to pass federal 
legislation that uniformly applies to all insurers.
    As long as insurers continue to exclude contraceptive coverage and 
services from their plans, it is clear that the needs of women will not 
be addressed adequately. Contraceptive coverage is a basic health need, 
just as is coverage for diabetes and high blood pressure treatments. 
Federal legislation is critical. ACOG supports S. 104 and urges Members 
of the Committee to support this important legislation.
    I thank the Chair and this Committee for holding this hearing today 
and for allowing me the opportunity to testify. S. 104 is important to 
our nation's women and families.
                  Prepared Statement of Kate Sullivan
                              introduction
    Good afternoon. My name is Kate Sullivan, and I am Director of 
Health Care Policy for the U.S. Chamber of Commerce. The Chamber is the 
world's largest business federation, representing more than three 
million businesses of every size, sector and region. I appreciate the 
opportunity to present the views of employers who voluntarily provide 
health care benefits to more than 172 million Americans.
                         overview of testimony
    1. Job-based health insurance costs this year increased at their 
highest rate in nearly a decade, represent the fifth straight year of 
health care inflation and hit small businesses the hardest.
    1. Further increasing the cost of health coverage by imposing 
mandates jeopardizes the availability and affordability of plans for 
both employers and working families, leaving more people uninsured not 
only for predictable, comparatively nominal health care goods and 
services but also for unexpected, major medical events.
    1. The U.S. Chamber of Commerce opposes any and all health plan 
mandates regardless of merit because they directly raise the cost of 
health plans, limit employers' ability to tailor benefits according to 
workforce need and demand, and stifle health plans' efforts to provide 
consumers with a variety of choices and the ability to select the 
benefits most appropriate for their personal situations.
    1. As currently drafted, S. 104 poses quality concerns for health 
plans, expands the likelihood of malpractice liability and requires 
that health plans favor contraceptive coverage over other benefits.
                    evolution of health plan design
    Nine out of every ten people with private health coverage in the 
United States are insured through an employer-sponsored health plan. 
For decades, employers have voluntarily provided health benefits that 
were designed to meet the health and financial needs of their 
workforces and dependents. The availability of employer-provided 
coverage helps ensure a healthy and productive workforce and alleviates 
the distraction of financial worry for employees. As employees' needs 
and wants change, often so do their benefit plans, and as new medical 
treatment and innovation become available, health plans adapt to 
finance these advances while continuing to meet enrollees' needs.
    Employer health plans for many years were typically indemnity or 
fee-for-service plans covering treatment for illness or injury but not 
routine or preventive care. These plans feature a deductible that 
patients meet before the plan begins sharing payment, and the patient 
then pays a percentage (not a flat dollar amount) of total charges 
above and beyond the deductible. Later, larger employers that could 
offer employees a choice of health plans (most small employers don't 
have the ability to do so) often gave employees the option of receiving 
through an HMO or PPO preventive and routine benefits that the 
company's traditional plan did not cover.
    By offering enrollees prepaid coverage for preventive services, 
managed care alternatives to traditional fee-for-service plans quickly 
became popular because of the low cost to participants. These plans 
usually cover routine services without requiring the patient to first 
satisfy a deductible, and doctor visits and prescriptions are often 
covered at no cost or for a nominal, fixed dollar amount. Young, 
healthy workers in particular have been attracted to managed care 
because their few health care needs each year were often covered for 
little or no cost out of their own pockets. However, while these plans 
often readily pay for routine costs, they scrutinize unanticipated, 
costly claims more closely. Plans--and the employers who pay the bulk 
of their cost cannot afford to cover both up-front and back-end health 
care costs and still keep premiums and cost-sharing affordable for 
participants.
    As health plan costs rise and employers are restricted in their 
ability to sponsor managed care alternatives because of so-called 
``patients' rights'' laws, many employers are turning to--or returning 
to--indemnity health plans that ensure coverage for unexpected and 
costly health needs, in combination with a tax-favored health care 
spending account that make funds available up-front to meet deductible 
and coinsurance requirements. These health care spending accounts also 
are frequently used to pay for items and services outside the plan's 
scope of coverage but that the participant knows will be needed 
throughout the year. This evolving trend encourages health care 
consumers to plan for the health costs they anticipate and returns 
health coverage to the more traditional notion of ``insurance''--that 
is, insuring unanticipated health care events that can financially 
devastate an uninsured patient.
                        health plan cost trends
    Health plan costs have risen sharply in recent years and are the 
direct result of state legislatures' mandates on insured health plans 
offered by employers, as well as the impact of HIPAA and other federal 
mandates enacted by the U.S. Congress. Health plan costs are also 
rising due to greater drug utilization, hospital costs that have been 
shifted to employers due to insufficient Medicare and Medicaid 
reimbursement, and employers' response to consumer preference and 
provider demand for more open, flexible service networks and fewer 
coverage limitations.
    The 2001 annual survey of employer health benefits released last 
week by the Kaiser Family Foundation and the Health Research and 
Educational Trust reported that job-based health insurance costs 
increased by 11.0 percent from the spring of 2000 to the spring of 
2001, the highest increase since 1992 and the fifth straight year of 
health care inflation. These rate increases translate to per-employee 
health plan costs of $2,650 a year for single coverage ($221 per 
month), and $7,053 a year for family coverage ($588 per month). Small 
employers were once again the hardest hit, reporting health plan 
inflation rates of 14.4 percent (10 to 24 employees) and 16.5 percent 
(3 to 9 employees).
    Employers have absorbed much of the rising cost because the healthy 
economy brought in more revenue to pay these expenses and the tight 
labor market made the need for comprehensive, low-cost benefits 
packages an imperative in order to attract and retain employees. 
Employers assumed greater responsibility for plan premiums from 1993 to 
2001 (paying 68 percent of family coverage in 1993 and 73 percent in 
2001), but rising costs have increased employees' average monthly 
contributions from $124 to $150 over the same period (Kaiser Family 
Foundation/Health Research and Education Trust 2001 Annual Survey).
    However, the last year has been a wake-up call to both employers 
and employees. Health plan costs this year increased at their greatest 
rate in nearly ten years, and the anemic economy makes absorbing these 
costs far more difficult. When employers can no longer keep up with the 
rising cost of their health plans, they increase employee cost-sharing 
in the form of bigger monthly premiums, larger co-payments for doctor 
visits and prescription drugs, and higher out-of-pocket payments toward 
the deductible and coinsurance. Among large employers (200 or more 
employees), 75 percent are likely to increase employee costs next year, 
and 42 percent of smaller employers expect to do so (Kaiser Family 
Foundation/Health Research and Education Trust 2001 Annual Survey).
            the link between rising costs and the uninsured
    Until this year's economic downturn, employer health coverage had 
been steadily expanding as more Americans were working and more small 
employers offered health benefits in order to attract and retain 
employees. In 1998, 54 percent of small firms (3 to 199 employees) 
offered health benefits, rising to 67 percent in 2000 before dropping 
this year to 65 percent (Kaiser Family Foundation and Health Research 
and Educational Trust, 2001 Annual Survey).
    However, even as employer coverage has been expanding in recent 
years, the number of employees turning down their employers' offer of 
coverage has been steadily increasing. In many cases, the employee is 
covered elsewhere (through a spouse, parent a government program), but 
26 percent--one out of four--employees who decline coverage are 
uninsured. When asked, 20 percent of those turning down the offer of 
health coverage state that it was just too costly to participate 
(Employee Benefits Research Institute, September 1999).
    Furthermore, women already face barriers in accessing affordable 
health coverage because of their work and income status. A Commonwealth 
Fund study last month reported that younger women are far more likely 
to be uninsured than older women. Twenty-three percent of women between 
the ages of 19 and 34 are uninsured, compared with 15 percent of women 
between the ages of 35 and 44, 14 percent of women ages 45 to 54, and 
16 percent of women ages 55 to 64 (Commonwealth Fund Task Force on the 
Future of Health Insurance, analysis of March 2000 Current Population 
Survey).
    Increasing the cost of health coverage by imposing mandates 
jeopardizes the availability and affordability of plans for both 
employers and employees. So while some women may gain coverage for 
their contraceptive needs, other women may lose their coverage entirely 
and remain uninsured when they are accidentally injured, require 
surgery or experience a major illness.
           the pitfalls of ``average'' cost impact estimates
    Many who support S. 104 argue that because it will result--we would 
say ``may result''--in only a fractional increase in health plan 
premiums, that it is penny-wise and pound-foolish for the business 
community to oppose this legislation. We urge you to keep in mind that 
projected cost increases are only averages, and the impact on any given 
employer depends on what the plan already covers and the likelihood of 
that particular employer group's members availing themselves of the new 
benefit.
    Furthermore, cost impact estimates include those employers who 
already cover the item or service under consideration; for them, there 
is no cost increase so long as their plan already fully complies with 
the mandate. However, employers whose plans depart in any way from the 
strictures of the mandate, only partially cover the benefit, or do not 
cover it at all, will see their health plan costs increase several 
times the widely touted ``nominal'' cost of the new mandate.
mandates limit choice, raise costs, disproportionately impact employers
    Government mandates handed down by the federal and state 
legislatures have forced health plans of all types--indemnity, PPO, 
HMO, point-of-service--to look more like one another, diminishing the 
ability of plans to compete for customers based on consumers' needs and 
preferences. Mandates have also increased health plan costs, and 
surveys of employer health plan costs underscore the effect of state 
mandates on employers' insured health plans.
    Compared to the rate of inflation for self-insured plans under 
ERISA, costs for fully insured health plans, which must comply with 
state mandates, rose 37.1 percent from 1998-2001, while self-insured 
health plan costs rose 24.8 percent over the same period (Kaiser Family 
Foundation/Health Research and Educational Trust, 2001 Annual Survey). 
Moreover, mandated contraceptive coverage is not the only government 
mandate the Senate is considering this year. Last month, this committee 
approved a broad expansion of the current mental health parity mandate 
that will increase premiums an average of 0.9 percent. At the end of 
June, the full Senate passed managed care reform legislation--replete 
with numerous mandates--that will increase premiums an average of 4.0 
percent.
    Pausing barely long enough to catch one's breath, this committee is 
now preparing to further increase health plan costs. The total average 
impact of these mandates will equal more than half the average 11 
percent increase in health plan costs this year without these new 
requirements. And again, for a good portion of employers, the impact on 
their health plans will certainly exceed those ``nominal'' average 
estimates several times over.
    Finally, employers have not even begun receiving the bill from 
their health plans for the cost of complying with the new ERISA claims 
procedure regulations, costs associated with provider and carrier 
compliance with medical privacy regulations, and the cost of abiding by 
administrative simplification requirements imposed by HIPAA. Clearly, 
there is no end in sight to the current rise in health plan costs, and 
this is before we begin paying for the rising cost medical services 
themselves.
comments specific to s. 104, the ``equity in prescription insurance and 
                      contraceptive coverage act''
    Like any and all legislation imposing a mandate on the private 
health plans that employers voluntarily offer and finance, the U.S. 
Chamber of Commerce opposes S. 104 and its mandate that employers cover 
contraceptive coverage. The Chamber opposes mandates because they 
directly raise the cost of health plans, limit employers' ability to 
tailor benefits according to workforce need and demand, and stifle 
health plans' efforts to provide consumers with a variety of choices 
and the ability to select the benefits most appropriate for their 
personal situations. We make no distinction in our opposition to 
mandates on the basis of cost, popularity of the benefit, potential 
indirect benefit to the company, widespread coverage already by 
employers, or regard for the legislators who support the proposal: The 
Chamber is an equal opportunity organization when it comes to just 
saying ``No.''
    Apart from our stated opposition to any government mandate that 
raises the cost of health coverage and results in more uninsured 
people, the Chamber has particular concerns with S. 104.
    Inequity of Coverage. While purporting to put contraceptive 
services and devices on the same footing as other health benefits, S. 
104 requires plans to cover prescriptions, outpatient services and 
devices at no greater cost than ``any other drug'' or ``any other 
outpatient service.'' If a plan covers childhood immunizations at no 
cost in order to provide the greatest incentive possible to immunize 
children, or provides free mammograms during October as part of a 
breast cancer awareness campaign, contraceptive services and 
prescriptions would have to be covered on the same basis. In essence, 
the bill mandates that contraceptive coverage be covered at the most 
generous level of cost sharing for any other service.
    Quality Concerns. The bill creates serious quality concerns by 
prohibiting a plan from denying coverage or conducting any utilization 
review based on quality. A plan could not deny coverage if the 
prescribed drug, device or service puts the patient at serious medical 
risk because of contraindicated age, weight, behavior or other risk 
factors.
    Malpractice Liability. The bill increases the threat of malpractice 
liability and poor quality by prohibiting a plan from specifying the 
type of provider who can prescribe contraception. For example, a plan 
could not deny coverage if an optometrist were to prescribe an IUD.
    No Conscience Clause. Faith-based employers would be required to 
provide coverage for services that conflict with religious teachings 
and doctrine. The Congress has long provided such ``conscience 
clauses'' protecting against the mandatory provision of services deemed 
objectionable to Catholic and other faith-based employers. Managed care 
legislation recently passed by both the U.S. Senate and House of 
Representatives includes an exclusion clause that would ensure faith-
based health plans are free to act in a manner consistent with their 
religious beliefs, and the current contraceptive coverage mandate in 
the Federal Employee Health Benefits Program similarly contains such an 
exemption.
                               conclusion
    The Chamber understands and appreciates the sponsors good 
intentions with this bill, but many a well-intentioned public policy 
has had unintended consequences. The Congress is tackling the wrong 
issue. One out of six people in this country are uninsured. Not only do 
they not have contraceptive coverage, they are uninsured in the event 
of childbirth, a trip to the emergency room or a diagnosis of cancer.
    Rather than enrich the benefits that some already have, the 
Congress needs to rein in its penchant for mandates, halt duplicative 
regulation that raise health system costs and act immediately to create 
new options for private health coverage and new ways to pay for it. 
Women who desire more comprehensive coverage for contraception are in 
danger of losing their health benefits altogether because costs are 
rising for their companies and themselves, and insurers are withdrawing 
from the market leaving consumers with fewer alternatives. The prospect 
of being held liable for unlimited damages in both federal and state 
court for the actions of health plans they voluntarily sponsor is 
causing employers to further rethink the wisdom of taking on such risk. 
Bit by bit, mandate on top of regulation on top of more liability, 
lawmakers threaten the health and economic security of hard-working 
Americans.
              Prepared Statement of Marcia D. Greenberger
    My name is Marcia Greenberger, and I appreciate your invitation to 
testify today. I am Co-President of the National Women's Law Center, 
which since 1972 has been at the forefront of virtually every major 
effort to secure and defend women's legal rights. I am pleased to have 
this opportunity to testify about insurance coverage of contraception 
and the importance of the Equity in Prescription Insurance and 
Contraceptive Coverage Act (EPICC).
    The Center's involvement in pregnancy-related discrimination--which 
is at the heart of the issue before the committee today--dates back to 
the Center's beginning in 1972 and our participation in the litigation 
and subsequent legislative action that led to enactment of the 
Pregnancy Discrimination Act in 1978. It now includes the Erickson v. 
Bartell Drug Co. contraceptive coverage case, in which the Center is 
honored to be serving as part of the legal team representing Jennifer 
Erickson and the other women in the plaintiff class. Because the Center 
brings to this work a dual perspective as a longstanding advocate both 
for women's health and reproductive rights and for equal opportunities 
for women in all facets of American life, my testimony will cover the 
importance of contraceptive coverage both as a matter of women's health 
and as a matter of women's equal rights, and will include some 
historical and legal background.
        i. contraception is part of basic health care for women
    Access to reliable contraception is essential to women's health, 
and the failure of insurers to cover it has far-reaching consequences 
for the health of women and the health of their children. The court in 
Erickson v. Bartell Drug. Co., 141 F.Supp.2d 1266 (W.D.Wash. 2001), got 
it exactly right in its June 2001 decision when it said, ``the 
exclusion of prescription contraceptives creates a gaping hole in the 
coverage offered to female employees, leaving a fundamental and 
immediate healthcare need uncovered.''
    Pregnancy prevention is central to good health care for women. Most 
women have the biological potential for pregnancy for over 30 years of 
their lives, and for approximately three-quarters of her reproductive 
life, the average woman is trying to postpone or avoid pregnancy. Over 
half of pregnancies in the United States are unintended. Access to 
contraception is critical to preventing unwanted pregnancies (and thus 
also to reducing the number of abortions), and to enabling women to 
control the timing and spacing of their pregnancies, which in turn 
reduces the incidence of maternal morbidity, low birth weight babies, 
and infant mortality.
    Despite the importance of contraception to women's health, private 
health insurance has failed to provide adequate coverage of 
prescription contraceptive drugs and devices and related services. 
Almost half of all fee-for-service large-group plans (those covering 
over 100 employees) do not cover any form of contraception at all, and 
only one-third cover oral contraceptives, the most commonly used form 
of reversible contraceptive in the United States. Although managed care 
plans typically provide better coverage than traditional fee-for-
service plans, only 39% of HMOs routinely cover the five methods of 
reversible contraception. Only 49% of large-group plans and 39% of 
small-group plans cover outpatient annual exams--which are essential 
for women using prescription contraceptive drugs or devices. Before 
Congress mandated contraceptive coverage for federal employees, 81% of 
the plans in the Federal Employees Health Benefits Program (FEHBP) did 
not cover all five reversible methods of contraception, and 10% of the 
plans did not cover any of these methods. The failure of private 
insurance plans to cover contraceptives is even more glaring when one 
considers that 97% of traditional fee-for-service plans cover other 
prescription drugs.
    Women who do not have health insurance coverage for contraception, 
but who nonetheless wish to avoid pregnancy, are often forced to use a 
less expensive, but also less effective, method of contraception. A 
woman without insurance coverage also may not be able to afford to use 
the contraceptive method that is most appropriate for her medical and 
personal circumstances. For example, an IUD or implant may be the most 
appropriate form of contraception for some women (for example, where 
oral contraceptives are contraindicated for medical reasons), but these 
devices have the highest initial cost and therefore can be the hardest 
to pay for out-of-pocket.
    Moreover, some insurance plans do not cover oral contraceptives 
even when they are prescribed for health reasons other than birth 
control--for example, for medical conditions like dysmenorrhea and pre-
menstrual syndrome, or to help prevent ovarian cancer. Thus, in 
addition to the dangers to women's health presented by the failure of 
insurance to cover pregnancy prevention, the exclusion of contraception 
from insurance coverage causes other harmful consequences for women's 
health.
  ii. insurance coverage of contraceptives is a matter of equity for 
                                 women
    Not only is pregnancy a condition that is unique to women, but the 
only forms of prescription contraception available today are 
exclusively for women (oral contraceptives, injections like Depo 
Provera and Lunelle, implants like Norplant, IUDs, and barrier methods 
like the diaphragm and cervical cap). Thus, the exclusion of 
prescription contraceptives from health insurance coverage unfairly 
disadvantages women by singling out for unfavorable treatment a health 
insurance need that only women have. Failure to cover contraception 
forces women to bear higher health care costs to avoid pregnancy, and 
exposes women to the unique physical, economic and emotional 
consequences that can result from unintended pregnancy.
    The most immediate economic consequence for women is the out-of-
pocket cost of paying for contraception. American women spend about 68 
percent more than men in out-of-pocket health care costs, and much of 
this disparity can be attributed to the lack of adequate coverage of 
reproductive health services. Such costs make up one-third of all 
health care costs for women under private health insurance policies. 
Moreover, when effective contraception is not used, it is women who 
bear the risk of unwanted pregnancy. When unintended pregnancy results, 
it is women who incur the attendant physical burdens and medical risks 
of pregnancy, women who disproportionately bear the health care costs 
of pregnancy and childbirth, and women who often face barriers to 
employment and educational opportunities as a result of pregnancy, even 
today despite the fact that the law clearly prohibits this form of 
discrimination in the workplace and in educational institutions.
    In short, forcing women to pay out of pocket to cover their 
contraceptive needs is both harmful to their health and manifestly 
unfair. It is no wonder that when many insurance plans agreed to 
covered Viagra as soon as it received FDA approval--while continuing to 
exclude prescription contraception--an outcry ensued.
  iii. many employers are obligated to provide contraceptive coverage 
      under the laws prohibiting sex discrimination in employment
    Women's ability to receive the contraceptive insurance coverage 
they need has advanced significantly with two recent interpretations of 
the federal civil rights laws, one by the Equal Employment Opportunity 
Commission and one by a federal court. Both held that it is unlawful 
sex discrimination in the workplace under Title VII of the Civil Rights 
Act of 1964, and specifically the Pregnancy Discrimination Act of 1978 
(PDA) that is incorporated in Title VII, for an employer covered by 
Title VII to exclude prescription contraceptive drugs and devices and 
related services from a health insurance plan provided to its 
employees, when the plan covers other prescription drugs and devices 
and preventive care generally.
    Title VII prohibits all private employers with at least 15 
employees, and public employers as well, from discriminating on the 
basis of sex in the terms and conditions of employment, including in 
fringe benefits. And Congress made explicit, when enacting the PDA as 
an amendment to Title VII, that pregnancy-related discrimination 
constitutes illegal discrimination on the basis of sex in all terms and 
conditions of employment, including employer-provided insurance. This 
legislation explicitly overruled the Supreme Court's decision in 
General Electric Co. v. Gilbert, 429 U.S. 125 (1976), which had held 
that an otherwise comprehensive short-term disability policy that 
excluded pregnancy-related disabilities from coverage did not 
discriminate on the basis of sex in violation of Title VII.
    Based on Title VII, and specifically the PDA, both the EEOC and the 
Erickson federal court have underscored that an employer who singles 
out pregnancy-related health care--including contraception--for 
disadvantageous treatment in an employee health benefits plan is 
committing unlawful sex discrimination. In December 2000, the EEOC 
issued a formal statement of Commission policy holding that Title VII 
prohibits employers from excluding prescription contraceptive coverage 
from an employee health plan that otherwise covers prescription drugs 
and devices generally as well as a wide range of other preventive 
health care. The Commission reasoned that Title VII's ``prohibition on 
discrimination against women based on their ability to become pregnant 
. . . necessarily includes a prohibition on discrimination related to a 
woman's use of contraceptives.'' According to the EEOC, this means that 
employers must cover the expenses of prescription contraceptives and 
related medical services to the same extent and on the same terms that 
they cover the expenses of other drugs, devices and preventative 
services. As the federal agency charged with administering and 
enforcing Title VII, the EEOC's interpretation of the law is 
authoritative and entitled to substantial deference. And both Attorney 
General John Ashcroft and EEOC Chair Cari Dominguez have stated that 
they will uphold this ruling.
    The EEOC's ruling was followed by the decision in Erickson v. 
Bartell Drug Co. in June of this year, in which the U.S. District Court 
for the Western District of Washington found that the defendant's 
exclusion of prescription contraceptives from its otherwise 
comprehensive employee health benefits plan constitutes a violation of 
Title VII The court's decision, granting summary judgment to Jennifer 
Erickson and the plaintiff class she represents, was the first one ever 
to rule definitively on the merits of this issue--although two other 
courts have also recently ruled in favor of the plaintiffs in similar 
cases, denying the defendants' motions to dismiss and allowing the 
cases to proceed. In the Erickson decision, the court carefully 
reviewed the legislative history of Title VII and the PDA, relevant 
precedents, the EEOC Decision, and each of the arguments presented by 
the Defendant. The court concluded:
    Bartell's exclusion of prescription contraception from its 
prescription plan is inconsistent with the requirements of federal law. 
The PDA is not a begrudging recognition of a limited grant of rights to 
a strictly defined group of women who happen to be pregnant. Read in 
the context of Title VII as a whole, it is a broad acknowledgment of 
the intent of Congress to outlaw any and all discrimination against any 
and all women in the terms and conditions of their employment, 
including the benefits an employer provides to its employees. Male and 
female employees have different, sex-based disability and healthcare 
needs, and the law is no longer blind to the fact that only women can 
get pregnant, bear children, or use prescription contraception.
    On this basis, the court ordered Bartell Drug Co., the defendant, 
to cover each of the available options for prescription contraception 
to the same extent, and on the same terms, that it covers other drugs, 
devices, and preventive care for its employees, as well as all 
contraception-related outpatient services. Bartell has subsequently 
notified its employees that these drugs, devices, and services are now 
covered.
    As a result of the EEOC and court rulings, all employers covered by 
Title VII are now on notice of their legal obligation to include 
coverage of prescription contraceptives if they are providing health 
insurance to their employees that otherwise covers prescription drugs 
and devices and preventive care. We are pleased that some have 
responded on their own by promptly adding this coverage to their 
employee health plans. Other employers have added contraceptive 
coverage after being pressed to do so by their employees. For example, 
this past April, after several female faculty and staff members at the 
University of Nebraska urged the university administration to add 
contraceptive coverage--with legal assistance from the National Women's 
Law Center--the university Regents agreed.
    To help other employees across the country in their efforts to 
secure the contraceptive coverage to which they are entitled, the 
Center has published a free pamphlet, Take Action: Get Your 
Prescription Contraceptives Covered, A Practical Guide for Employees, 
and has launched a new web page on which this pamphlet and other 
helpful information are available. We are hopeful that, especially as 
employees learn about their rights and press their case with their 
employers, more and more employers across the country will add 
contraceptive coverage to their employee health benefits, and obviate 
the need for more lawsuits like Jennifer Erickson's.
                        iv. why epicc is needed
    Although the Title VII rulings represent significant progress for 
the employer-provided plans covered by Title VII, enactment of the 
Equity in Prescription Insurance and Contraceptive Coverage Act (EPICC) 
is critical to ensuring that all health plans that provide coverage of 
prescription drugs include the same level of coverage for FDA-approved 
prescription contraceptives, as well as coverage for outpatient 
contraceptive services. EPICC does not require special treatment of 
contraceptives--only equitable treatment within the context of an 
existing prescription drug benefit. Because the vast majority of 
insurance plans cover prescription drugs, a large majority of insured 
women are expected to benefit from the expanded access to contraceptive 
coverage that EPICC will produce.
    EPICC will extend protection beyond that provided by Title VII. It 
will cover plans not provided by an employer to its employees, such as 
non-employment group and individual plans, and those employer plans not 
covered by Title VII Millions of women receive their insurance from a 
source not covered by Title VII. An estimated 16 million Americans 
obtain health insurance from private insurance other than employer-
provided plans. This includes people who are self-employed; those 
employed by employers who offer no health insurance; part-time, 
temporary, and contract workers; early retirees too young for Medicare; 
and unemployed or disabled people not eligible for public insurance. 
Women are disproportionately represented in several of these 
categories, such as part-time, temporary, and contract workers. 
Moreover, not everyone who receives health insurance through an 
employer is protected by Title VII, which applies only to employers 
with 15 or more employees--this is less than a fifth of all U.S. 
employers, and some 14 million workers are employed by entities that 
fall beneath this threshold.
    We know from the unfortunate experience with maternity coverage 
after passage of the PDA that it is critical to guarantee coverage for 
women who do not receive their health insurance through their 
employers. Before the PDA's enactment, private health insurance often 
did not include maternity care--basic prenatal and delivery services--
in their standard policies. Following passage of the PDA, which made 
clear that employers covered by Title VII could not single out for 
exclusion from an employee health plan the medical expenses related to 
pregnancy and childbirth, insurers began to include maternity benefits 
in their standard benefit package for employer-sponsored plans because 
their customers, the employers, were legally obligated to provide that 
benefit. But, because there is no legal mandate to do so, insurers do 
not always include maternity benefits in their standard benefits 
package for individuals or others not covered through an employer. 
There is every reason to believe that insurers will respond in a 
similar way to contraceptive coverage, thereby underscoring the 
importance of EPICC.
    State experience reinforces the wisdom of EPICC s approach. Sixteen 
states have passed new laws requiring health plans that cover 
prescription drugs to cover prescription contraceptives. Their passage 
confirms the growing recognition of the importance of this issue, and 
the appropriateness of this approach. But women's access to this basic 
benefit should not depend on where they live.
              v. contraceptive coverage is cost-effective
    As is true for other key forms of preventive health care, coverage 
of contraceptives can actually save money. For every dollar spent to 
provide publicly funded contraceptive services, an average of $3.00 is 
saved just in Medicaid costs for pregnancy-related health care and 
medical care for newborns. And, studies by business groups and employer 
consultants have concluded that employers can save money by including 
contraceptive coverage in their employee health plans, thereby reducing 
unintended pregnancies and their associated costs, as well as promoting 
maternal and child health. For example, the Washington Business Group 
on Health, an organization that represents 160 national and 
multinational employers, has estimated that failing to provide 
contraceptive coverage could cost an employer at least 15% more than 
providing this coverage. Their report concluded, ``For health and 
financial reasons, employers concerned with providing both 
comprehensive and cost-effective health benefits ought to consider 
ensuring that they are covering the full range of contraceptive 
options.''
    Moreover, any direct premium costs to an employer who adds 
contraceptive coverage to its benefits plan are at most extremely 
modest, and likely to be nonexistent. The concrete experience of the 
Federal Employees Health Benefits Program (FEHBP) is most instructive. 
It showed that adding contraceptive coverage to the FEHBP caused no 
increase in the federal government's premium costs. When the FEHBP 
contraceptive coverage requirement was implemented, the Office of 
Personnel Management (OPM), which administers the program, arranged 
with the health carriers to adjust the 1999 premiums in 2000 to reflect 
any increased insurance costs due to the addition of contraceptive 
coverage. However, no such adjustment was necessary, and OPM reported 
that ``there was no cost increase due to contraceptive coverage.'' 
OPM's letter is attached to my testimony. Another study found that on 
average, it costs a private employer only an additional $1.43 per month 
per employee to add coverage for the full range of FDA-approved 
reversible contraceptives.
    Of course, even if the cost of contraceptive coverage were 
substantial--which, as shown, it most assuredly is not--such costs 
could not justify shortchanging women or sacrificing their health. It 
would be unthinkable to exclude insurance coverage for heart disease or 
many other conditions that can lead to expensive health care because of 
cost. Cost is never recognized as a defense to discrimination, as both 
the EEOC and the court in Erickson noted, and it should not be used as 
a reason--let alone an unsupported assertion, as would be the case 
here--to penalize women.
   vi. there is widespread public support for contraceptive coverage
    Not surprisingly, there is broad public support for laws requiring 
contraceptive coverage. One recent poll conducted this June found that 
77% of Americans support laws requiring health insurance plans to cover 
prescription contraception. This support has been steady. A 1998 Kaiser 
Family Foundation poll found that 75% of Americans believe 
contraception should be covered by insurers even if such coverage added 
to the cost. This broad public support is also reflected in the growing 
number of states that have enacted legislation requiring all health 
insurance plans to cover prescription contraceptives, and the fact that 
in many additional states such legislation is now pending. And, of 
course, the federal government has also recognized the importance of 
this benefit by providing it to federal employees.
                               conclusion
    Unless Congress acts, women will not have the contraceptive 
insurance coverage that they need and deserve. EPICC would provide that 
coverage, and represents a major step forward for women's health. Thank 
you.
                       Statement of Wendy Wright
    Equity in Prescription Insurance and Contraceptive Coverage Act of 
2001 (EPICC) would force private insurers that provide a prescription 
drug plan to include coverage of all FDA-approved contraceptives. This 
bill, establishing the first-ever nationally mandated benefit in health 
insurance, is unnecessary, both from consumer and societal aspects. It 
is a precarious step that would result in some employees being denied 
full, or other, needed prescription benefits due to increased costs. It 
would place employers in the untenable position of either not offering 
any prescription plans, or violating their and their employees' 
consciences. Adding cost, not value, to health insurance to cover drugs 
and devices, which do not address a disease or illness, is a 
prescription for harming the poorest of employees.
    Extensive mandates in the states is one of the factors contributing 
to excessive insurance costs and the inability to obtain insurance. 
Mandated benefits tend, in general, to inflate the cost of health 
insurance by forcing everyone to purchase that which only a minority 
wants. As the first nationally mandated benefit, EPICC would provoke a 
demand for further mandates as each health-care interest group pushes 
to have its particular benefit required. It would be a grave mistake to 
begin at the national level the same process experimented upon and 
proven harmful at the state level.
    Contraceptives are one of the most heavily subsidized services in 
the entire health care field with, literally, billions of dollars 
annually appropriated by federal, state and local government agencies. 
All poor people and many non-poor have access to free or reduced 
contraceptive services. Therefore, the dependence on health insurance 
to provide this benefit is far less than with most other health 
benefits.
    Beyond government-provided contraceptives, numerous health plans 
cover various forms of contraceptives, which means employees already 
have a strong probability of obtaining such coverage in their health 
plan.
    Prescription contraceptives do not attend to any of the many kinds 
of diseases and illnesses that every person is at risk of contracting, 
and is of only potential interest to a minority of the workforce. Such 
factors as age, marital status, surgical sterilization, moral 
conviction, or personal preference for condoms eliminate two-thirds to 
three-fourths of the workforce from the universe of potential users of 
prescription methods of contraception.
    EPICC requires each plan to cover five different varieties of 
prescription contraceptive, even though consumers would not use more 
than one. The annual cost per patient of these benefits is estimated at 
approximately $300 to $400. If approximately one-fourth to one-third of 
the workforce takes advantage of this benefit, then the increase in 
premiums for all families will be in the order of magnitude of roughly 
$ 100; or to put it another way, employees who are not potential users 
of prescription contraceptives and their families will be contributing 
about $ 100 a year to purchase contraceptives for the minority of their 
colleagues who choose to take advantage of this benefit.
    Now, it could be argued that the very essence of insurance is 
pooled risk, and this is just another instance of that principle. After 
all, the employees who do not contract cancer pay through their 
insurance premiums for the very costly care of those who do.
    That principle does not really apply to this situation, however, 
because there is not really a shared risk As noted above, there are 
significant segments of the workforce, altogether totaling a solid 
majority, who are not and never will be among the future users of 
prescription contraceptives. Far from representing a shared risk/shared 
cost pool that follows the classic model of insurance, this scheme is 
an assessment imposed on one discrete group of workers to subsidize a 
preference of another group of workers.
    Preference is not an ill-chosen word in this context because the 
use of prescription contraceptives is a matter of discretionary 
personal preference rather than of medical necessity.
    This benefit is purely non-therapeutic, and hence discretionary. 
Contraception is not necessary as a therapy for any disease or 
disability, which is the rationale for some insurers in distinguishing 
between contraceptives and other prescription drugs or devices. 
Prescription contraception might best be described as preventive 
medicine, an option that might make health plans more attractive to 
many consumers and might even reduce overall health care costs in the 
long ran. Such coverage is analogous in this respect to coverage of 
vitamin supplements. Like contraceptives, vitamin supplements are not 
intended to cure any undesired conditions, but to prevent them. Like 
contraceptives, their use is discretionary. By contrast, however, 
vitamin supplements are not subsidized by government agencies; are not 
widely available in health insurance plans; and theoretically might be 
desired by everyone, not just a minority of the population, if they 
were not costly.
    It appears, then, that an even stronger case can be made for 
mandating coverage of vitamin supplements than of prescription 
contraceptives. But the same can be said for most health care services, 
especially for those that are therapeutically necessary.
    This is not an argument for excluding insurance coverage of 
prescription contraception, but rather an argument against mandating 
such coverage. Ideally, there should be no mandated benefits at all. 
Benefits should be negotiated to suit the preferences of the insured, 
and in many instances those preferences might include coverage of 
prescription contraceptives.
    But if the government is going to intrude into that negotiation and 
impose mandates, then the rational basis for determining which benefits 
shall be required in each and every insurance plan, regardless of the 
choices of the particular consumers, then the obvious criteria to apply 
would be:
    1) How widespread is the potential need for the benefit; 2) How 
expensive is the benefit if the consumer had to pay for it out of 
pocket; 3) How accessible are alternative sources of the benefit; and 
4) How urgent for the health and safety of the beneficiaries is the 
benefit.
    On each one of these criteria, prescription contraceptives rank 
very low. Indeed, it is difficult even to imagine a rational criterion 
under which mandating coverage of prescription contraceptives would be 
a high priority. And yet the legislation before us proposes to make 
this the one and only nationally mandated benefit in health insurance.
    Mandated benefits in the states have forced consumers to pay for 
benefits that may well be unwanted and unused, simply adding cost 
rather than value to health insurance plans. The right way to add value 
is to increase consumer choice. The more closely the health insurance 
approaches the ideal of an individual consumer choosing among a 
multiplicity of options, the more cost-efficient and consumer sensitive 
the system will be. Those consumers for whom contraceptive coverage is 
important can make that a key point in their purchasing decision. Those 
for whom it has little or no priority can disregard it as a factor. And 
those who, for reasons of moral conviction, consider it important not 
to pay for such a benefit in their health insurance still have the 
freedom to target their health care dollars in a manner compatible with 
their consciences--a freedom, by the way, that the legislation under 
consideration here would snuff out.
    The only reason any workers are not getting the benefits they want 
in their health insurance is that this market model does not prevail. 
Instead of consumer choice, most workers in the private sector are 
saddled with an inefficient employers' choice system, and in many 
states a lengthy list of mandated benefits--many of which are utterly 
useless to large numbers of workers--are added to the mix, simply 
running up the cost.
    The Federal Employee Health Benefit Program--at least until the 
first mandated benefit was imposed in 1998--offered an excellent 
working model of the kind of insurance plan all Americans should have. 
Each federal employee was able to choose among a range of plans that 
differed in benefit packages and costs. The only real weakness in the 
system was that the various plans were still subject to whatever 
mandates the states imposed on them, and those state mandates were not 
driven by consumer demand, but by the effectiveness of special interest 
lobbying. With the legislation before us today we are seeing the 
beginning of that same disgraceful con game of using the power of 
government to force people to buy something they neither want nor need.
    If workers want insurance coverage for contraception, they should 
be able to get it. There is a very easy solution to the difficulty that 
some workers have experienced in obtaining contraceptive coverage: 
simply assure them the same kinds of consumer choice federal employees 
have enjoyed for years. By contrast, the solution proposed in this 
legislation--to force every worker in America to purchase such coverage 
whether they want it or not--is wasteful, illiberal, and establishes a 
terrible precedent that will be exploited by every special interest in 
the health care field.
                  Statement of Elizabeth A. Cavendish
    NARAL appreciates this opportunity to urge the Senate Committee on 
Health, Education, Labor, and Pensions to ensure contraceptive equity 
in insurance plans by enacting S. 104, the Equity in Prescription 
Insurance and Contraceptive Coverage Act. NARAL's mission is to protect 
a woman's right to make personal decisions about the full range of 
reproductive choices; to make abortion less necessary--not more 
difficult and dangerous. In support of this mission, NARAL and its 27 
state affiliates have made ensuring contraceptive coverage for women a 
top priority.
    This bill offers the Senate a prime opportunity to promote women's 
health, to strike a blow for equity, to advance popular legislation, 
and, most importantly, to give women real choices over their 
reproductive lives, so that we may reduce unintended pregnancies. 
Public opinion polls report that Americans want Congress to enact 
legislation that will make genuine improvements in their lives; this 
legislation offers you just such an opportunity. Every month, when a 
woman who previously paid for birth control pills out of pocket simply 
pays her usual co-payment, she will be grateful to you. Voters who 
could not afford the most dependable forms of contraception will 
appreciate that you recognized this unfairness in insurance coverage.
    Contraceptive services are important to women's overall health and 
in reducing unintended pregnancy, and should be included as part of 
basic health care coverage. Although most health insurers generally 
cover prescription drugs, many insurers exclude contraceptives. 
Nonprescription contraceptive methods such as condoms and spermicides 
are widely available in the U.S., but the most effective methods such 
as oral contraceptives and hormonal implants are more costly and 
obtainable only through a medical provider. Therefore, some women 
covered by private health insurance are likely to use less expensive 
contraceptive methods as an alternative to paying high, out-of-pocket 
expenses for more effective contraception.
Legislators Recognize the Importance of Insurance Coverage for 
        Contraception.
    Congress recognized the importance of contraceptive equity in 1998 
by enacting a provision in the Treasury-Postal Appropriations bill 
which guarantees that Federal Employee Health Benefits plans provide 
contraceptive coverage to the same extent as coverage for other 
prescription drugs and devices. The provision has been maintained each 
year since then, and although the Bush administration targeted it for 
elimination earlier this year, the full House and the Senate 
Appropriations Committee rebuffed that attempt with strong bipartisan 
majorities.
    In recent years, state legislators have also begun to recognize the 
importance of contraceptive coverage. Between 1997 and 2000, state 
legislatures introduced a total of 135 such bills. Since 1998, 16 
states have enacted comprehensive laws to address the imbalance in 
prescription contraceptive coverage in private insurance, and six other 
states have laws, policies, or regulations that require some level of 
insurance coverage for contraception.
The Equal Employment Opportunity Commission (EEOC) and a Federal Court 
        Have Ruled That It Is Sex Discrimination for Employers To 
        Exclude Prescription Contraceptives from Prescription Drug 
        Plans.
    Federal law prohibits sex discrimination in employment, including 
discrimination on the basis of ``pregnancy, childbirth, or related 
medical conditions.'' In December 2000, the EEOC issued a decision 
finding that an employer's failure to provide coverage for prescription 
contraceptives, when it covers other preventative drugs and devices, 
constitutes unlawful sex discrimination under federal law. The decision 
was issued in response to charges filed by two women, both registered 
nurses, who were denied equitable coverage for contraception by their 
employers. These women alleged--and the Commission agreed--that this 
denial of coverage violated Title VII of the Civil Rights Act of 1964, 
which bars employers with fifteen or more employees from engaging in 
sex discrimination.
    Prior to the release of the EEOC decision, a lawsuit was filed in 
federal district court asserting that an employer's exclusion of 
prescription contraceptives in its employee health plan violates Title 
VII. In June 2001, the court, in a case of first impression, echoed the 
EEOC decision and concluded that the employer's failure to include 
prescription contraceptives in an otherwise comprehensive prescription 
drug plan was sex discrimination under federal law. As a result of this 
ruling, the court ordered the employer at issue in the case to cover 
all prescription contraceptive drugs, devices, and services ``to the 
same extent, and on the same terms,'' as it provides coverage for other 
prescription drugs, devices, and services.
    Enacting S. 104 would ratify these important rulings of the EEOC 
and a federal district court, undoubtedly hastening compliance. 
Moreover, those cases applied to employers, and this legislation would 
bind insurers; accordingly, with its passage, no doubt would remain 
about the obligation to treat women's contraceptive needs equitably.
Without Federal Legislation to Require Contraceptive Parity, Insurance 
        Coverage of Contraceptives is Inadequate
    Although state legislatures will continue to take action to ensure 
contraceptive coverage for some women, they cannot ensure coverage 
throughout the United States. Not all states will require coverage, and 
even in states that do, not all women who have private insurance will 
be covered. In fact, over half of all U.S. workers are covered under a 
health insurance plan regulated by the Employee Retirement Income 
Security Act (ERISA) and thus exempt from state regulation. Those 
employees must of necessity seek equity under federal law.
    Congress cannot just sit back and wait for the market to provide 
these services. Unfortunately, all too few plans offer this coverage 
and all too few employers demand that women's health needs be covered 
in the plans they purchase. Perhaps insurers have decided that women 
will just pay out of pocket for the most reliable contraceptives; 
perhaps they assume that going to the drugstore for less effective 
methods is sufficient. In either case, such thinking is unfair to 
women. Congress must redress the market failure whereby insurers fail 
to cover this critical aspect of women's health care notwithstanding 
the clear demand of women for effective contraceptives.
    S. 104 recognizes that the following state of affairs is 
unacceptable:
    Half of All Traditional Fee-for-Service Insurance Plans Cover No 
Reversible Contraceptive Methods at All, and Existing Coverage Is 
Lacking.
    Forty-nine percent of all typical large group plans (insured 
indemnity plans written for 100 or more employees) do not routinely 
cover any contraceptive methods, and only 15 percent cover the five 
primary reversible contraceptive methods: oral contraception, IUD 
insertion, diaphragm fitting, Norplant insertion, and injections 
(typically Depo-Provera). Fewer than 40 percent of typical large group 
plans routinely cover any one of these five methods. Coverage of all 
five methods is critical to women's health, since not all methods are 
appropriate for all women. For instance, some women cannot take 
hormonally-based contraceptives such as ``the pill,'' and they must 
have access to other effective contraception such as diaphragms or the 
IUD.
    By contrast, sterilization is generally covered by 85 percent of 
large group plans, reflecting the tendency for health insurers to cover 
surgical services, but not preventive care.
    Health Maintenance Organizations (HMOs) Provide Better 
Contraceptive Coverage, But Fewer Than Half Cover the Five Most 
Commonly Used Methods.
    Although 93 percent of HMOs cover some contraceptive methods, only 
39 percent routinely cover the five most commonly used methods.
    Coverage of contraceptive devices by HMOs varies. Implant 
insertions are covered by 59 percent of HMOs and 86 percent of IUD 
insertions are covered. Coverage of the devices themselves, however, is 
always lower than for the insertion or fitting.
    Preferred Provider Organizations (PPOs) and Point-of-Service (POS) 
Networks Often Include Some Contraceptive Care, But Contain Significant 
Coverage Caps.
    Forty-nine percent of PPOs and 19 percent of POS networks do not 
routinely cover any reversible contraceptive methods. Only 18 percent 
of PPOs and 33 percent of POS networks typically cover the five most 
commonly used methods.
    PPOs provide minimal coverage of contraceptive devices, with only 
23 percent for diaphragm fittings, 25 percent for IUD insertion, and 35 
percent coverage for injections. Coverage of contraceptive devices by 
POS networks ranges from 46 percent for IUD insertions and diaphragm 
fittings to 72 percent for an injection.
Inequities in Insurance Coverage for Prescription Contraception Fall 
        Heavily Upon Women.
    Women of reproductive age spend 68 percent more than men on out-of-
pocket health care costs, with reproductive health care services 
accounting for much of the difference.
    The most effective forms of prescription contraception are used 
only by women. Some of these methods are expensive, at least up front, 
often costing hundreds of dollars at the outset of patient use. Thus, 
women who pay out-of pocket may opt for less expensive and sometimes 
less effective methods, thereby increasing the number of unintended 
pregnancies.
Recent Polls Indicate that the Public Supports Contraceptive Equity.
    In a 2001 NARAL Foundation nationwide poll, 77% of respondents 
supported legislation requiring health insurance companies to cover the 
cost of contraception.
    A national survey by the Kaiser Family Foundation found that three 
quarters of those surveyed favored legislation requiring insurers to 
provide coverage for the full range of contraceptives. Support for 
insurance coverage of contraception remained high (73 percent) even 
when participants were told that the coverage could increase insurance 
premiums by $1 to $5. In addition, the survey also found that the 
public is more likely to support insurance coverage of contraceptives 
(75 percent) than Viagra (49 percent).
    Two state polls found similar support. A Connecticut survey found 
that 76 percent of those polled support legislation requiring insurance 
companies to cover contraceptives. In Texas, a Scripps Howard poll 
found that 70 percent of Texans favor requiring insurance companies to 
cover prescription contraceptives to the same extent that they cover 
other prescription drugs.
Improved Access to and Use of Contraception Would Save Insurers and 
        Society Money by Preventing Unintended Pregnancies.
    Nearly 50 percent of pregnancies are unintended, including 31 
percent of pregnancies among married women. Fifty-four percent of 
unintended pregnancies end in abortion.
    Improved access to and use of contraception would save insurers and 
society money by preventing unintended pregnancies. Insurers generally 
pay the medical costs of unintended pregnancy, including ectopic 
pregnancy ($4994), induced abortion ($416), spontaneous abortion 
($1038), and term pregnancy ($8619). Therefore, access to contraception 
should actually prevent other, more expensive medical conditions 
associated with unintended pregnancy that usually are covered by health 
plans.
    A recent cost analysis conducted for The Alan Guttmacher Institute 
(AGI) indicates that the cost of covering contraception is not 
significant. The average total cost (including administrative costs) of 
adding coverage for the full range of reversible prescription 
contraceptives to health plans that do not currently cover them is 
$21.40 per employee per year--$17.12 of employers' cost and $4.28 of 
employees' cost. The added cost for employers to provide coverage of 
the full range of reversible contraceptives is approximately $1.43 per 
employee per month. The cost is significantly lower for health plans 
that currently cover at least some contraceptives.
Private Health Insurance Coverage of Contraception Will Improve the 
        Health of Women and Families.
    The lack of adequate private insurance coverage for contraceptive 
services makes it more difficult for women to prevent unintended 
pregnancy and increases the need for abortion. Nearly 50 percent of all 
pregnancies in the U.S. are unintended, and over one-half of unintended 
pregnancies result in abortion. The majority of American women and men 
believe that the cost of birth control and the inability to obtain it 
contribute to the problem of unplanned pregnancy. The U.S. differs from 
countries with lower rates of unplanned pregnancy in that highly 
effective contraceptive care in the U.S. is neither widely available 
nor easily accessible.
    In addition to contributing to high rates of unintended pregnancy, 
the inaccessibility of more effective contraceptive methods carries 
appreciable health risks for women and children. Research shows that 
women with unintended pregnancies are less likely to obtain timely or 
adequate prenatal care. Moreover, unintended pregnancy increases the 
likelihood of low birth weight babies and infant mortality. Estimates 
show that effective family planning could reduce the rates of low birth 
weight and infant mortality by 12 percent and 10 percent, respectively.
                               conclusion
    Requiring private insurance to cover contraception will increase 
access to more effective contraceptive methods and will allow a greater 
number of women to plan, space and time pregnancies, thereby reducing 
unintended pregnancy and the need for abortion. The impact of 
contraceptive coverage will be improved health for American women, men 
and families. This legislation is fair, it is sensible, it is 
important, it is popular, and it should be enacted promptly.
                              American Life League,
                                        Stafford, VA 22555,
                                                September 12, 2001.
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC.

    Dear Honorable Members of the Committee: American Life League 
opposes passage of any legislation, or the funding of any program, 
which in any way promotes contraception. This certainly includes the 
Equity in Prescription Insurance and Contraceptive Coverage Act of 2001 
(S. 104). Such a law would require health insurance premium payers to 
pay for contraceptive drugs and devices, many of which act, some of the 
time, to prevent the implantation of an already conceived living human 
embryo by causing the death of that human embryo after her life has 
begun at fertilization/conception but before she implants herself in 
her mother's womb. This proposed law, S. 104, thereby requires the 
subsidizing of chemicals that kill human persons during their first 
days of life. Furthermore, contraception, in and of itself, even if it 
consists only of barrier methods that do not cause abortion of 
embryonic persons, is a grave moral evil that should not be promoted in 
any way by civil authority. S. 104 legitimizes a practice that destroys 
God's plan for every sexual act to be open to the procreation of new 
life within the context of a loving relationship between two married 
people.
    The American public is now more acutely aware of the humanity of 
the human embryo from the debate over embryonic stem cell research. 
Most Americans believe that the federal government should not be 
promoting a program that kills human embryos for stem cell research. 
Why then does our government promote embryonic killing through 
``contraceptive'' programs such as Title X and why is Congress 
contemplating a bill (S. 104) that will further promote such killings?
    In 1998, Senators Mike Enzi, Tim Hutchinson, John Ashcroft, Sam 
Brownback, Dan Coats, Jesse Helms, Robert Smith and Don Nickles signed 
a ``dear colleague'' letter opposing a Senate amendment requiring that 
federal employees get coverage for contraceptive drugs and devices. In 
the letter, they said, ``We are concerned with what appears to be a 
loophole in the legislation regarding contraceptives that, upon failing 
to prevent fertilization, act de facto as abortifacients.''
    On January 18, 2001, during the Senate Judiciary Hearing on the 
appointment of John Ashcroft as Attorney General, the President of 
Planned Parenthood Federation of America, Gloria Feldt, complained 
about this 1998 ``dear colleague'' letter when she testified against 
John Ashcroft.
    She said, ``The practical, and intended, result of these and 
similar efforts would be not only the criminalization of abortion as we 
know it, but also of some of the most commonly used and effective 
methods of contraception, such as the birth control pill, which 
frequently acts to prevent implantation of the fertilized ovum . . .'' 
You see, even Planned Parenthood admits that many of the most common 
forms of contraception prevent implantation by causing the death 
[aborting] of the human embryo.
    Further, we would also oppose passage of S.104 even if it were to 
be amended to include a conscience clause that would allow insurers or 
employers an exemption on the basis of religious belief. Proponents of 
similar contraceptive coverage acts on the state level have used this 
so-called compromise tactic to deflect opposition. But the fact is that 
even with a conscience clause for insurers and/or employers, individual 
employees can still be stuck paying partial premiums into an employer 
plan that did not opt out or qualify for the conscience exemption. 
These individual employees will, in many cases, have no other 
affordable health insurance option than the one that subsidizes birth 
control practices even though these employees find such coverage 
morally objectionable. Logically, it makes no sense for any health 
insurance plan to pay for birth control prescriptions. Such medications 
do not treat illness but rather become the cause of physical ailments 
for women and death for countless numbers of embryonic persons. S. 104 
must not become law.
            Sincerely yours in the Lord of Life,
                                               Julie Brown,
                                                         President.
    [Whereupon, at 4:43 p.m., the committee was adjourned.]

                                    

      
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