11:49am

Fri January 25, 2013
Planet Money

Free Breast Pumps And The Cost Of Health Care

Originally published on Fri January 25, 2013 3:12 pm

Health insurance plans now have to cover the full cost of breast pumps for nursing mothers. This is the result of a provision in the Affordable Care Act (aka Obamacare), and the new rule took effect for many people at the start of this year.

It's led to a boom in the sale of the pumps, which can cost hundreds of dollars.

Yummy Mummy, a little boutique on New York's Upper East Side, has suddenly become a health care provider/online superstore. The company has been hiring like crazy, and just opened an online call center and a warehouse in Illinois. Yummy Mummy even hired somebody to talk to customers' health insurance companies.

And new moms now seem more likely to splurge on fancy new breast pumps. Caroline Shany, a Yummy Mummy customer, spent her own money to buy a breast pump for her first baby. She may buy another one now because insurance will pick up the tab.

"Why not?" she says.

Weird things happen when you take price out of the equation for consumers. For one thing, they stop looking for the best price. But even though breast pumps are free for new moms, somebody has to pay for them.

"Health insurance premiums are driven by how much we spend on health care," says Harvard health economist Katherine Baicker. "The more things that are covered by health insurance policies, the more premiums have to rise to cover that spending."

Advocates of requiring insurance companies to pay for breast pumps say that the measure will pay for itself in the long run. Babies that are breast fed tend to have fewer health problems, and paying for breast pumps should mean more babies are breast fed.

Whether that happens may depend partly on how the new rules are implemented. Insurers are still trying to figure out whether to pay for extra-fancy breast pumps, or just basic models.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

ROBERT SIEGEL, HOST:

A rush is on among new mothers to buy a big ticket item that is suddenly free. Breast pumps are now 100 percent covered by health insurance. That's thanks to a provision tucked inside the Affordable Care Act. As NPR's Zoe Chace of our Planet Money team explains, a gift like this can come with some unexpected consequences.

ZOE CHACE, BYLINE: First thing, and this part is obvious, when something that used to cost you hundreds of dollars is now available for free, a lot more people want to get one.

(SOUNDBITE OF MUSIC)

AMANDA COLE: Ringing. It's a little crazy.

CHACE: Meet Amanda Cole, the CEO of Yummy Mummy. Her store specializes in breastfeeding and her life has totally changed because of this new provision. Just in the last few weeks, because so many people are ordering breast pumps...

AMANDA COLE: We are opening a call center. We now have a warehouse in Illinois. We're doubling the number of employees, like within a two-week time frame, doubling the number of employees we have.

CHACE: Yummy Mummy now takes your insurance. This little boutique on New York's Upper East Side has become a health care provider/online superstore. Business is booming. The assistant manager is boxing up breast pumps to ship across the country. Behind her, the women who now sit on the phone all day dealing only with insurance requests...

UNIDENTIFIED WOMAN #1: I can definitely take all the information right now, call Aetna and verify your coverage.

CHACE: So breast pump coverage in the new health care law makes things crazy for new breast pump sellers. Some of her competitors are totally sold out. Things are also different for another group, new moms. Take Caroline Shany, Yummy Mummy customer, taking a break from shopping to nurse her baby on the couch in the back. She already has a breast pump, which she paid for out of pocket. But now...

CAROLINE SHANY: I don't know. I'm thinking it's good to have another one. Why not? So...

CHACE: Weird things happen when you take the price out. Why not start a whole collection? And these days, breast pumps are super fancy. There's this one that supposedly really feels like a baby drinking.

UNIDENTIFIED WOMAN #2: And it's (unintelligible).

CHACE: The expression phase. If you don't have to pay for it, why not get the nicest one?

Thanks to the new health care law, the experience of getting a pump is more like filling a prescription at the pharmacy. You just go and get the drugs. You don't shop around for the cheapest pill. Why would you if you have insurance? The thing is, when you talk to economists, nothing's free. We are all paying for the breast pumps, actually, if we have health insurance.

KATHERINE BAICKER: That's why you can skip the baby gift. You got them a breast pump.

CHACE: Katherine Baicker works at the Harvard Center for Public Health. She says insurance companies get the money from the insurance premiums that we pay every month.

BAICKER: Health insurance premiums are driven by how much we spend on health care. So the more things that are covered by health insurance policies, the more premiums have to rise to cover that spending.

CHACE: OK, sure, we're spending up front, but the argument goes, it's worth it if it results in more breastfeeding. Linda Rosenstock is a professor at the School of Public Health at UCLA. And she chaired the team that recommended this provision to the government. She says the science is unequivocal, that preventative care spending up front leads to fewer health problems down the road.

LINDA ROSENSTOCK: It's the basis of much of the Affordable Care Act is to recognize that if you can prevent a disease or an injury before it starts, it is virtually always going to save you money than if you have to treat it after the fact.

CHACE: But our economist, Katherine Baicker, isn't so sure that eliminating the cost of the breast pumps really induces much extra breastfeeding. Rather, she thinks most of the money spent will go towards people who would have been breastfeeding anyway.

BAICKER: So the question is whether the value that those people get from the breast pumps is worth the cost in terms of increased health spending and increased premiums.

CHACE: For the record, Baicker thinks there are better ways to get more people to breastfeed, cheaper ways that don't include encouraging women who already have a working breast pump to go out and get a second one for example. The details of the new provision are still to come, like which pumps, the expensive gold-plated versions, accessories? Which ones?

At this point, insurance companies are still figuring out what, if any, cost controls to build in to deal with breast pumps' newfound popularity. Zoe Chace, NPR News. Transcript provided by NPR, Copyright NPR.

Related Program