CNN has an interesting story about a Christian organization that is seeking to avoid fines for not providing coverage for the “Day After” pill or (I think) RU-486. Let us not argue about birth control or abortion. My issue here is the amount of the fine, which is $100 per day per employee for whom the employer refuses coverage. Why isn’t that fine excessive? To begin with, let’s look at the cost of such services. The cost of the drugs are relatively low. According the Planned Parenthood, the cost for the pharmaceuticals are between $10 and $70. For an insurance company this is really a non-issue, and that leaves the moral issue, because it’s not an ongoing expense. In fact, it may even be lower than some people’s co-payments or deductibles. Now we need to add this to an insurance risk pool cost, and the price for insurance probably drops to well less that $0.10 per year . After all, how often does anyone need such services? Maybe once in their lives? Maybe never.
If we break this down, then, to compensatory versus punitive damages, let’s postulate an government program that allows doctors and pharmacies to be reimbursed for the cost of the procedure. Let’s call the program, oh…. Medicaid. Let’s say that costs, from a risk perspective, $1.00 per year. The Supreme Court has already said that punitive damages in civil cases should not exceed a factor of 10. Why then, should the fine for this behavior not by $10 per employee per year instead of $100 per employee per day?
In fact, why not let employers opt out on conscience grounds and let them pay a slightly higher premium of $2.00 per employee? In this sense, the government would stand to profit from an employer who REALLY has qualms. Of course, one would also have to ask why that company would feel so comfortable paying the government twice what it would pay the insurance company, when at the end of the day the same service would be performed?
Put simply: what is the societal interest in penalizing a company 100,000 times the cost of a service in this case? Is this such an egregious omission? Are employees unsafe? Would the service otherwise be unavailable? What is the issue?