Mandated Benefits Review - Senate Bill 1183 - Staff Analysis of Act 34 Requirements
(in response to the eight requirements of Act 34, Sec. 9)


Act 34 provides that the documentation submitted to the Council by supporters and opponents of a proposed mandated benefit should address eight specific areas. In reviewing these eight points, Council staff performs a preliminary review to determine whether the information received is sufficient to warrant the formal Mandated Benefits Review process outlined in the Act. Following are Council staff findings pertaining to the documentation received for each of these eight points for Senate Bill 1183:

Summary of the Responses to the Eight Categories Required by Act 34

In general, supporters of Senate Bill 1183 contend that infertility is a disease for which therapeutic interventions are available; therefore infertility services should be covered by health insurance to the same degree as other diseases. Proponents argue that not including comprehensive infertility benefits is a matter of discrimination against infertility patients. Further, supporters maintain that the percentage of the population that would need high cost assisted reproductive technologies is low enough that the additional premium cost on a per person basis is moderate.

Opponents assert that comprehensive infertility services do not fulfill the criteria for medical necessity. The Managed Care Association claims that SB 1183 "...goes beyond the nature of current State mandates by requiring benefits for services which are emotionally compelling yet not medically urgent or necessary to sustain life or health." Furthermore opponents argue that assisted reproductive technologies are costly and have a comparatively low success rate relative to other medical treatment.

Some critics of the measure also contend that the language of the bill is problematic. The legislation includes treatments that are undeveloped, with costs not yet known. Furthermore the definition of infertility does not differentiate by age or in any other way. As written, post-menopausal women, women who have undergone voluntary sterilization, and surrogates would have these costly procedures covered by insurance.

Specific Responses to the Eight Categories Required by Act 34

  1. The extent to which the proposed benefit and the services it would provide are needed by, available to and utilized by the population of the Commonwealth.

    In discussing the need for the proposed benefit, most submissions used statistics on infertility from the National Center for Health Statistics, and/or the Centers for Disease Control and Prevention. The National Center for Health Statistics reports a 10% rate of infertility for women, with an 8% rate for couples. Other submissions had slightly differing numbers. RESOLVE, the national infertility association, reports a 12.9% rate for couples. Highmark, in their submission, used an 8% figure to arrive at their estimate of the number of Pennsylvanians affected by the proposed mandate. The Council notes that SB 1183 would apply to all infertile women, not just to those in couples.

    In addressing the issue of availability of infertility services to Pennsylvania residents, Highmark reports that in 1995 there were 17 Assisted Reproductive Technology clinics operating in Pennsylvania. A map of clinic locations shows several clusters in Eastern and Central Pennsylvania, and one cluster in the Pittsburgh area. Dr. William Panak notes that the distribution of clinic locations could interfere with treatment due to travel difficulties for those living in the rural areas of Pennsylvania. If the benefit were mandated, he claims that it is probable that additional clinics would open to accommodate the more rural populations.

    Current utilization figures were discussed in several of the submissions. According to Dr. William Panak, exact utilization percentages of comprehensive infertility services are difficult to estimate. There is no national registry for comprehensive infertility service utilization, and many of these services are provided by general practitioners and gynecologists. (There is a registry which summarizes the procedures and outcomes of assisted reproductive technology maintained by the Society of Assisted Reproductive Technology). Another report estimates that 43% of infertile women raise the issue with their gynecologist, and 21% actually go on to a course of diagnosis. Other figures suggest that 1.2% - 2% of all women receive infertility services. In Pennsylvania, this suggests that between 32,000 and 53,000 women will receive some type of infertility service.

    Are Infertility Services Medically Necessary?

    Submissions from The Insurance Federation of Pennsylvania, the Managed Care Association and Highmark examine the concept of the need for infertility services from a different angle. The Insurance Federation's submission discusses the distinction between the desire for the proposed benefit and the need for it.

    "As with many conditions, the perception of its seriousness varies both with whether one is afflicted by it or financially interested in rendering the services to resolve it. ...

    The sense of loss at not being able to enter in on the joys of parenthood is profound and one cannot underestimate the concern and grief that it may engender. On the other hand, from a medical necessity standpoint, the medical immediacy of curing the inability to get pregnant is probably rather low in most cases."

    The submission from the Managed Care Association asserts that SB 1183 "would go a step beyond the nature of current State mandates by requiring benefits for services which are emotionally compelling yet not medically urgent or necessary to sustain life or health". The submission concludes "While infertility benefits may enhance quality of life, infertility is not a life-threatening medical condition."

    An article submitted by Highmark notes "While arguments and analyses in support of health insurance for IVF (in vitro fertilization) are in some ways compelling, they are unlikely to persuade many private health insurers who view the procedure as both costly and discretionary."

    In contrast, submissions from supporters of SB 1183 disagree with this viewpoint. RESOLVE of Philadelphia's submission maintains, "Despite arguments to the contrary, infertility is a recognized disease of the reproductive system. It has a definition, known incidence and prevalence, defined causes, and proven treatments." Furthermore, "Infertile couples do not choose to be unable to bear children. They are suffering from an illness for which treatments are available."

    The national arm of RESOLVE addresses the same issue.

    "Infertility is recognized as a disease by professional medical associations, yet some insurance companies do not define infertility as a disease. Some view the need to obtain treatment of the disease as a "lifestyle choice" and others state that such treatments are not "medically necessary." Some dismiss the medical aspects of the infertility experience and make judgments based on the perceived societal aspects of the desire to have a child. Infertility is not a choice, and for those experiencing infertility, having a child is not an option unless they can receive treatment. "Medically necessary" does not only refer to life and death situations, but also applies to treatments necessary to overcome a disease. Medical insurance should enable people to obtain quality health care to treat their diseases and medical conditions."

    On the other hand, literature included in the American Society for Reproductive Medicine submission seems to support the view of infertility treatment as discretionary. Their Guideline for the Provision of Infertility Services includes a section written with the purpose of helping couples make the decision of whether or not to pursue infertility treatment:

    "Decisions about the management of infertility depend upon the patients' wishes for several reasons. (italics added) First, the diagnostic assessment is unable to comprehensively evaluate all potential fertility defects. Furthermore, the predictive value of some diagnostic tests is not known. Also, the therapy may be empiric, because in some cases there is no known mechanism to be addressed by specific therapy. The price for some treatments is high, the adverse effects could be serious, and considerable time may be lost from normal activities. Therefore, the right choice for a given couple will depend on many factors including 1) the intensity of their feelings with respect to childlessness, 2) their approach to risk-taking, 3) their finances, and 4) the time they have available for visits to the infertility clinic."

    In summary, infertility services, including assisted reproductive technologies, are available to and are utilized by Pennsylvania women. There is strong disagreement on the need for this benefit.

  2. The extent to which insurance coverage for the proposed benefit already exists, or if no such coverage exists, the extent to which this lack of coverage results in inadequate health care or financial hardship for the population of the Commonwealth.

    Existing Coverage

    Several submissions included information related to current levels of insurance coverage for infertility services in Pennsylvania. Nationally, one study reported that about 20% of traditional indemnity plans, 23% of preferred provider organizations, 25% of point of service plans and 28% of health maintenance organizations offer coverage for infertility services. These employer-sponsored plans, however, may not pay the full cost of treatment, may cover only diagnosis and not treatment, and seldom cover high-cost procedures such in vitro fertilization. The procedure most likely to be covered is tubal surgery. Because studies such as these include states that have infertility mandates, as well as states where there is no mandate, the numbers may not be accurate with relation to any individual state.

    Highmark reports that Highmark and Pennsylvania Blue Shield generally provide coverage for diagnosis of infertility and for surgical treatments for both female and male infertility. This would include tubal surgery services for the female and varicocelectomy for the male. Further coverage is available to group plans at additional cost, with a variety of benefit options available. Highmark's submission stipulates,

    "Specific exclusions applicable to artificial inseminations and in vitro fertilization are noted in most group contracts. This policy reflects the experience of groups incurring significant utilization and claims costs when in vitro fertilization was first introduced as an option."

    According to Highmark, their CommunityBLUE Health Maintenance Organization (HMO) and Point-of-Service programs "include coverage for all assisted fertilization procedures with the exception of in vitro fertilization (IVF)." Highmark further notes that two of its health maintenance plans include artificial insemination coverage.

    The Managed Care Association reports, "Coverage for the diagnosis of infertility exists widely, while treatment coverages vary from plan to plan. The decision as to whether or not additional riders are purchased to cover infertility services are decisions made by purchasers."

    Dr. William Panak agrees that, in general, most health insurance plans include coverage for diagnosis for infertility. Furthermore, most policies include some coverage for treatment of infertility. Dr. Panak notes, however, that the level of coverage varies widely, with most policies excluding assisted reproductive technologies.

    According to RESOLVE, Aetna U.S. Healthcare in 1995 became one of the first managed care companies to offer comprehensive coverage of assisted reproductive technologies, including in vitro fertilization (IVF), gamete intrafallopian transfer (GIFT), and zygote intrafallopian transfer (ZIFT). On April 1, 1998, Aetna U.S. Healthcare announced that it was eliminating this coverage because it felt that adverse selection was occurring (i.e. a large percentage of its customers were choosing Aetna for this coverage, using it, and driving up costs disproportionately). The national RESOLVE organization comments that "Such a concern would be alleviated with an infertility insurance mandate, under which a burden would not be placed on one or two insurers because coverage would be available through all insurance companies." A mandate would require all insurers to offer coverage; therefore, no one insurer would suffer adverse selection.

    Does Lack of Coverage Result in Inadequate Health Care?

    The question of whether the lack of coverage results in inadequate health care was addressed by several submissions.

    The Managed Care Association claims, "While it is feasible and understandable that the absence or inadequacy of the proposed benefits would have a significant emotional impact upon patients, the medical health of patients is not at stake. Infertility is not a life-threatening medical condition."

    The Insurance Federation states,
    "With reproductive services available in at least both Pennsylvania urban centers, it is not arguable that a failure to have this as a mandate harms the state's health care system. Moreover, the Federation would argue against a definition of deficiency that implies everyone must have paid access to every treatment no matter where it stands on the scale of medical necessity."

    Dr. William Panak's submission expressed the view that lack of insurance coverage for infertility does result in inadequate health care. Referring to the fact that the assisted reproduction technology rate in Massachusetts is five times higher than in Pennsylvania, he says "We interpret this as evidence for incomplete and thus inadequate medical care..."

    Financial Hardship

    There is consensus that paying out-of-pocket for infertility treatment can result in a high degree of financial hardship for many infertile couples pursuing the goal of having a baby. The Managed Care Association's submission acknowledges that "...it is a fact that those undergoing extensive treatment may be subject to significant personal expense." The costs for infertility treatments are very high. They can range from $200 a month for fertility drugs to $13,000 for one cycle of in vitro fertilization. It is not uncommon for couples to incur costs in excess of $30,000. A significant number spend as much as $50,000. Furthermore, no amount of treatment guarantees a successful pregnancy.

    RESOLVE of Philadelphia claims that,
    "The inequities and unevenness in insurance coverage over reproductive services leads many infertile couples to risk their financial future in pursuit of a child, even where there is partial insurance coverage." Furthermore, "It is evident that for most couples infertility brings about financial and emotional crisis. Not only must the infertile couple deal with the personal and silent ordeal of possibly never giving birth to a biological child; inequitable insurance practices force a financial crisis that need not exist. While laws cannot take away the emotional pain associated with infertility, they can remove the financial burden that inequitable insurance practices currently place on the infertile."

    On the other side of the question of financial hardship,

    The Insurance Federation comments,
    "The issue of financial hardship only arises if one believes that the inevitable course for an individual is to devote continuous and financially unlimited efforts which may never be successful to solving this problem."

    In general, submissions did not demonstrate that that there is currently inadequate level of coverage or that a lack of coverage results in inadequate health care. The fact that more women take advantage of insurance coverage of assisted reproductive technologies when it is available may indicate the desirability of the coverage but does not necessarily indicate that those without this coverage experience inadequate health care. The absence of insurance coverage may lead to financial hardship for those pursuing a full course of treatment for infertility, but the financial hardship experienced is the result of a personal choice made on the basis of a host of individual considerations.

  3. The demand for the proposed benefit from the public and the source and extent of opposition to mandating the benefit.

    The submissions received by the Council from both supporters and opponents of SB 1183 clearly expressed the nature and the source of both support and opposition. On the other hand, very few submissions on either side clearly addressed the extent of the demand or opposition to mandating the benefit.

    Support for Senate Bill 1183

    Proponents base their support on several key arguments:

    In general, submissions in support of the proposed mandate included consumer advocacy groups and providers of infertility related services.

    One submission addressed the question of the extent of the demand for the mandate. Dr. William Panak's report asserts that there is immediate demand for insurance coverage for infertility from between 134,000 and 223,000 women (50% - 100% of infertile Pennsylvania women). He further speculates, "This assumes, however, that demand for coverage is only among the infertile; there are many persons whose fertility status is unknown because they have not yet attempted to build their family. These individuals may be willing to pay for infertility insurance coverage within their health insurance plans." Dr. Panak presents two studies conducted for the purpose of ascertaining the extent of willingness to pay for infertility benefits. A survey of healthy medical professionals indicated the average person was willing to pay $1466 per lifetime for access to assisted reproductive services. Another study was done utilizing college undergraduates. They were offered a choice of two plans. Plan A covered 100% of maternity benefits, while Plan B covered 90% of maternity benefits and 90% of infertility benefits. Sixty two percent of the college undergraduates chose Plan B. They were willing to accept a 10% co-pay for maternity benefits in return for 90% coverage of infertility services. This group of college students was willing to pay $2.00 per month for the infertility portion. These studies represent somewhat limited constituencies. Whether "willingness to pay" can be equated to "public demand" is open to question.

    In summary, few submissions from supporters of SB 1183 specifically addressed the extent of public demand. Other than Dr. Panak's assertion that demand arises from 50% to 100% of the infertile population in Pennsylvania, the Council was able to infer some level of demand in Pennsylvania from the number of Pennsylvania citizens represented by supporting organizations. RESOLVE of Philadelphia represents 1,000 members, while RESOLVE of Central Pennsylvania represents 600 members. RESOLVE of Philadelphia also included a copy of a petition signed by 2,200 Pennsylvania residents.

    Opposition for Senate Bill 1183

    The submissions opposing Senate Bill 1183 represent heath care purchasers and insurers.

    Highmark provides health insurance coverage to over 6.5 million Pennsylvania residents. Their submission states,

    "State legislative mandates affecting health care benefits have a major impact on the financial viability of business. As the cost of benefits increase, so, too, does the cost of labor....In the case of infertility treatment, an extremely small percentage of individuals will ever access such benefits...Nevertheless, costs associated with the new benefit will be spread across all employees and the cost of their coverage."

    Highmark argues that any one mandate should be considered as contributing to the cumulative effect of mandates on businesses and on their ability to make affordable health insurance available to their employees. In support of this point, Highmark includes information from Milliman and Robertson.

    "A study conducted by Milliman and Robertson for the National Center for Policy Analysis estimates the cost of 12 of the most common mandates can increase the cost of health insurance by as much as 30 percent. Infertility treatment is listed on the following chart as adding 3 to 5 percent to the estimated annual cost of family coverage. Pennsylvania has already enacted 6 of the 12 most common mandates."
    Estimated Additional Costs for Certain Benefits
    *based on a standard family policy without mandates costing $3,500 per year
    Benefit Estimated Additional Cost
    Minimum Stay Maternity Less than 1% <$35
    Speech Therapy Less than 1% "
    Drug Abuse Treatment Less than 1% "
    Mammography Screening Less than 1% "
    Well Child Care Less than 1% "
    Podiatrists Less than 1% "
    Papanicolaou (Pap) smears Less than 1% "
    Vision Exams 1% to 3% $35-$105
    Chiropractors 1% to 3% $35-$105
    Alcoholism Treatment 1% to 3% $35-$105
    Infertility Treatment 3% to 5% $105-$175
    Mental Health Care 5% to 10% $175-$350
    TOTAL 15% to 30% $525-$1,050

    The Pennsylvania Chamber of Business and Industry notes that Insurance Department figures from 1996 show that Pennsylvania employers pay over $10 billion in health care premiums annually. Every 1% increase in premiums translates to at least a $100 million increase in the cost of doing business in Pennsylvania.

    Highmark goes on to discuss the effect of mandates on Pennsylvania's small and medium-sized businesses.

    "While large businesses may have the potential for greater need and use of a mandate among members of its workforce, most large-sized corporate businesses elect to self-insure. As ERISA-exempt plans, state imposed health benefit mandates are not applicable to such health plans.

    Small and medium-sized businesses offering coverage are most directly impacted by state benefit mandates. It is these organizations, however, that are least able to afford the added expense associated with the coverage. Given the limited population requiring and ultimately using infertility treatments, businesses endeavoring to offer their employees health benefits may find it unaffordable, while being competitively disadvantaged in the market by businesses not offering coverage at all and experiencing no added costs."

    Highmark maintains that the infertility riders they offer do not seem to be subject to heavy demand. "Our experience has demonstrated that groups selecting a benefit plan do not seek coverage for the array of assisted reproductive therapies now available...This may reflect the group's demographic profile or it may suggest that the benefit is not widely demanded."

    Independence Blue Cross is an insurance company serving residents of southeastern Pennsylvania. Their submission addresses the dilemma for the purchaser of an individual policy, "The individual market is the most sensitive to adverse risk selection. Any mandate for a benefit such as infertility coverage is likely to make individual policies unaffordable."

    The Insurance Federation of Pennsylvania is an association representing providers of commercial insurance policies. They maintain, "Demands for the benefit are almost exclusively limited to providers of related services and support groups for persons who are afflicted by reproductive difficulties." Furthermore, "The bill, either alone or in conjunction with other mandates, would decrease the competitiveness of Pennsylvania businesses, making products and operations more expensive. There is no evidence that this mandate would benefit or interest a wide variety of employees, nor that its cost would be worthwhile."

    The Managed Care Association of Pennsylvania is an association representing Pennsylvania Health Maintenance Organizations. Their submission states, "Opposition to the proposal stems from purchasers who would be forced to pay for an open-ended fertility benefit without consideration of what the mandate would do to employer health care costs or even if such benefits would be appropriate or necessary for specific employer groups."

    Rohm and Haas describe themselves as a Fortune 200 employer. Their opposition to Senate Bill 1183 was from the perspective of a purchaser of health insurance for their employees. Their submission urges opposition to all health care mandates. They claim that "Employers (big or little) drive these improvements via our purchasing power." Their submission warns, "Opening up the health care plan to a multitude of mandates will certainly place quality health care in jeopardy for our employees."

    Unites States Steel and Carnegie Pension Fund (on behalf of the USX Corporation) discusses the effects of mandates on employers, including pressure to become self-insured and the necessity of passing increased costs on to employees. They comment, "Indeed, one major reason for the fact that USX and almost every other major corporation is self-insured is the need to avoid provider protection legislation." Furthermore, "It is ironic that there is a direct correlation between the number of benefit mandates adopted by the legislature, the increasing cost in health insurance and the decreasing number of employees covered by employer provided health insurance." Council staff notes that between 1989 and 1996, the number of workers accepting health insurance offered by their employers declined from 79% to 70%. The extent to which individuals decline health coverage because of cost impacts all Pennsylvanians (catastrophic injury or illness, for example). All Pennsylvania residents absorb the cost of uncompensated care.

    Overall, opposition to SB 1183 comes from the health care purchaser and insurer communities. They express concern over the cumulative effect of mandates on employers and their ability to provide affordable health insurance. There is particular concern with a mandate to provide infertility services based on potentially high cost and the small percentage of the population who would benefit.

    1. All relevant finding bearing on the social impact of the lack of the proposed benefit.

      Submissions on both sides of the issue included studies demonstrating the emotional impact of infertility, including high levels of depression experienced by individuals and couples dealing with infertility. They wrote too, that infertility affects extended families and the community as well.

      RESOLVE of Philadelphia writes,
      "Sociologists and psychologists have documented the negative impact that infertility has on a couple's marriage and sex life, relationships with friends, relatives and co-workers, career, and self-esteem. For most women, infertility is a serious blow to their self-esteem. Having a child becomes all consuming and takes precedence over all other considerations, including career and in some instances, even marriage. Some women suffer from depression and may even consider suicide. Some studies conclude that couples with infertility are more depressed than individuals diagnosed with cancer."

      Studies discussed by the Pennsylvania Reproductive Associates' submission offer statistics supporting the contention that 49% of women and 15% of men considered infertility the most upsetting experience of their lives as compared with death or divorce. Another study found that 36.7% of women going through infertility treatment were depressed as measured by psychological assessment compared with only 18.4% of a control group.

      Supporters of SB 1183 contend that the one of the most difficult aspects of infertility is loss of control over one's life. Consequently, pursuing treatment can be the most effective way to cope with the situation.

      The Pennsylvania Reproductive Associates elaborate,
      "The hallmark feeling of infertility is the sense of being out of control. Infertility strips individuals of their future - their dream of children and family. Furthermore, infertility impacts on extended families.... Treatment means hope. ... Infertile men and women routinely find treatment the best coping resource to mitigate feelings of hopelessness, anxiety and depression."

      Dr. William Panak even more specifically addresses the impact of the lack of the proposed benefit by noting that,

      "There is anecdotal evidence to suggest that inadequate insurance coverage for infertility treatment leads to substantial economic hardship, and economic hardship is a primary determinant of depression, marital dysfunction, and family conflict."

      Opponents of SB 1183 question the efficacy of the proposed mandate in solving the dilemma for a large number of these individuals and couples.

      The Insurance Federation writes,
      "While the Federation would not question that there is a small number of persons and couples in the Commonwealth who are adversely affected by an inability to conceive, there is no showing that imposing this requirement of the health insurance market would necessarily relieve those problems for any substantial number of them...The problem is that many of those cases may not be resolvable regardless of financial resources. Secondly, many of these people would not be covered by the non-ERISA policies subject to the state insurance mandate in this bill."
      Highmark concludes,
      "There is no doubt that infertility has a definite social impact affecting the self-image and self-worth of individuals and couples, and the broader implications for their families, and the medical community. It is unrealistic, however, to assume that the crisis of infertility can be effectively minimized by a legislative mandate requiring expensive procedures, successful only if culminating in a live birth in less than 20 percent of all cases."

      In summary, proponents and opponents of the bill claim that there is emotional trauma and distress suffered by infertility patients. Opponents argue, however, that imposing a mandate for insurance coverage for costly assisted reproductive technologies that are successful in a small number of cases will not effectively address the social impact of infertility.

    2. Where the proposed benefit would mandate coverage of a particular therapy, the results of at least one professionally accepted, controlled trial comparing the medical consequences of the proposed therapy, alternative therapies and no therapy.

      Senate Bill 1183 does not call for the coverage of one particular therapy but for a range of possible infertility therapies. Most submissions, however, focused on discussion of in vitro fertilization and other assisted reproductive technologies, since these costly therapies are the ones most likely to increase under the bill.

      • Dr. William Panak's submission includes a comparison of live birth rates for couples undergoing in vitro fertilization and couples diagnosed as infertile who were on a waiting list to receive in vitro services. Results indicated that over the course of a year, on average, among the untreated infertile couples the live birth rate was 14.3%. Dr. Panak compares the 19.7% success rate of one cycle of in vitro fertilization favorably to the 14.3% live birth rate for untreated infertile couples.
      • A Canadian study cited in Dr. Panak's submission found that between 30% and 45% of couples undergoing in vitro fertilization were able to conceive by the 3rd attempt.
      • Overall, the treatments currently available raise the chances of pregnancy in any one cycle to a rate comparable to the chance of pregnancy for a fertile couple in any one cycle.
      Rate of Pregnancy in Any One Cycle
      *from William Mercer, Infertility as a Covered Benefit
      Fertile Couple IVF (in vitro fertilization) GIFT (gamete intrafallopian transfer) ZIFT (zygote intrafallopian transfer)
      25% 19.7% 28.5% 29.1%

      1. Where the proposed benefit would mandate coverage of an additional class of practitioners, the result of at least one professionally accepted, controlled trial comparing the medical results achieved by the additional class of practitioners and those practitioners already covered by benefits.

        Senate Bill 1183 does not call for coverage of an additional class of practitioners.

      2. The results of any other relevant research.

        An additional factor in the cost of infertility benefits is the cost that will result from a higher incidence of multiple births. The Centers for Disease Control and Prevention reported that in 1995, 37% of assisted reproductive technology births were multiple births, compared with 2% of births in the general population. Multiple births are associated with a higher rate of neonatal complications and with more stays in neonatal intensive care units than are single births. One submission summarized the costs associated with single, twin, and triplet births.

        Cost of Multiple Births
          Single Twin Triplet
        Neonatal Charges $5,000 $15,000 $30,000
        Maternal Charges $5,000 $8,000 $15,000
        Total $10,000 $23,000 $45,000

        According to Dr. William Panak's submission, "There is no doubt that high order multiple pregnancies contribute to overall health care costs and that infertility treatments contribute to these pregnancies."

        The national office of RESOLVE included the results of another study done in Massachusetts which found that the average charge for a singleton birth was $9,329, for twins was $20,318, and was $153,335 for triplets. The Council notes that this study's cost figure for triplets is substantially higher than the cost cited in the above chart.

        Highmark, too, expressed apprehension that the mandate may result in a greater number of multiple births.

        "Concern with the mandate is further linked to the prospect of multiple births often associated with assisted fertility procedures, and frequently resulting in premature births. As a consequence, and not withstanding the human suffering factor, babies born seriously underweight and with immature respiratory systems require significant neonatal intensive care, often for several months until the infant achieves a viable prospect of survival. Our opposition to the legislation rests, in part, with the benefit increasing the injectable hormonal drug utilization and the follow-up procedures having the added potential for multiple and premature births."

        It should be noted that Massachusetts has a slightly lower rate of multiple birth from assisted reproductive technology procedures than does Pennsylvania, probably due to the practice of transferring fewer embryos per assisted reproductive technology cycle (3.31 embryos per transfer in Massachusetts, 3.98 embryos in Pennsylvania). In Massachusetts, 6.2% of all live deliveries resulting from assisted reproductive technology were triplets or higher. In Pennsylvania, 8.1% of live deliveries resulting from assisted reproductive technology were triplets or higher. Supporters of the bill maintain that with less financial pressure to conceive in one cycle, fewer eggs are transferred, resulting in fewer multiple births.

        In summary, fertility treatments result in a higher rate of multiple births. Multiple births, especially triplets or more, are more costly than either single or twin births and result in a higher rate of neonatal complications. Supporters of Senate Bill 1183 point out that the rates of triplet and higher order multiple gestation pregnancies are lower in Massachusetts than in Pennsylvania, perhaps due to mandated access to assisted reproductive technology (ART) services and the accompanying reduced number of embryos transferred per procedure.

      3. Evidence of the financial impact of the proposed legislation, including at least:
        1. The extent to which the proposed benefit would increase or decrease cost for treatment or service.

          The only submission which addressed this question directly was that of Dr. William Panak, Ph.D. This submission predicts that both cost per treatment and cost to provide insurance coverage will decrease as a result of the mandate. Dr. Panak maintains, "Cost per procedure will be reduced as clinics and HMOs negotiate provider arrangements that lower physician fees and other costs in exchange for increasing the number of referrals to that clinic." No specific documentation, however, was included to support this statement.

        2. The extent to which similar mandated benefits in other states have affected charges, costs and payments for services.

          According to Dr. William Panak, the assertion that cost per treatment would decrease as a result of the mandate was predicated on his interpretation of data from Massachusetts, where the benefit is mandated. Dr. Panak claims that "overall costs to provide infertility services decreased relative to the rate of inflation for HMO plans that were in compliance with the mandate." No mention was made of indemnity, PPO or POS plans and their experience. Not enough information was given in support of this statement to ensure that this scenario would prevail in Pennsylvania.

          Twelve states have enacted some form of infertility mandate. All states but Massachusetts and Illinois have mandates which are far more restrictive than Senate Bill 1183. No specific documentation relating to the experience in these other states (other than Dr. Panak's comments on Massachusetts) was submitted.

          On a different note, but related to experience in other states, Highmark comments,

          "In a rather telling commentary, when Oregon sought to prioritize health services in order of public need, medical efficacy, and cost effectiveness in developing its standard benefit package for Medical Assistance, assisted fertilization ranked 701st in importance - of a total of 714 possible medical conditions reviewed."

        3. The extent to which the proposed benefit would increase the appropriate use of the treatment or service.

          A report to Congress by the Office of Technology Assessment submitted by Highmark notes that, "IVF patients undertake an estimated two IVF cycles on average, with most of them ceasing treatment after that for financial reasons...Broader insurance coverage would likely lead to more patients attempting IVF and to more IVF attempts per patient..."

          Information submitted suggests that utilization would rise substantially if insurance coverage were mandated. This assertion is supported by examining utilization figures from Massachusetts, where comprehensive insurance coverage for infertility services is mandated. The mandate proposed in SB 1183 is virtually identical to that in Massachusetts. According to William Panak, Ph.D., in a five year span from the time of the mandate's passage, in vitro fertilization (IVF) utilization in Massachusetts rose to a level that was approximately 5 times higher than in the rest of the Unites States and Canada. In Pennsylvania, in 1995, the rate of assisted reproductive technology (ART) procedures was 1.18 per 1,000 Pennsylvanian women between the ages of 20 and 44. In Massachusetts, the rate is 5.07 assisted reproductive technology (ART) procedures per 1,000 women between the ages of 20 and 44. The Massachusetts Committee on Health Care estimates that about 50% of infertile women seek infertility treatment. This number is substantially higher than estimates given nationwide (between 2% and 15% of infertile women seek infertility treatment). Together, these figures suggest that infertility mandates would result in a significant increase in the use of fertility services. Whether the increase is appropriate would be open to interpretation.

        4. The impact of the proposed benefit on administrative expenses of health care insurers.

          Highmark's submission projects an annual total of $1,039,000 to be required for the administration of claims and related administrative costs resulting from this mandate. This amount would be shared by all insurers in the Commonwealth proportionate to their membership and market share. Highmark goes on to mention that, in addition to this estimate, medical management of the complications arising from multiple pregnancies and highly sophisticated neonatal intensive care procedures have the potential for impacting administrative costs.

          Dr. William Panak, on the other hand, projects a negligible impact on administrative expenses. He, in fact, projects a possible decrease. "It may be the case that administrative costs decrease because insurance companies will spend less time discussing benefit limits and denied claims with their customers."

        5. The impact of the proposed benefits on benefits costs of purchasers.

          Milliman and Robertson conducted a study for the National Center for Policy Analysis in 1997. They estimated the cost of twelve of the most common mandates, including infertility treatment. Infertility treatment was estimated to increase costs between 3 to 5 percent, reflecting a cost increase in health insurance premiums of $105 to $175 annually (assuming a basic family policy costing $3,500 per year).

          Several submissions mentioned a study by John Collins, M.D., which estimates purchasers' cost of infertility benefits. This study finds that the purchaser cost of infertility benefits is $3.14 per member per year. The study further presented costs of the benefit for utilization increases of 300% and 500%. A utilization increase of 300% would result in a premium increase to $9.41 annually. If utilization increased by 500%, the annual premium would increase to $15.69. Following is a table which summarizes Dr. Collins' results as applied to premium cost for infertility benefits for companies with varying numbers of employees.

        Projected Costs / Total Premium per year
        Number of Employees Increase in Utilization
        0% 300% 500%
        1,000 $3,140 $9,410 $15,690
        5,000 15,700 47,050 78,450
        10,000 31,400 94,100 156,900
        20,000 62,800 188,200 313,800

        Highmark's actuaries estimate that the cost of mandating the full range of assisted reproductive services for Highmark's 6.5 million subscribers as outlined in Senate Bill 1183 will exceed $27,033,000 annually. This figure reflects costs to those covered by both traditional indemnity and managed care products.

        Highmark's submission elaborates,
        "Our actuarial assumptions are based on the fact that roughly 50 percent of our subscribers/members are female and the approximately one percent may be candidates for assisted reproductive services. It is also anticipated that just 10 percent of all those who may be candidates will actually access the benefit, based on medical necessity and having exhausted all other appropriate medical interventions. Further, our estimate is inclusive of all procedures enumerated in Senate Bill 1183."

        Highmark has further calculated that, "In offering coverage to its employees and their dependents, the Commonwealth contract will experience an increase in benefit costs of $816,000 annually."

        The Managed Care Association noted that U.S. dollars spent on infertility services increased from $1.6 billion in 1993 to $2.6 billion in 1996. "Such costs are passed on to purchasers, including private employers and public programs. If they do not drop coverage altogether because of the mandate, private employers would be forced to pass such costs on to employees in the form of higher out-of-pocket costs."

        The Managed Care Association also included the results of a February, 1998 study commissioned by the AFL-CIO and prepared by the Lewin Group. This study found that the decline of employer-based coverage is the result of higher health insurance premiums for employers who are forced to shift such costs to employees. The study indicated that growing insurance premiums reduced the number of Americans with employer-sponsored coverage by 6 million persons. Further, the analysis estimates that average premiums paid by workers for family coverage increased 146 percent between 1988 and 1996.

        Overall, the estimates for how much the proposed mandate would result in increasing the benefits costs of purchasers vary from Milliman and Robertson's $105 to $175 to the lower figures arrived at by the Collins study, $3.14 to $15.85 annually. When viewed on a per person per year basis, the amounts do not seem overwhelmingly high. When viewed on a cumulative basis, their impact is seen to be more significant. As Milliman and Robertson's chart points out, the effect of adding all twelve of the most popular mandates results in as much as a 30% increase in purchaser costs. A 1990 survey of the literature by the National Bureau of Economic Research found that the cost of mandated benefits is usually borne by employees in the form of reduced wages, reduced work hours or loss of employment. While mandated benefits mean that people with health insurance have more health care options, they also mean that fewer people are insured. When employers who canceled their employees' health insurance policies have been polled on why they did so, the majority claimed that it was because the price was too high. Lower income employees are most likely to lose coverage. Consumers may be forced into purchasing very expensive benefits or not purchasing any coverage at all.

      4. The impact of the proposed benefits on the total cost of health care within the Commonwealth.

        Council's estimate for the total impact of Senate Bill 1183 within the Commonwealth, reviewed in detail earlier in this report, is a minimum impact of about $44-$49 million (with costs potentially going as high as $123 million if utilization reflects the increases seen in Massachusetts). As noted previously, this figure is based on the cost of assisted reproductive technologies only and does not include additional cost for other infertility services. Insufficient information was included to estimate a dollar figure for increased utilization of fertility drugs or other treatments. Nor does the $44-$49 million figure include the cost associated with an increased frequency of multiple births. Insufficient information was received to calculate a possible savings from a decrease in tubal surgeries.

        Highmark's submission included actuarial estimates of the cost of mandating the full range of assisted reproductive services outlined in SB 1183. Highmark's actuaries estimated the total cost across Pennsylvania, including the insured populations of Highmark, the Pennsylvania Blue Cross Plans and commercial insurers, to be $51,963,000. Highmark's figures are comparable to Council's estimate of $44,000,000 as a minimum figure which includes only assisted reproductive technology procedures and not the full range of infertility benefits.

        Dr. William Panak views the impact to the cost of health care to the Commonwealth from a different perspective. His submission contends that the overall cost will not increase, but that costs will only "shift some costs from out of pocket expenses of individuals to covered benefits that are spread across all persons within an insurance plan."

        In considering the cost of the proposed benefits on the total cost of health care within the Commonwealth, it is important to consider potential indirect costs to the Commonwealth. The Department of Insurance expresses concern that, while the services provided under mandated benefits may be important, the trend toward increasing mandated benefits has a negative impact on the consumers and purchasers of health insurance. The major concerns are:

        • they create an uneven competition between fully insured and self-insured employers and between Pennsylvania's employers and employers in other states;
        • they have a disproportionate effect on small employers and individuals purchasing health insurance;
        • they reduce employer and consumer flexibility in choosing the most appropriate and affordable benefits;
        • they increase the overall cost of health insurance;
        • they can lead to the loss of insurance coverage for Pennsylvanians, thereby increasing the overall uninsured rate in the Commonwealth. A 1997 Lewin study found than every 1% increase in health insurance premiums results in an increase of 400,000 more uninsured Americans.

        All of these factors combined disadvantage Pennsylvania's employers and hinders Pennsylvania's ability to attract new employers. Of equal importance is the impact on the consumer who will ultimately bear the cost of these mandates.

Other Policy Considerations

Americans with Disabilities Act

Several submissions by supporters of SB 1183 have noted that the Americans with Disabilities Act may provide a platform for infertile couples to claim that lack of coverage for infertility constitutes discrimination under the Act. The question revolves around whether reproduction is a "major life activity" under the Act. If so, then an impaired ability to reproduce may qualify as disability under the ADA. To date, courts have split on whether infertility qualifies as a disability because they have disagreed as to whether reproduction constitutes a "major life activity". RESOLVE's submission discussed the relevant cases. On June 26, 1998, the Supreme Court ruled that reproduction is a major life activity. In the case of Bragdon v. Abbot, the court heard arguments regarding Abbott's claim that a dentist discriminated against her under the ADA when he refused to treat her because she is HIV positive. The plaintiff argued that her substantially limited ability to reproduce because of her HIV status gave her protection from discrimination under the ADA. The court ruled that reproduction is a major life activity and that someone who is HIV positive is substantially limited in his or her ability to reproduce.

The New York State Task Force on Life and the Law has issued a report, Assisted Reproductive Technologies, which was released in April 1998. In discussion of this issue, the report points out that even if the infertile are disabled under the ADA, the ADA does not prohibit insurance distinctions based on underwriting risks as long as the distinctions are not used as "subterfuge" for discriminatory activity not justified by risks or costs associated with the disability. The discussion concludes, "Under this definition, even if infertility constitutes a disability under the ADA, employers could still exclude insurance coverage for assisted reproduction by showing that 'the disability-based disparate treatment is attributable to the application of legitimate risk classification and underwriting procedures to the increased risks (and thus the increased cost to the health insurance plan) of the disability, and not to the disability per se."

Unfair Treatment in Health Coverage

Several supporters of the bill argued that the infertile were unfairly treated because, while their insurance premiums helped to pay for expenses associated with others' pregnancy, their reproductive concerns were not addressed.

From the RESOLVE of PHILADELPHIA submission:
"Married couples suffering from infertility are considered a family and pay similar premiums as married couples with children. The premiums collected pay for the prenatal and maternity care of fertile couples, but not for the medical treatments that pose the only hope for infertile couples to bear children. This inequity goes far beyond infertile policyholders subsidizing reproductive-related benefits for the fertile population. This inequity is tantamount to discrimination because all other things being equal, fertile policyholders receive more benefits than infertile policy holders under the same insurance plan."
The national RESOLVE's submission comments,
"Most insurance plans do cover the costs of pregnancy and childbirth. Those experiencing infertility pay insurance premiums and help to cover the maternity cost for other members of the plan. They should also be able to obtain care for themselves so that they too can have a child."

Others believe this to be an unconvincing argument. The very nature of insurance is that everyone's premium is being used to underwrite costs that have not been incurred by the payer of the premium. The Insurance Federation comments, "Does covering the damages to a homeowner who suffers a house fire discriminate against those who don't have a fire? Of course not....In every insurance arrangement the people who avoid the expenses insured against subsidize the costs or damages of the members of the pool who incur them. That is not discrimination it's the risk sharing principle of insurance."

Other Considerations

Several submissions by opponents of SB 1183 argued that controversial issues are raised by the inclusive language of the legislation. The definition of infertility does not differentiate by age or any other way. As written, post menopausal women, persons who have undergone voluntary sterilization, surrogates, habitual aborters and unmarried couples would have in vitro procedures covered by insurance.

There are a number of other ethical issues involved in the debate which are not addressed in the legislation. Critical unanswered questions are whether infertile couples have the right to use the gametes or bodies of others, whether single people are included in the intent of the legislation. Who should have access to the procedure - only childless couples? Only couples with a good chance of success?

Conclusions

While the Council recognizes the burden infertility places on Pennsylvanians and their family members, we did not receive sufficient evidence that mandating coverage of comprehensive infertility benefits is of proven efficacy or cost-effectiveness.

Council staff found the following: