UPDATE 1-Health insurers question Obama birth control plan

By Lewis Krauskopf

Feb 10 (Reuters) - U.S. health insurers said on Friday they feared President Barack Obama had set a new precedent by making them responsible for providing free birth control to employees of religious groups as he sought to defuse an election-year landmine.

Obama on Friday announced the policy shift in an effort to accommodate religious organizations, such as Catholic hospitals and universities, whose leaders are outraged by a new rule that would have required them to offer free contraceptive coverage to employees.

Instead, the Obama administration ordered insurers to provide workers at religious-affiliated institutions with free family planning if they request it, without involving their employer at all. Insurance industry officials said the abrupt shift raised questions over how that requirement would be implemented.

"We are concerned about the precedent this proposed rule would set," said Robert Zirkelbach, spokesman for America's Health Insurance Plans, the industry's trade group. "As we learn more about how this rule would be operationalized, we will provide comments through the regulatory process."

Zirkelbach said insurers "have long offered contraceptive coverage to employers as part of comprehensive, preventive benefits that aim to improve patient health and reduce health care cost growth."

Employers who have signed on for such health plans in the past paid part of the cost of birth control prescriptions, while their employees also bore some of the expense through co-payments.

Aetna, the third-largest U.S. health insurer, said that it would comply with the policy but needed "to study the mechanics of this unprecedented decision before we can understand how it will be implemented and how it will impact our customers."

An Aetna spokeswoman said the company "did not have any direct input into the actual policy decisions that were made."

When asked about the insurer concerns, the White House cited a report from the U.S. Health and Human Services Department that estimates the costs of providing free birth control can be offset by reducing expenses associated with unintended pregnancies.