Regulating Healthcare = Regulating Religion

Libertarians often emphasize that the distinction between personal liberties and economic liberties is a phantom one, because restrictions on economic liberty inevitably affect the personal sphere. Here’s an outstanding example: The California Supreme Court has ruled that the Catholic Church must provide birth control in its employees’ health plans.

SAN FRANCISCO (AP) 3.1.04, 11:50a -- A Catholic charitable organization must include birth control coverage in its health care plan for workers even though the nonprofit is morally opposed to contraception, the California Supreme Court ruled Monday.
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The high court said Catholic Charities is no different than other businesses in California, which is one of 20 states that require company-provided health plans to include contraception coverage. In California, "religious employers" such as churches are exempt from the requirement.

When the state starts meddling with the terms of contracts, as it does when it dictates the contents of health plans, entanglement with personal liberties, including freedom of religion, is sure to follow. The state can either (a) treat religious enterprises just like other enterprises, as the California high court has done, or (b) make a special exemption for religion, which puts the state in the position of deciding what a religion is and what its defining doctrines are (e.g., is opposition to contraception really inseparable from Catholic doctrine?). I'm curious to know whether abortion coverage is also required under state law.

In an earlier post, I argued that, when it comes to subsidies for education and other activities, the state ought to adopt a neutral policy that does not require it to decide what is religion and what is not. But in this case, we are not talking about the provision of a benefit by the state, but the imposition of a regulatory burden with the potential to interfere with free exercise. Forced to choose the lesser of two evils, I would reluctantly take option (b) above, as it provides at least a limited opportunity for people to escape the state’s regulations when they conflict with conscience. But it is the state’s unjustified regulatory policy that generates the need to choose between evils.