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Coverage for Abortion Services and the ACA

Federal and State Laws Regarding Coverage of Abortion Services

Since 1977, federal law has banned the use of any federal funds for abortion, unless the pregnancy is a result of rape, incest, or if it is determined to endanger the woman’s life. This rule, also known as the Hyde Amendment, is not a permanent law; rather it has been attached annually to Congressional appropriations bills, and has been approved every year by the Congress. The Hyde Amendment initially affected only funding for abortions under Medicaid, but over the years, its reach broadened to limit federal funds for abortion for federal employees and women in the Indian Health Service. Until recently, insurance coverage of abortion for women in the military had been even more restricted so that pregnancies resulting from rape or incest were not covered. In early 2013, an amendment to the National Defense Authorization Act expanded insurance coverage to include abortions of pregnancies resulting from rape or incest.1 There is still a ban on federal funds to pay for abortions in other circumstances and abortions still cannot be provided at any military treatment facility except in cases of life endangerment, rape or incest. 

State level policies also have a large impact on how insurance and Medicaid cover abortions, particularly since states are responsible for operation of Medicaid programs and insurance regulation. The Medicaid program serves millions of low-income women and is a major funder of reproductive health services nationally. Approximately two-thirds of adult women on Medicaid are in their reproductive years.2 As discussed earlier, the federal Hyde Amendment restricts state Medicaid programs from using federal funds to cover abortions beyond the cases of life endangerment, rape, or incest. However, if a state chooses to, it can use its own funds to cover abortions in other circumstances. Currently, 17 states use state-only funds to pay for abortions for women on Medicaid in circumstances different than those federal limitations set in the Hyde Amendment.3 In 32 states and the District of Columbia, Medicaid programs do not pay for any abortions beyond the Hyde exceptions (Appendix 1).

The ACA reinforces the current Hyde Amendment restrictions, continuing to limit federal funds to pay only for abortions to terminate pregnancies that endanger the life of the woman or that are a result of rape or incest (Table 1). State Medicaid programs continue to have the option to cover abortions in other circumstances using only state funds and no federal funds. President Obama issued an executive order as part of health reform that restated the federal limits specifically for Medicaid coverage of abortion.4 The law also explicitly does not preempt other current state policies regarding abortion, such as parental consent or notification, waiting period laws or any of the abortion limits or coverage requirements that states have enacted.

In the private insurance sector, where states have the authority to regulate plans that are issued in the state, 9 states impose restrictions on the circumstances under which insurance will cover abortions in Medicaid, Marketplace plans, and private insurance (Figure 1 and Appendix 1).5 Some states follow the same restrictions as the federal Hyde Amendment for their private plans, while some are more restrictive. Oklahoma has exceptions for cases of rape, incest involving a minor, or to save the woman’s life. Utah has exceptions to save the life of the mother or avert serious risk of loss of a major bodily function, if the fetus has a defect as documented by a physician that is uniformly diagnosable and lethal, and in cases of rape or incest. However, six states (Idaho, Kansas, Kentucky, Missouri, Nebraska, and North Dakota) have an exception only to save the woman’s life. Michigan only allows abortion coverage when the abortion increases the probability of a live birth, preserves the life or health of the child after live birth, or to remove a fetus that has died as a result of natural causes, accidental trauma, or a criminal assault on the pregnant woman.6 Five states had these laws on the books prior to the ACA, and four more states have passed new laws banning private plan coverage post-ACA. While eight of these states allow insurers to sell riders for abortion coverage on the private market, there is little evidence about their availability and no documentation of their cost or impact on access. Utah does not allow riders to be sold for abortion coverage.

Figure 1: State Policies on Abortion Coverage in Medicaid and Private Insurance

Figure 1: State Policies on Abortion Coverage in Medicaid and Private Insurance

Because the ACA explicitly prohibits states from including abortion in any essential benefits package, states or insurers offering plans in a state Marketplace will not be required to offer abortion coverage. The ACA also stipulates that each state Marketplace must include at least one plan that does not cover abortions beyond those permitted by current federal law. States can also pass laws that bar all plans participating in the state Marketplace from covering abortions, which 24 states have done since the ACA was signed into law in 2010. Most states include narrow exceptions for women whose pregnancies endanger their life or are the result of rape or incest, but two states (Louisiana and Tennessee) do not provide for any exceptions.7 The ACA prohibits plans in the state Marketplaces from discriminating against any provider because of “unwillingness” to provide abortions.

In states that do not bar coverage of abortions on plans available through the Marketplace, insurers may offer a plan that covers abortions beyond the federal limitations, but this coverage must be paid for using private, not federal, dollars. Plans must notify consumers of the abortion coverage as part of the summary of benefits and coverage explanation at the time of enrollment. The ACA outlines a methodology for states to follow to ensure that no federal funds are used towards coverage for abortions beyond the Hyde limitations. Any plan that covers abortions beyond Hyde limitations must estimate the actuarial value of such coverage by taking into account the cost of the abortion benefit (valued at least $1 per enrollee per month). This estimate cannot take into account any savings that might be achieved as a result of the abortions (such as prenatal care or delivery).8

Furthermore, the federal rules stipulate that plans that offer abortion coverage and receive federal subsidies (it is believed that all plans in the state Marketplace will receive at least some federal subsidies) need to collect two premium payments, so that the funds go into separate accounts. One payment would be for the value of the abortion benefit and the other payment would be for the value of all other services. The funds are to be deposited in separate allocation accounts, overseen for compliance by state health insurance commissioners.  Multi-state health insurance plans offered through state Marketplaces are prohibited from offering abortion coverage beyond Hyde Amendment restrictions so that individuals in all states will have a choice of enrolling in a plan that does not cover abortion if they so choose.

Table 1: Summary of Abortion Provisions in the Patient Protection and Affordable Care Act (P.L. 111-148)
Benefit Design
  • Abortion coverage is prohibited from being required as part of the federally-established essential benefits package;
  • States can prohibit coverage for any abortions by all plans in their state Marketplace;
  • At least one plan within a state Marketplace must not cover abortions beyond those permitted by federal law (to save the life of the woman and in cases of rape and incest);
  • Private Plans: Can provide a plan in the state Marketplace that covers abortions beyond those permitted by federal law as long as they comply with the requirement to segregate federal funds.
Financing
  • Federal law only permits federal funds to be used to pay for abortions when the pregnancy is a result of rape or incest or is a medical threat to the woman’s life. States can use state-only funds to pay for “medically necessary” abortions beyond federal requirements under Medicaid or to pay for abortion coverage in plans offered in a state Marketplace;
  • Federal subsidies (for premiums or cost sharing) are prohibited from being used for coverage for abortions beyond those permitted by federal law;
  • In order to segregate funds, plans that choose to offer coverage for abortions beyond Hyde limitations must estimate the actuarial value of covering abortions by taking into account the cost of the abortion benefit (valued at least $1 per enrollee per month) and cannot take into account any savings that might be gained as a result of the abortions. Any state Marketplace plan that covers abortions and includes enrollees that receive federal subsidies must collect two separate premium payments from all enrollees – one payment for the value of abortion benefit and one payment for the value of all other covered services.
State Role
  • The ACA has no effect on state laws regarding coverage, funding or procedural requirements on abortions, such as parental notification/consent laws;
  • States can prohibit plans in a state Marketplace from covering any abortions, even if the pregnancy is a result of rape or incest or a threat to the women’s life;
  • State-level health insurance commissioners monitor and oversee payment segregation requirements for the purchase of plans within their respective state Marketplaces.
Discrimination/ Protection
  • Plans participating in the state Marketplace are prohibited from discriminating against any provider because of unwillingness to provide, pay for, provide coverage of, or refer for abortions.

Impact of the Affordable Care Act on Health Coverage for Women The Availability of Abortion Coverage to Women Newly Eligible Under the ACA

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