Memo|Social Issues   5 Minute Read

Understanding the "No Taxpayer Funding for Abortion Act"

Published January 22, 2014

Updated On January 23, 2017

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During 2010’s heated debate over health care reform, some of the most vitriolic exchanges revolved around the issue of federal funding for abortion. After months of negotiation, pro-life and pro-choice members of Congress joined together to pass a bill that created a new set of restrictions around abortion funding, including requiring private insurance companies to separate private premiums from federal subsidies in the exchange system and ensure that only the private premiums are allowed to pay for abortion services.

In addition to these new limitations, at the behest of pro-life members of Congress, President Obama issued an Executive Order concurrent with the signing of the health care legislation, reiterating that federal funds may not be used to cover abortion services in the health care reform legislation. Both the language of the new health care law and the Executive Order made clear the principle agreed to by both sides in the health care debate: federal funds may not be used to pay for abortion, except in the cases of rape, incest, or to save the life of the woman.

Now, some in Congress are hoping to win political points by raising this issue again—despite the rancor it engendered in the last two Congresses—and trying to end the détente that was negotiated in 2010 and agreed to by pro-life and pro-choice members alike. Recently, several members of Congress have introduced an updated version of the “No Taxpayer Funding for Abortion Act.” Among other things, this bill would prohibit Americans who purchase insurance in the exchanges from using their own private premiums to buy health plans that include abortion coverage—a restriction that was soundly rejected during the 2010 debate.

 There are four reasons that we believe Congress should abide by the already-negotiated compromise and refuse to take up the recently introduced “No Taxpayer Funding for Abortion Act.”

1. It would open up a new front in the war over abortion in health care. 

The provisions in the “No Taxpayer Funding for Abortion Act” extend far beyond what was even discussed during the 2010 debate over abortion in health care reform. Supporters of the bill have characterized it as merely an attempt to make permanent the current restrictions on federal funding for abortion, but the language of the bill does far more than restate current law.

In addition to imposing the restrictions described above (the so-called Stupak language), the bill would also raise taxes on small businesses that choose to use their own money to purchase health care coverage that includes abortion. Prior to the enactment of the health care law, 87% of employer-sponsored insurance plans included coverage for abortion, but the bill would make such plans ineligible for tax credits that would otherwise apply. For example, if a small business offers an insurance plan that includes abortion coverage, that business would be ineligible for the Small Business Health Tax Credit, which could be worth 35-50% of the cost of their premiums.

This change would levy huge tax increases on small businesses for simply retaining the same insurance coverage they currently have.

2. There already are sufficient protections to ensure that federal funds cannot pay for abortion.

The language of the health care law was carefully crafted to ensure that federal funding could not be used to pay for abortion, and in case there was any remaining ambiguity, President Obama issued an Executive Order when he signed the law to “ensure that Federal funds are not used for abortion services.” Specifically, the related language of the health care law, which was authored by pro-life Senator Ben Nelson:

  • Requires private insurance companies operating within state health insurance exchanges to separate private premiums from federal subsidies. Only private premiums are allowed to pay for abortion services.*
  • Requires state insurance commissioners to ensure that health insurance companies in their state comply with segregation requirements.
  • Allows states to prohibit coverage of abortion in state health insurance exchanges.
  • Keeps in place existing state and federal laws regarding abortion.
  • Protects the right of conscience for individuals or entities that refuse to provide, pay for, provide coverage for, or refer for an abortion.

Except in the cases of rape, incest, or to save the life of the woman. These exceptions track the language of the Hyde amendment, the 40-year-old provision that limits federal funding of abortion to certain limited circumstances, and they apply throughout this memo.

3. The principles behind the new proposal call into question a wide range of other longstanding policies.

Taken together, the provisions in the “No Taxpayer Funding for Abortion Act” create a wholly new and extremely broad definition of what constitutes “federal funding.” In particular, the bill would reject the longstanding idea that segregating federal funds in a separate account is sufficient protection against the use of that money for barred purposes, and takes the unprecedented step of defining “federal funding” to include the benefit of a tax expenditure.

This policy stance presents serious ramifications that could potentially threaten a wide array of other activities currently governed by similar restrictions to the ones that have regulated federal funding for abortion.

For example, numerous religious organizations receive federal funds to run activities such as adoption services, homeless shelters, and food banks. These religious organizations are trusted to segregate the federal funds they receive to provide social services from private funds used for religious practice and proselytizing. Churches and religious organizations also receive tax expenditures in order to ensure a separation between church and state as protected by the Constitution.

By significantly widening the definition of federal funding to include activities that have an attenuated connection to federal funds, the bill calls into question, politically and perhaps even legally, many other areas like these where separation of funds or other mechanisms have been seen as sufficient to protect private funds from being comingled with federal monies. And by labeling tax expenditures as “federal funding,” it could even potentially threaten tax treatment for churches and other religious institutions by transforming those expenditures into government support for those entities.

4. Americans want solutions and progress——not more division.

Repeated polls have shown that Americans across the political spectrum are looking for Republicans and Democrats in Congress to work together across party lines and find common ground to create jobs, strengthen our economy, and move our country forward. The “No Taxpayer Funding for Abortion Act” would do exactly the opposite—move our country backwards in an attempt to re-litigate an issue that has caused venomous accusations in the last several years.

The issue of abortion in health care reform has been settled, and although neither pro-choice nor pro-life activists may have been pleased with the outcome, a compromise was reached and enacted. The language of the current health care law and accompanying Executive Order make clear that no federal funds will be used to pay for abortion. Members of Congress who want to rewind the conversation and go back to discussing divisive proposals that have already been put to rest—or even present new and more extreme restrictions—risk ignoring the clear wishes of the people they represent.

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