Abortion Coverage and High-Risk Insurance Pools

Today, the Administration issued rules concerning coverage of abortion services through government-established, high-risk insurance pools¹ created by the new health care law. As you may be aware, the high-risk pool is a temporary measure established for people whom insurers have denied coverage due to a pre-existing medical condition. Under the rules promulgated by the Administration, insurance offered through these temporary high-risk pools will not cover abortions except in the case of rape, incest, or to save the life of the mother—so-called “Hyde abortions.”² In 2014, these high-risk pool plans will cease to exist and will be replaced by plans offered through an insurance exchange.

Some in the pro-choice community are disappointed by the issuance of these limitations, and have criticized the move, arguing that nothing in the language of the statute required the Administration to take this action for this particular government-run insurance policy. Many progressive policymakers have asked Third Way to take a look at the regulations with respect to the underlying law and federal precedents on abortion and to give our assessment of the merits and fairness of these Administration rules.

After carefully reviewing the law and regulations, we believe the decision to limit coverage of abortion services in the high-risk insurance pools to Hyde abortions reflects the spirit and letter of the health care law that was passed, as well as the accompanying Executive Order on abortion that was signed by the President.

Here are our reasons:

1. Federal funds cannot be used for non-Hyde abortions. One of the key principles guiding abortion coverage in the health care law is that no federal funds can be used to pay for abortion services, except for those within the Hyde exception. The high-risk pools are completely federally funded. So while there is no specific legislative provision limiting coverage of abortion in the pools, it is fundamentally consistent with this principle to apply to the pools the same limitations that accompany federal funds in other areas of the health care law—such as plans offered and subsidized in the exchange
2. The high-risk pools are not like Medicaid. Under current law, Medicaid is funded through contributions from both the federal government and states. Because of this funding formula, states have great flexibility to tailor health plans to their whims, within certain parameters. States often decide to cover elective abortions through Medicaid, BUT they must use their own funds to pay for any non-Hyde abortions. Under the Hyde amendment which first passed over 30 years ago, federal funds are expressly prohibited for use for such purposes. But unlike the Medicaid system, the high-risk pools created by the health care law operate only with federal contributions—no state money is involved. In fact, even in states that have decided to administer the high risk pools themselves, the federal government is both paying the health claims and also reimbursing the states for administrative costs. This limits the flexibility of the coverage that can be offered through the pools. The Administration’s actions will apply the same rules to federal contributions in the high-risk pools as currently apply to federal contributions to Medicaid. However, we believe states would still be free to create or use their own, non-federally financed pools to provide abortion coverage with their own money, if they so choose
3. The high-risk pools more closely parallel the FEHBP. The high-risk pools are run with federal money and by federal rules, creating a situation that is analogous in many ways to the current Federal Employees Health Benefits Program (FEHBP). In fact, in the 22 states that have opted to let the federal government administer their high-risk pools directly, the US Office of Personnel Management will be operating the pools, and doing so on the same terms as it applies for federal employees. No FEHBP plan is allowed to cover non-Hyde abortions. It should be noted that under FEHBP, even though federal employees pay 28% of the health care premiums for their plans, FEHBP insurance still cannot cover non-Hyde abortions. The rules the Administration has devised with respect to the high-risk pools mirror that same policy
4. This action does nothing to change the rules for private insurance plans. Unlike some policies that were under discussion during the health care debate, the rules issued by the Administration for the high-risk pools do nothing to change the law for private insurance companies. For example, the Stupak amendment, which wasn’t adopted in the final version of reform, would have limited the ability of consumers to use their own money to buy private insurance plans that covered abortion. The Administration’s prohibition of federally financing non-Hyde abortions in the high-risk pools does not restrict consumers from purchasing private insurance plans with abortion coverage—as long as they are using their own money.

After a careful review of the law and the comparable programs, we believe that the rules issued by the Administration limiting abortion coverage in the high-risk pools were well-considered and appropriate. A case can be made that the Administration was not compelled to issue such rules, since there was no specific language in the health care law forbidding coverage of non-Hyde abortions in the pools. But while some (including Third Way) are not particularly enamored with the Hyde rule, we concede that by taking this action limiting abortion coverage in the pools, the Administration has applied existing federal law and precedent and followed the spirit and principles of the health care law’s attempt to achieve abortion neutrality.