By Susan T. Muskett, J.D., Senior Legislative Counsel
On Christmas Eve 2009, ObamaCare passed the Senate after Senate Majority Leader Harry Reid secured the last needed vote from Senator Ben Nelson of Nebraska. Part of the “deal” that Senator Nelson negotiated included a requirement that Exchange plans that cover elective abortion must collect a separate payment from enrollees for the abortion coverage, and deposit it into a separate account to be used to pay for elective abortions. An “Exchange” is a marketplace for the purchase of health insurance. ObamaCare requires an Exchange to be established in every state by 2014.
Federal premium subsidies and cost-sharing would not be placed in the abortion account.
There is now new evidence that the statutory requirement for “separate payments” will be flouted. Insurers will not be required to collect the “separate payment” for abortions or even give enrollees an itemized bill setting forth the abortion surcharge, resulting in enrollees being kept in the dark about the hidden abortion fee and its cost.
Despite the clear language of the ObamaCare statute, it appears that the “separate payments” requirement is not going to be enforced by the Obama Administration. Gretchen Borchelt, director of state reproductive health policy at the National Women’s Law Center, told the Huffington Post that “we used to talk about it as being two checks that the consumer would have to write because of the segregation requirements, but that’s not the way it’s being implemented.” (Huffington Post, Sept. 3, 2013). Likewise, a spokeswoman for Rhode Island’s Exchange told PolitiFact Rhode Island that “the customer is not billed a separate fee.” (Politifact, Oct. 2, 2013.) As PolitiFact notes, “it turns out to be a hidden fee.”
From a pro-life perspective, even if the original Nelson understanding of two payments had been effectuated, it would not have mitigated the fact that massive federal premium subsidies will flow to Exchange plans that cover elective abortion (a sharp departure from the longstanding policy of the Hyde Amendment), and that every enrollee in the plan will have a portion of the enrollee’s premium placed into a separate account for elective abortions (dubbed the “abortion surcharge”). But it is telling that part of the very “deal” that secured passage of ObamaCare – that separate payments be collected from enrollees in abortion-covering Exchange plans – will now be flagrantly flouted.
ObamaCare Statutory Language
The pertinent statutory language can be found in ObamaCare section 1303. It statutorily requires the issuers of Exchange plans that cover elective abortion to “collect from each enrollee in the plan” a “separate payment” for the type of abortions for which funding is prohibited under the Hyde Amendment (which is all abortions other than in cases of life of the mother, rape, or incest) and a “separate payment” for all other services. The statute then stipulates that the insurer is to “deposit all such separate payments into separate allocation accounts.” Federal premium and cost-sharing subsidies are to be deposited into the account that covers services other than elective abortion. [42 U.S.C. 18023(b)]
History Behind the Statutory “Separate Payments” Provision
On a Friday night back in December 2009, Senate Majority Leader Reid was in tense negotiations with then-Senator Nelson of Nebraska, as Reid desperately needed Nelson’s vote to secure Senate passage of ObamaCare. Finally, Nelson had what Politico described as a “breakthrough” that lead to a deal, as Politico reported a few days later. Part of the deal, Politico wrote, was that “people who receive federal subsidies would need to write two separate checks as a way to ensure that none of the federal dollars went toward the abortion premium.”
Six days later, Senator Nelson took to the Senate floor to explain in detail the deal he had negotiated. With respect to the two check requirement, Senator Nelson said:
“[I]n the Senate bill, if you are receiving Federal assistance to buy insurance, and if that plan has any abortion coverage, the insurance company must bill you separately, and you must pay separately from your own personal funds–perhaps a credit card transaction, your separate personal check, or automatic withdrawal from your bank account– for that abortion coverage. Now, let me say that again. You have to write two checks: one for the basic policy and one for the additional coverage for abortion. The latter has to be entirely from personal funds.” [155 Cong. Rec. S14134 (Dec. 24, 2009)].
At the time, the Washington Post quoted Cecile Richards, president of the Planned Parenthood Federation of America, as saying, “The absurdity of requiring these two separate checks doesn’t accomplish anything toward the supposed goal of segregating federal funds. . . . It just creates additional hoops for insurance companies . . . and more administrative burdens and obstacles for women to get the coverage they need.” Likewise, a NARAL factsheet bemoaned the Nelson language: “Requiring individuals to write two checks in order to purchase coverage that includes a benefit–abortion services . . . is a new, unnecessary hassle. . . . these burdens could severely limit women’s ability to obtain abortion coverage within the exchange.”
In addition to NARAL and Planned Parenthood, the Center for Reproductive Rights wrote critically of the Act’s separate payment requirement. In a March 23, 2010, factsheet, the Center for Reproductive Rights wrote:
“The Act requires all enrollees in an insurance plan that covers abortion to make two separate payments – an initial payment that covers the bulk of the policy, and a completely separate payment to purchase coverage for abortion care beyond cases of rape, incest or a threat to the life of the pregnant women. Because these payments do not actually involve federal dollars, and providers can segregate funds once they receive them, this additional requirement is actually a stigmatizing procedural gimmick, rather than a true funding firewall.”
The ObamaCare implementing regulation tracks the statutory language and requires the issuer of an Exchange plan that covers elective abortion to “collect” from each enrollee a “separate payment” for elective abortion, a “separate payment” for all other services, and to “deposit all such separate payments into separate allocation accounts.” [45 CFR 156.280(e)]
During the regulatory process, commenters questioned HHS on how this was to be implemented. According to HHS, the commenters “recommended that HHS clarify . . . whether [Exchange plan] issuers may satisfy the separate payment provision by providing each enrollee with an itemized bill, and whether an enrollee’s coverage would be terminated for failure to comply with the separate payment provision.” Rather than doing so, HHS merely said that the comments would be taken into consideration in any future guidance. [77 Fed. Reg. 18430 (March 27, 2012)].
The implementing regulation requires every issuer of an Exchange plan to annually attest “that the plan has complied with section 1303 of the Affordable Care Act and applicable regulations.” [45 CFR 165.280(e)(5)(iii)]. Of course, to comply with all of section 1303, and the implementing regulation, an issuer of any Exchange plan that covers elective abortion would have to “collect” from each enrollee the statutorily required “separate payments.”
Back in June 2012, the National Association of Insurance Commissioners’ Health Insurance and Managed Care Committee adopted a white paper as guidance for the states. In it, the committee took the position that insurers could satisfy the separate payments requirement by issuing an itemized bill setting forth the separate costs, but allowing the enrollee to make payment through a single transfer of funds. The 2012 guidance stated:
“The ACA requires QHPs to segregate funds in a separate allocation account to pay for coverage of certain elective abortion services that cannot be paid for with federal funds. A QHP issuer satisfies this requirement if it issues an itemized bill that separates the costs of abortion coverage from the costs of all other coverage, collects the required separate payments through a single transfer of funds in response to the itemized bill, and maintains ‘allocation accounts’ in line with current industry practice. . . . QHPs must also submit a plan to the state insurance commissioner that details its process and methodology for complying with these requirements.”
The NAIC’s interpretation of “separate payments” to allow payment through a single transfer of funds is inconsistent with the statute’s instructions that for coverage paid through employee payroll deposit, “the separate payments required under this subparagraph shall each be paid by a separate deposit.” (emphasis added). But regardless, some state insurance commissioners are now telling insurers that they don’t even have to issue an itemized bill to enrollees setting forth the separate costs of the elective abortion coverage from the costs of the other services (see discussion below regarding state implementation).
But this is flagrant violation of the clear statutory language. And if an issuer of an Exchange plan is not going to comply with this statutory requirement, how can such an issuer attest in good faith to federal or state authorities that they have complied with section 1303 of the Affordable Care Act, as regulation 45 CFR 165.280(e)(5)(iii) requires?
By billing enrollees for one cost, rather than the separate costs, insurers could have greater financial flexibility to move funds into the abortion account should it run low.
Moreover, many consumers are having great difficulty determining which plans cover abortion on the ObamaCare Exchanges. By flouting this statutory requirement, but continuing to segregate premium money into a special fund designated for elective abortions, many enrollees likely won’t even know they are paying for abortion coverage; the “abortion surcharge” becomes a hidden fee for which the enrollee is unawares; and the cost of the abortion surcharge remains hidden.
Congressman Chris Smith (R-NJ), Chair of the House Pro-Life Caucus, has introduced the Abortion Insurance Full Disclosure Act (H.R. 3279), to require full disclosure of an Exchange plan’s coverage of abortion, as well as separate disclosure of the plan’s abortion surcharge. At the time of the bill’s introduction, Smith’s press release said that “this is crucial information for millions of Americans since the many plans that include elective abortion are required by law to impose a monthly mandatory abortion surcharge. Many Americans object to paying a surcharge into a fund to be used solely for the purpose of aborting unborn babies.”
Despite the explicit statutory language, some state insurance commissioners are advising insurers that the state will not require them to collect the separate payments from enrollees, nor to even issue an itemized bill setting forth the separate costs.
Maryland’s Insurance Commissioner issued a bulletin to insurers on July 31, 2013, that requires issuers to have a segregation plan for abortion services, but asserts that “issuers are not required to provide enrollees with separate invoices for non-excepted abortion services and all other services covered under a QHP [Exchange plan], nor to provide enrollees with itemization on a single invoice for non-excepted abortion services and all other services covered under a QHP.”
New York State’s Department of Financial Services issued guidance to insurers on September 18, 2013 stating that:
“QHP issuers that cover non-excepted abortion services must collect in the premium for each enrollee a payment for non-excepted abortion services. . . . The ACA permits QHP issuers to collect premiums for non-excepted abortion services and all other services in one transfer of funds. . . . QHP issuers will be in compliance with the ACA if they do not itemize non-excepted abortion services on the premium bill and collect both premiums through a single transfer of funds.” (emphasis added).
Washington State adopted a regulation stating that Exchange plan issuers must segregate funds for elective abortion, but “[t]his rule does not require an issuer to conduct two separate premium transactions with enrollees. [Note, nor does the regulation require an itemized bill]. For purposes of approval by the commissioner, the segregation of premium may occur solely as an accounting transaction.” [WAC 284-07-540].
Regardless of the fact that state officials will not “require” insurers to comply with all of Section 1303, insurers are nevertheless required to do so by ObamaCare’s statutory section 1303 and its implementing regulation. To do otherwise will keep millions of Americans in the dark about the existence and cost of the abortion surcharge.