By Lara Cartwright-Smith

A previous Implementation Brief reviewed the provisions of Affordable Care Act (ACA) that restrict the use of federal funds for insurance coverage of abortion services. The ACA prohibits federal funds from being spent for coverage that includes abortion in the individual and group health plans sold in state Exchanges and it requires plans participating in an Exchange that offer abortion coverage to collect a separate premium from beneficiaries for that coverage and to pay for abortion-related services out of those segmented funds. The ACA also allows states to prohibit abortion coverage entirely for health plans sold through an Exchange. Finally, the law prohibits qualified health plans from “discriminating against” any health care provider or facility because of an unwillingness to provide, pay for, cover, or refer for abortion services (with no comparable protection for entities that do provide, pay for, cover, or refer for those services).

State Legislation

Immediately after the ACA was enacted, many state legislatures began to consider and pass laws prohibiting the sale of plans that covered abortion in their state’s Exchange. As of the time of the posting of this Update, thirteen states have passed bans specific to their state Exchange,^[1] six of these thirteen states have also banned the sale of non-Exchange private insurance coverage for abortion,^[2] and two additional states have broad bans on private coverage of abortion that would include plans in an Exchange (although the laws don’t specifically reference Exchanges).^[3] Thus, a total of fifteen states prohibit plans that participate in Exchanges from including abortion coverage.^[4] Many of these laws were enacted in April and May of 2011,^[5] indicating a trend in state legislatures to restrict both public and private funding of abortion. These are in addition to laws that many states have restricting insurance coverage of abortion for state employees.^[6]

Federal Legislation

Many bills have been introduced in Congress since the beginning of 2011 that seek to restrict access to or funding for abortion services. Several of these specifically seek to restrict insurance that covers abortion services,^[7] including both public insurance and insurance paid for with private funds (usually including the typical federal exceptions for abortions in case of rape, incest, or endangerment of the pregnant woman’s life and also often including provider “conscience” protection^[8]). These bills include:

• the No Taxpayer Funding for Abortion Act (H.R. 3), also introduced in the Senate as S. 906.^[9] Of the bills discussed here, H.R. 3 has moved the farthest in the legislative process and is also the most expansive in its application to private funding. The bill was passed by the House on May 4, 2011. H.R. 3 would prohibit the use of federal funds to pay for abortion services or for any health plan that provides abortion services, except in cases of rape, incest, or life endangerment. It would prohibit the inclusion of abortion as a health care service furnished by a federal or District of Columbia health care facility or by any physician or other individual employed by the federal government or the District. With respect to private spending, the bill would prohibit tax credits and tax deductions for amounts paid for abortion services. Specifically, it would include any reimbursement received for an abortion from a tax-exempt cafeteria plan, Archer Medical Savings Accounts (MSAs), and health savings accounts (HSAs) in the individual’s gross income for tax purposes and would not allow the costs of abortion services to count as a deductible medical expense. (Essentially, the bill ensures that money used for an abortion is considered taxable income.) The bill would also exclude from the definition of “qualified health plan” any plan that covers abortion for purposes of premium assistance tax credits and small employer health insurance tax credits, essentially preventing individuals and small employers who receive such credits from purchasing a plan that includes abortion coverage.
• the Protect Life Act (H.R. 358).^[10] This bill would amend the ACA to prohibit federal funds from being used to cover any part of the costs of any health plan that includes coverage of abortion services. Among other provisions, it would require any qualified health benefit plan offered through an Exchange that includes coverage for abortions to also offer an otherwise identical plan that it does not cover abortions. It would also require the Director of the federal Office of Personnel Management (OPM) to ensure that no multistate qualified health plan offered in an Exchange provides coverage of abortion services.
• the Indian Healthcare Improvement Act of 2011 (H.R. 536).^[11] This extensive bill relating to Native American and Native Hawaiian health care includes a “miscellaneous” provision that would prohibit federal funds authorized or appropriated under the Act from being used to pay for any abortion or to cover any part of the costs of any health plan that covers abortion.
• a bill “To amend the Internal Revenue Code of 1986 to eliminate certain tax benefits relating to abortion” (H.R. 1232).^[12] Similar to H.R. 3’s tax provisions, this bill would disqualify any amounts paid for an abortion as a medical expense tax deduction, exclude any plan that includes abortion coverage from the definition of “qualified health plan” for purposes of tax credits for premium assistance and the small employer tax deduction, and include any spending for an abortion in an individual’s gross income for purposes of HSAs.
• the Welfare Reform Act of 2011 (H.R. 1135).^[13] Among other reforms, this bill would prohibit the expenditure of federal funds, and funds in any trust fund to which funds are authorized or appropriated by federal law, for abortions, prohibit funding for health benefits plans that cover abortion, and prohibit any tax credit for amounts paid or incurred for an abortion or for a health benefits plan (including premium assistance) that includes coverage of abortion.

Developments to Watch

This Update was prepared on June 20, 2011. As states continue enacting legislation implementing health insurance Exchanges, more may include bans on abortion coverage. The Department of Health and Human Services is expected to release proposed regulations in July 2011 addressing the establishment of Exchanges, and the regulations may address abortion coverage. Also, the Senate may debate its version of H.R. 3. Finally, a topic of much current debate is the issue of Medicaid funding for family planning services received from providers who also provide abortion services.^[14] That debate is likely to keep the question of “funding” for abortion services, which may be considered to include tax credits and deductions for private spending, a hot topic.