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Refresher Course: the Senate HCR Bill Bans Federal Funds for Abortions

March 5, 2010 - by Donny Shaw

Rep. Bart Stupak [D, MI-1] went on Good Morning America yesterday to say that he has the votes and is ready to sink the Senate health care bill (and the whole health care reform process in Congress) if it is not changed to match the language he added to the health care bill in the House. Stupak’s language would bar anyone buying insurance through the new Exchanges from purchasing a plan that covers elective abortions, even if they are buying the insurance plan entirely with their own money.

“If you go to Page 2069 through Page 2078 you will find in there the federal government would directly subsidize abortions, plus every enrollee in the Office of Personnel Management-enrolled plan, every enrollee has to pay a minimum of one dollar per month toward reproductive rights, which includes abortions,” Stupak said. Video here.

But he’s wrong. The Senate health care bill would bar federal funds from covering abortion services. And his claim about a one dollar per month abortion premium is just a complete misunderstanding of the legislative text.

Here’s how it works. The Senate bill would set up a series of state-based health care exchanges, which people and businesses buying insurance would use compare prices and services. This is where individuals who receive federal subsidies to help them afford insurance would be required to shop. All plans listed on the exchanges would have the choice of whether or not to cover elective abortions (those not resulting from rape, incest, or risking the life of the mother). If they offer elective abortion funding, the bill requires them to collect separate payments for the abortion services, paid entirely by individuals, and to hold those payments in a separate account.

Here’s the actual legislative text of those provisions, from page 2069 that Stupak references (my notes in bill text below are bracketed).

(2) PROHIBITION ON THE USE OF FEDERAL FUNDS-

(A) IN GENERAL- If a qualified health plan provides coverage of services described in paragraph (1)(B)(i) [provides elective abortion coverage], the issuer of the plan shall not use any amount attributable to any of the following for purposes of paying for such services:

(i) The credit under section 36B of the Internal Revenue Code of 1986 (and the amount (if any) of the advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act).

(ii) Any cost-sharing reduction under section 1402 of the Patient Protection and Affordable Care Act (and the amount (if any) of the advance payment of the reduction under section 1412 of the Patient Protection and Affordable Care Act).

(B) ESTABLISHMENT OF ALLOCATION ACCOUNTS- In the case of a plan to which subparagraph (A) applies, the issuer of the plan shall—

(i) collect from each enrollee in the plan (without regard to the enrolleeā€™s age, sex, or family status) a separate payment for each of the following:

(I) an amount equal to the portion of the premium to be paid directly by the enrollee for coverage under the plan of services other than services described in paragraph (1)(B)(i) [all health services besides elective abortion coverage] (after reduction for credits and cost-sharing reductions described in subparagraph (A)); and

(II) an amount equal to the actuarial value of the coverage of services described in paragraph (1)(B)(i) [elective abortion coverage], and

(ii) shall deposit all such separate payments into separate allocation accounts as provided in subparagraph (C).

In the case of an enrollee whose premium for coverage under the plan is paid through employee payroll deposit, the separate payments required under this subparagraph shall each be paid by a separate deposit.

(C) SEGREGATION OF FUNDS-

(i) IN GENERAL- The issuer of a plan to which subparagraph (A) applies shall establish allocation accounts described in clause (ii) for enrollees receiving amounts described in subparagraph (A).

(ii) ALLOCATION ACCOUNTS- The issuer of a plan to which subparagraph (A) applies shall deposit—

(I) all payments described in subparagraph (B)(i)(I) into a separate account that consists solely of such payments and that is used exclusively to pay for services other than services described in paragraph (1)(B)(i); and

(II) all payments described in subparagraph (B)(i)(II) into a separate account that consists solely of such payments and that is used exclusively to pay for services described in paragraph (1)(B)(i).

In sum, payments for abortion services would have to be paid separately by individuals exclusively with their own money, and insurers must hold those payments in separate accounts that can only be used for abortion services. All payments for health services besides elective abortions, from individuals, businesses or the government, would also be held in a separate account which could be used for all health services besides abortions.

How would insurers determine how much individual premium money to put in the account for abortion coverage? The bill would require insurers to use actuarial values, but since covering abortions may actually lower costs for insurers and cause an actuarial value of less than zero (abortions are cheaper than births), it sets a minimum of one dollar per month. This is where Stupak is getting his claim that the bill would require enrollees to pay a “minimum of one dollar per month toward reproductive rights,” but he’s just flat-out misunderstanding the text. Here it is in the context of the bill:

(D) ACTUARIAL VALUE-

(i) IN GENERAL- The issuer of a qualified health plan shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under the qualified health plan of the services described in paragraph (1)(B)(i) [elective abortions].

(ii) CONSIDERATIONS- In making such estimate, the issuer—

(I) may take into account the impact on overall costs of the inclusion of such coverage, but may not take into account any cost reduction estimated to result from such services, including prenatal care, delivery, or postnatal care;

(II) shall estimate such costs as if such coverage were included for the entire population covered; and

(III) may not estimate such a cost at less than $1 per enrollee, per month.

One last point. Stupak says that he wants to finish health care reform and that the abortion language can be changed under the reconciliation process. “We did welfare reform under reconciliation … The State Children’s Health Initiative Program was passed through reconciliation. You can do it. If there’s a will there’s a way.”

But history indicates otherwise. As I explained here, the Democrats stripped a provision from the Balanced Budget reconciliation bill of 1995 that sought to “bar against the use of federal funding of abortions under Medicaid” because it did not produce a change in outlays or revenues and, thus, violated the Byrd Rule.

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