The public comment period closed on Wednesday for a rule proposed by the Biden administration that would reverse a Trump administration rule regarding program integrity for certain health insurance plans that cover elective abortions.
At issue is Section 1303 of the Patient Protection and Affordable Care Act, also known as Obamacare. This section of the law requires that insurers collect a separate payment for certain abortion coverage in qualified health plans approved to be sold on exchanges and keep those separate payments in separate accounts used only to pay for elective abortion services.
Under the Obama administration, this requirement was not enforced, and the Trump administration rule sought to correct this problem. Now, the Biden administration seeks to return to the Obama administration policy of allowing separate payments to be made together, undermining the clear text of the law.
The Heritage Foundation has long articulated the many ways in which Obamacare entangles taxpayer dollars with elective abortions. Heritage experts have also highlighted how Section 1303 has, in practice, amounted to an accounting gimmick due to noncompliance and lack of enforcement. (The Daily Signal is the news and commentary platform of The Heritage Foundation.)
In response to the Biden administration’s proposed rule, Heritage submitted a public comment.
An abridged and lightly edited version of that comment follows:
Background on Section 1303
In Section 1303 of Obamacare, Congress addressed a number of issues involving coverage and funding of abortion arising from other provisions of the legislation that imposed new benefit requirements on private insurance plans and provided new, income-related federal subsidies for purchasing such plans.
States have the authority to permit or prohibit the inclusion of abortion coverage in qualified health plans offered through their exchange. Qualified health plans may, but are not required to, cover abortions. For plans that do include abortions, federal funds, including tax credits and advance payment reductions, can’t be used for abortions that are restricted under the Hyde Amendment (hereafter referred to as “elective” abortion services).
The Hyde Amendment is language incorporated into the annual appropriations bill for the departments of Labor, Health and Human Services, and Education, and related agencies.
Since 1976, the amendment has prohibited funds appropriated through the departments to be spent on abortions and for health benefits coverage of elective abortion. Current Hyde Amendment language includes exceptions for rape, incest, or when the life of the mother is in danger.
Notably, President Joe Biden and the House of Representatives’ fiscal year 2022 budget proposes to eliminate the Hyde Amendment.
In addition to restrictions on taxpayer funds for elective abortions, Section 1303 establishes additional rules for plans that cover elective abortions.
The issuer of a plan is to collect a separate payment for elective abortion coverage and the rest of the premium. The separate abortion payments are to be put in a separate allocation account used exclusively to pay for elective abortions.
In addition to collecting a separate payment for elective abortions and segregating funds for such services, qualified health plans are supposed to provide notice at the time of enrollment that a plan includes abortion coverage.
In summary, federal law under Obamacare’s accounting and notice requirements regarding elective abortion coverage is unambiguous. The law requires separate—that is, two distinct—payments for elective abortion services and other services covered under a policy. The law requires that a separate allocation account be used exclusively to pay for elective abortions. And the law requires that consumers have transparency regarding coverage for elective abortions.
Congressional Intent Affirms What the Law Requires
While the plain letter of the law is clear, so too is the legislative history of Section 1303. During consideration of Obamacare, Sen. Ben Nelson, D-Neb., shepherded an amendment that ultimately became Section 1303 into law and his explanation of the separate payment concept cannot be clearer:
[I]f 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.
Congress allowed qualified health plans on the exchanges to cover elective abortions, and Congress made clear that such plans would be subject to specific requirements regarding transparency and separation of funds.
Noncompliance vs. Faithfully Implementing the Law
Despite clear statutory separation and transparency requirements regarding abortion services, a 2014 Government Accountability Office report found that many qualified health plan issuers were not following the law.
From failing to provide notice to enrollees regarding abortion coverage to charging less than the statutorily required minimum dollar amount for abortion coverage to not collecting separate payments for non-Hyde abortion services, qualified health plan issuers were largely not fulfilling their legal obligations.
And the Obama administration continued to allow what should have been separate payments to be collected together with the rest of the premium in a single payment. This accounting gimmick meant that many Americans were paying a hidden surcharge for elective abortions—often unaware that their plan included such coverage in the first place.
In contrast, the Trump administration rule sought to ensure that insurance issuers abide by both the letter and spirit of the law and follow Congress’ intent of offering some semblance of transparency regarding abortion coverage in qualified health plans.
The rule requires issuers to send qualified health plan policyholders a monthly bill for elective abortion coverage and the rest of the premium and requires that issuers instruct policyholders to pay for elective abortion coverage and the rest of the premium through separate transactions.
This faithfully implements what the law requires both in letter and spirit.
Proposed Rule Returns to Noncompliance
The Biden administration’s proposed rule ignores congressional intent and the plain text of the law by returning to Obama-era policy. Itemizing an abortion surcharge on a monthly bill while still allowing a monthly premium to be made in one combined payment does not meet the standard for a separate payment.
Likewise, simply notifying a policyholder at the time of enrollment that there will be an abortion surcharge falls short of what is statutorily required. The abortion surcharge may, in some cases, be buried in pages upon pages of plan documents. And after this “notice,” the abortion surcharge would be essentially hidden from consumers within a monthly premium that is collected in a single—again, not separate—payment.
For consumers with sincere moral or religious objections to abortion, the proposed rule is particularly harmful. Rather than make transparency about abortion coverage more difficult for consumers to discern, the Department of Health and Human Services should work to ensure that all consumers are able to ascertain information about abortion coverage during their shopping experience, not after the time of enrollment.
“Separate” does not mean “together.” The letter of the law, dually enacted by the American people’s elected representatives, is clear. Congressional intent affirms what the plain text of Section 1303 requires. The Biden administration’s proposed rule seeks to undermine transparency regarding elective abortion coverage in certain health plans. The proposed rule seeks to allow insurance companies—contrary to the law—to collect combined payments for what is clearly required to be separate payments for elective abortion coverage.
The Biden administration should rigorously enforce Section 1303’s requirements, not attempt to rewrite the law and obfuscate the very simple concept of separate payments. Provisions of the proposed rule that do not faithfully implement the law passed by Congress should be withdrawn.
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