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Democrat "Compromises" Would Expand Federal Funding for Abortions

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OCTOBER 1, 2009

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"And one more misunderstanding I want to clear up-under our plan, no federal dollars will be used to fund abortions."

- President Obama, address to Joint Session of Congress

The government takeover of health care contemplated by Senate Finance Committee Chairman Baucus' legislation contains expansions of federally-funded abortions that exceed even the White House's purported intent. The Finance Committee mark borrows provisions from an amendment to H.R. 3200 offered in the House Energy and Commerce Committee by Rep. Lois Capps (D-CA). The Republican Conference has prepared background on both the Baucus and the Capps provisions, and the ways in which they could increase access to abortion and provide federal funds for same.

Access to Insurance Policies Covering Abortion: Both the Capps amendment and the Baucus bill would require coverage for abortion by at least one insurance plan offered in the Exchange. (The Baucus bill provides for State-based Exchanges, while H.R. 3200 would create a national Exchange.) This mandate would be a significant expansion from current federal regulations on insurance coverage, which state that, "Health insurance benefits for abortion, except where the life of the mother would be endangered if the fetus were carried to term or where medical complications have arisen from an abortion, are not required to be paid by an employer." While both the Capps amendment and the Baucus bill would also require one plan that does not cover abortions to be offered in the Exchanges, some Members may be concerned that the new mandate to abortion access could in turn lead to federal actions to "protect" access to abortions-such as mandates for abortion clinics, drugs, etc.

Federal Subsidies and Abortion Coverage: The Baucus bill and the Capps amendment specifically permit taxpayer subsidies to flow to private health plans that include abortion, but create an accounting scheme designed to designate private dollars as abortion dollars and public dollars as non-abortion dollars. Specifically, the provisions claim to segregate public funds from abortion coverage and would allegedly prevent funds used on abortion from being considered when determining whether plans meet federal actuarial standards.

However, press reports have been skeptical about whether and how this accounting mechanism would prevent federal funding of abortions. The accounting scheme has likewise been rejected by pro-life organizations, which recognize it as a clear departure from long-standing federal policy against funding plans covering abortion (e.g., Federal Employee Health Benefits Program, Medicaid, SCHIP, etc.).

Unlike government-run programs like Medicare and Medicaid, which can specifically prohibit coverage of a particular service, funds provided to a third-party insurance company to subsidize an individual's coverage would by definition make that individual's "supplemental" abortion coverage more affordable. Therefore many Members may believe that the only way to prevent federal funds from subsidizing abortion coverage is to prevent plans whose beneficiaries receive federal subsidies from covering abortions. To that end, many may note that insurance plans within the FEHBP have been prohibited from offering abortion coverage since 1995, and federal employees have expressed strong satisfaction with their choice of plan options.

Government-Run Plan; Co-Ops: The Capps amendment to H.R. 3200 explicitly permits the Secretary to include abortion in the services offered by a government-run plan, and requires that the government-run plan cover abortions unless the "Hyde amendment" restrictions on federal funding for abortion coverage are renewed every year in the Labor-HHS appropriations bill.

While some Democrats have claimed that the government-run plan will self-sustain on premium revenue, meaning abortion coverage should be permitted, several facts undermine that rhetoric. First, any outlay by a government-run plan would by definition spend federal funds-so any government-run health plan offering abortion coverage would not meet the conditions set out by the President in his address to Congress. Second, Section 222(b)(2) of H.R. 3200 as introduced spends $2 billion-as well as 90 days of claims reserves based on projected enrollment-in federal taxpayer dollars in start-up funds-and these taxpayer dollars would fund a plan that covers abortion. Third, taxpayer subsidies would be provided to low-income individuals to purchase coverage in the government-run plan, leading to the same potential difficulties and objections as those discussed above. Fourth, future taxpayers could be asked to provide bailout funds to the government-run health plan-requiring a further unprecedented amount of federal taxpayer funding for abortion coverage.

While the Baucus bill does not create a government-run health plan, it does provide $6 billion in taxpayer funding for a series of State-based health insurance co-operatives-and these co-operatives could choose to cover abortions. Thus this provision of the Baucus bill also could lead to federal taxpayer funding for abortions-a sharp deviation from current law and practice.

Mandatory Abortion Coverage: The Baucus bill as introduced placed limited restrictions on whether government bureaucrats on state insurance Exchanges can include abortion coverage as part of the minimum benefits package all individuals must purchase. The provision prohibited bureaucrats from requiring individuals to obtain abortion coverage if such abortions are prohibited under the annual Department of Health and Human Services appropriations bill (even though the bill's spending would not be governed by that bill's "Hyde Amendment" protections). Under current law, the "Hyde Amendment" prohibits federal funding of abortions, except in cases of rape, incest, or to save the life of the mother. However, the "Hyde Amendment" provisions must be renewed annually in the Labor-HHS appropriations bill. While an amendment adopted in the Senate Finance Committee markup prohibited mandatory coverage of any abortion procedures, if the original Baucus language was reinserted by Senate leaders and the "Hyde Amendment" provisions were not renewed, government bureaucrats could require all individuals to obtain abortion coverage or face tax penalties.

Network Adequacy Provisions: Section 115 of H.R. 3200 as introduced gives the Health Choices Commissioner the power to regulate provider networks of qualified health benefits plans. (The Baucus bill includes no similar provision.) Many may be concerned that, when coupled with language in the Capps amendment requiring that a plan that includes abortion be made available in every region, could lead to mandates to "protect" access to abortion services (such as the establishment of abortion clinics)-or that all private employers include abortion clinics in their networks for them to be considered "adequate."

Related Provisions: Language in both the Baucus bill and Capps amendment appears to prevent State laws from being overturned and benefits plans from discriminating against health care providers because of their willingness or unwillingness to "provide, pay for, provide coverage of, or refer for abortions." However it is unclear how federal bureaucrats might interpret these provisions.

Conclusion: When asked whether the White House "will go beyond what we have seen in the House [i.e., the Capps amendment] and explicitly rule out any public funding for abortion," HHS Secretary Sebelius responded that the Administration would do just that. However, as currently drafted, neither the Capps amendment-adopted on a party-line 30-28 vote, with six pro-life Democrats opposing-nor the Baucus bill would prevent an expansion of abortion coverage and federal subsidies for same.

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Democrat "Compromises" Would Expand Federal Funding for Abortions

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