H.R. 7: No Taxpayer Funding for Abortion Act

H.R. 7

No Taxpayer Funding for Abortion Act

Date
January 28, 2014 (113th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Tuesday, January 28, 2014, the House will consider H.R. 7, the No Taxpayer Funding for Abortion Act, under a rule.  H.R. 7 was introduced on May 14, 2013 by Rep. Chris Smith (R-NJ), and has 164 cosponsors.  H.R. 7 was marked up on January 15, 2014 by the House Judiciary Committee and was ordered reported, as amended, by a vote of 22-12.[1]

Bill Summary

Title I: Prohibiting Federally Funded Abortions

H.R. 7 codifies policies enacted for more than thirty years on a case-by-case basis that prohibit federal funding of abortion.  “Provisions that currently rely on regular re-approval include: the Hyde amendment, which prohibits funding for elective abortion coverage through any program funded through the annual Labor, Health and Human Services Appropriations Act; the Smith FEHBP amendment, which prohibits funding for health plans that include elective abortion coverage for Federal employees; the Dornan amendment, which prohibits use of congressionally appropriated funds for abortion in the District of Columbia; and other policies such as the restrictions on elective abortion funding through the Peace Corps and Federal prisons.”[1] 

Specifically, H.R. 7 prohibits the use of federal funds for abortion or health plans that cover abortion, except in cases of rape, incest, or when the life of the mother is in danger.  H.R. 7 prohibits abortions at facilities owned or operated by the federal government, and prevents federal employees from performing abortions within the scope of their employment.  H.R. 7 does not prohibit the use of federal funds to treat complications that arise from or are exacerbated by an abortion, regardless of whether the abortion was performed legally.

H.R. 7 does not prohibit the purchase of separate abortion coverage, as long as it is paid for entirely with non-federal funds.  The bill also states that it does not prohibit non-federal health insurance providers from offering abortion coverage, and does not prohibit states and localities from contracting separately for such coverage, as long as non-federal funds are used.  H.R. 7 does not preempt other federal laws limiting the use of federal funds for abortion or health plans that cover abortion.

H.R. 7 applies the policies contained in Title I of the bill to the District of Columbia as well.

Title II: Application under the Patient Protection and Affordable Care Act

H.R. 7 prohibits premium tax credits and cost-sharing subsidies authorized under the Patient Protection and Affordable Care Act (PPACA) from being granted for health plans that include elective abortion coverage.  H.R. 7 also prohibits small business tax credits authorized under PPACA for health plans offered by an employer that include elective abortion coverage.  H.R. 7 does not prohibit individuals from purchasing separate abortion coverage, or employers from offering separate abortion coverage, as long as tax credits and cost-sharing subsidies are not received for such coverage.  In addition, H.R. 7 prohibits Office of Personnel Management-contracted multi-state plans from including elective abortion, altering the current structure that requires only one plan to exclude abortion. 

The prohibitions in H.R. 7 relating to PPACA will go into effect for health plans beginning on or after January 1, 2015.  In the interim, H.R. 7 incorporates provisions of H.R. 3279, the Abortion Insurance Full Disclosure Act of 2013, that require consumers to be informed about abortion coverage and surcharges in plans sold on the exchanges.



[1] Id. at 3.

Background

For more than three decades, various appropriations riders have been enacted to prohibit federal funding of abortion.[1]  This patchwork approach has created uncertainty, as each provision requires regular re-approval.  The Hyde amendment was first enacted in 1976, and is generally included as part of the Labor, Health and Human Services Appropriations Act.  It prohibits both the direct use of federal funds for abortion services and federal subsidies for plans that include abortion coverage, except in cases of rape, incest, or when the life of the mother is in danger.[2]  Yet PPACA, as enacted, did not prohibit the use of taxpayer money—in the form of federal subsidies—to fund abortion. 

PPACA allows plans offered on the exchanges to cover elective abortions and authorizes taxpayer subsidies to be used to purchase plans covering these services.  Specifically, PPACA established federal tax credits to assist certain individuals in paying for health plans offered through the individual exchanges.[3]  “The new premium credits established under [PPACA] will be advanceable and refundable, meaning taxpayers need not wait until the end of the tax year in order to benefit from the credit, and may claim the full credit amount even if they have little or no federal income tax liability.”[4]  “Although this . . . is called a ‘credit,’ it is actually provided regardless of one’s tax liability, so it is akin to an entitlement program.  [A 2010 CBO chart] evidences that 73% of the total cost for the premium assistance credits will be through direct spending in excess of tax liability.”[5]  According to a 2013 CBO chart, the figure could be even higher at 87.7%.[6]  The ACA also created new cost-sharing subsidies that reduce the annual cost-sharing requirement for certain individuals.[7]  Additionally, “Under [PPACA], certain small employers will be eligible for a small business tax credit, provided they contribute a uniform percentage of at least 50% toward their employees’ health insurance.”[8]  PPACA also “establishes multi-state plans that will be administered by the Office of Personnel Management and are designed to be similar to Federal Employee Health Benefits Program (FEHBP) coverage.”  Abortion services may be covered in all but one of these plans. 

H.R. 7 addresses these issues by “establish[ing] a government-wide statutory prohibition on funding abortion or insurance coverage that includes abortion.  This comprehensive approach will reduce the need for the numerous separate abortion funding policies and ensure that no program or agency is exempt from this important safeguard.”[9]



[1] Id. at 2.

[2] Id. at 4.

[3] Bernadette Fernandez, Health Insurance Premium Credits in the Patient Protection and Affordable Care Act, Congressional Research Service (Oct. 30, 2013) at 1.

[4] Id. at Summary.

[5] House Committee Report 113-332 at 7.  “In a separate publication, CBO explains: ‘PPACA … establishes new exchanges for the purchase of health insurance and authorizes government subsidies … for individuals and families who meet income and other eligibility criteria. The subsidies … are structured as refundable tax credits; the portions of such credits that exceed taxpayers’ liabilities are classified as outlays, while the portions that reduce tax payments appear in the budget as reductions in revenues.’”  Id.

[6] See Congressional Budget Office, CBO’s May 2013Baseline: Health Insurance Exchanges, available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44190_EffectsAffordableCareActHealthInsuranceCoverage_2.pdf.

[7] Fernandez, Health Insurance Premium Credits in the Patient Protection and Affordable Care Act at 1.

[8] Manon Scales & Annie L. Mach, Summary of Small Business Health Insurance Tax Credit Under the Patient Protection and Affordable Care Act (ACA), Congressional Research Service (July 8, 2013) at 1.

[9] House Committee Report 113-332, Part 1 at 4.

Cost

According to CBO estimates, implementing H.R. 7 would have a negligible effect on direct spending over the 2014-2024 period.  In addition, the bill would have a negligible effect on tax revenues.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.