A California law requiring all health plans cover abortions is set to collide with federal Affordable Care Act repeal efforts that would cut federal subsidies for health plans that pay for the procedure.
State officials and health advocates have pledged to fight a stipulation of the Republican-authored American Health Care Act that could deprive 1.4 million Californians of the federal tax credits that help them afford coverage on the Covered California health exchange.
Abortion is considered a basic health service under California law, and all plans regulated by the Department of Managed Health Care are required to cover it. That includes plans offered through the Covered California exchange. About 90 percent of the 1.4 million Californians insured through the exchange receive tax credits to offset the cost of care.
Under the new health care bill, people with any plan covering abortions, other than in instances of rape, incest and life-threatening medical situations, couldn’t receive those subsidies. All 11 health plans offered through Covered California would be cut off.
“California is really in a bind here,” said Amy Chen, staff attorney in the Los Angeles office of the National Health Law Program, a legal organization that advocates for the health rights of low-income people. “It creates an untenable situation because almost no one would be eligible for these tax credits.”
The average enrollee in Covered California plans received $3,500 in credits in 2016, while the average household received $5,300. Without those subsidies, many people would be priced out of coverage, Chen said.
In other states, where abortion coverage is not required, some marketplace plans will likely drop the benefit in favor of the subsidy. California is the only state requiring health plans pay for abortions.
California Insurance Commissioner Dave Jones said he expects California will challenge the provision in court if it remains in the bill.
“The house GOP bill goes way beyond the Hyde Amendment,” which prohibits federal money to be used for elective abortions, Jones said. “It’s a woman’s right to choose here in California, and we protect that right. That’s an important part of who we are as Californians.”
Covered California representatives said they are still analyzing the impacts of the potential change.
“This is one of the many issues contained in the House proposal we are looking to better understand so that we can be prepared to provide technical assistance to policymakers,” said spokesman James Scullary in an email. “The American Health Care Act would make significant changes to the way our exchange operates that would have wide-ranging impacts.”
Charles Bacchi, president and CEO of California Association of Health Plans, said in an email that “plans will continue to provide covered medically necessary services until changes in federal law take effect.”
Faced with losing subsidies, California could choose to back off of the abortion coverage mandate, said Jonathan Keller, president and CEO of California Family Council, a Christian nonprofit policy group. Churches and faith-based groups have long opposed the policy and are hoping the new bill will force the state to change it, he said.
“I did not actually see this coming,” Keller said. “We’ve been pushing against the mandate for the last 2 1/2 years, but we really thought it would only be something that’s affecting these churches and faith-based groups. I don’t think anyone foresaw the way these two things would interact.”
One solution would be for California to legalize plans that do not cover abortions, while also giving insurers the option to sell add-on abortion insurance to enrollees who want it.
“If they did that, it would be in compliance with the rulings of the new American Health Care Act, and companies and organizations that wanted to provide plans that cover abortions still could,” Keller said. “That’s what we believe is the best situation because you resolve the lawsuit situation with the faith-based organizations and the collision course with the federal government at the same time.”
Alternatively, California could maintain the abortion coverage mandate. Women who buy through the exchange would still be covered for abortions but wouldn’t receive a federal tax credit. Some Covered California enrollees may have the option to move onto one of four multistate plans in the exchange, which are regulated by the Office of Personnel Management and do not cover abortions.
An abortion costs anywhere between $300 and $2,000 out of pocket, depending on the surgical setting (clinic vs. office), the method (surgical vs. pill) and the trimester.
“They’re not saying you can’t cover abortions in the private market,” Chen said of the stipulation. “But they’re making it too expensive because many women wouldn’t be able to use their tax credits to buy insurance that includes abortion care. It’s a sneaky way to do it.”