Coverage for Abortion Services in Medicaid, Marketplace Plans and Private Plans
State and federal efforts to address insurance and Medicaid coverage of abortion services began soon after the 1973 Supreme Court’s Roe v Wade decision legalizing abortion and have continued to the present day. Starting in 1977, the Hyde Amendment banned the use of any federal funds for abortion, allowing only exceptions for pregnancies that endanger the life of the woman, or that result from rape or incest. The issue of abortion coverage was at the heart of many debates in the run up to the passage of the ACA and subsequently led to renewed legislative efforts at the state level to limit coverage of abortions, this time in private insurance plans. For women in the US, the extent of their abortion coverage is largely dependent on the state in which they reside, as state policies can place restrictions on both Medicaid and private insurance.
This brief reviews current federal and state policies on Medicaid and insurance coverage of abortion services, and presents national and state estimates on the availability of abortion coverage for women enrolled in private plans, Marketplace plans and Medicaid.
Federal and State Laws Regarding Coverage or Payment For Abortion
More than one million women in the U.S. have an abortion every year.1 Federal and state laws shape the extent to which women can have coverage for abortion services under publicly funded programs and many private plans. Women who seek an abortion but do not have coverage for the service shoulder the out-of-pocket costs of the services. The cost of an abortion varies depending on factors such as location, facility, timing, and type of procedure. A clinic-based abortion at 10 weeks’ gestation is estimated to cost between $400 and $550, whereas an abortion at 20-21 weeks’ gestation is estimated to cost $1,100-$1,650 or more.2 Though the vast majority (~90%) of abortions are performed in the first trimester of pregnancy, the costs could be economically challenging for many low-income women.3 Approximately 5% of abortions are performed at 16 weeks or later in the pregnancy.4 For women with medically-complicated health situations or who need a second-trimester abortion, the costs could be prohibitive. In some cases, women may have to delay their abortion while they have time to raise funds,5 or women may first learn of a fetal anomaly in the second trimester when the costs are considerably higher.6
Since 1977, federal law has banned the use of any federal funds for abortion, unless the pregnancy is a result of rape, incest, or if it is determined to endanger the woman’s life. This rule, also known as the Hyde Amendment, is not a permanent law; rather it has been attached annually to Congressional appropriations bills, and has been approved every year by the Congress. The Hyde Amendment initially affected only funding for abortions under Medicaid, but over the years, its reach broadened to limit federal funds for abortion for federal employees and women in the Indian Health Service. From 1981 to 2013, the military health insurance program limited coverage for abortion to circumstances when the woman’s life was endangered. In early 2013, an amendment to the National Defense Authorization Act expanded insurance coverage for servicewomen and military dependents to include abortions of pregnancies resulting from rape or incest, as permitted in other federal programs.7 Federal funds cannot be used to pay for abortions in other circumstances, and abortions can only be performed at military medical facilities in cases of life endangerment, rape or incest. State level policies also have a large impact on how insurance and Medicaid cover abortions, particularly since states are responsible for the operation of Medicaid programs and insurance regulation.
Medicaid: The Medicaid program serves millions of low-income women and is a major funder of reproductive health services nationally. Approximately two-thirds of adult women enrolled in Medicaid are in their reproductive years.8 As discussed earlier, the federal Hyde Amendment restricts state Medicaid programs from using federal funds to cover abortions beyond the cases of life endangerment, rape, or incest. However, if a state chooses to, it can use its own funds to cover abortions in other circumstances. Currently, 17 states use state-only funds to pay for abortions for women on Medicaid in circumstances different than those federal limitations set in the Hyde Amendment.9 In 33 states10 and the District of Columbia, Medicaid programs do not pay for any abortions beyond the Hyde exceptions (Appendix Table 1). Currently, nearly half of women with Medicaid coverage live in states that use their own funds to pay for abortion services beyond the federal Hyde limitations (Figure 1 and Appendix Table 2).
The ACA reinforces the current Hyde Amendment restrictions, continuing to limit federal funds to pay for pregnancy terminations that endanger the life of the woman or that are a result of rape or incest. State Medicaid programs continue to have the option to cover abortions in other circumstances using only state funds and no federal funds. President Obama issued an executive order as part of health reform that restated the federal limits specifically for Medicaid coverage of abortion.11 The law also explicitly does not preempt other current state policies regarding abortion, such as parental consent or notification, waiting period laws or any of the abortion limits or coverage requirements that states have enacted.
Private Insurance: States have the responsibility to regulate fully-insured individual, small and large group plans issued in their state, whereas self-insured plans are regulated by the federal government under the Employee Retirement Income Security Act (ERISA). States can choose to regulate whether abortion coverage is included or excluded in private plans that are not self-insured. In the private insurance sector, 10 states impose restrictions on the circumstances under which insurance will cover abortions (Appendix Table 1). Some states follow the same restrictions as the federal Hyde Amendment for their private plans, while some are more restrictive. Idaho has exceptions for cases of rape, incest, or to save the woman’s life for plans sold on the Marketplace, but limits abortion coverage to cases of life endangerment to the woman for all other private plans issued in the state. Utah has exceptions to save the life of the mother or avert serious risk of loss of a major bodily function, if the fetus has a defect as documented by a physician that is uniformly diagnosable and lethal, and in cases of rape or incest. However, six states (Kansas, Kentucky, Missouri, Nebraska, North Dakota, and Oklahoma) have an exception only to save the woman’s life for all private plans. Michigan allows abortion coverage in cases of life endangerment to a woman and when the abortion increases the probability of a live birth or preserves the life or health of the child after live birth, such as in cases involving a reduction, or multi-fetal pregnancy.12 Five states had these laws on the books prior to the ACA, and five more states have passed new laws restricting private plan coverage post-ACA. While nine of these states allow insurers to sell riders for abortion coverage on the private market, there is little evidence about their availability and no documentation of their cost or impact on access. Utah does not allow riders to be sold for abortion coverage.
There is no recent data on the number of private plans that include abortion coverage. Only one state, California, requires all plans, including individual and employer plans to treat abortion coverage and maternity coverage neutrally. As all plans are required to include maternity coverage, all plans must also include abortion coverage.13 Every year since 2012, Washington State has introduced, but failed to pass, similar legislation to require private plans that have maternity coverage to include abortion coverage.14
ACA Marketplace Plans:
All plans offered on the ACA Marketplaces must provide coverage for 10 Essential Health Benefits (EHB). Abortion services, however, are explicitly excluded from the list of EHBs that all plans are required to offer. Under federal law, no plan is required to cover abortion. Federal regulations15 stipulate that at least one Multi-State Plan that excludes abortion coverage must be available in each Marketplace. However, there is a transitional period to implement this policy (ending in 2017). In 2016, 32 States and DC have a Multi-State Plan. States can also enact laws that bar all plans participating in the state Marketplace from covering abortions, which 25 states have done since the ACA was signed into law in 2010 (Figure 2). Most state laws include narrow exceptions for women whose pregnancies endanger their life or are the result of rape or incest, but two states (Louisiana and Tennessee) do not provide for any exceptions.16 The ACA prohibits plans in the state Marketplaces from discriminating against any provider because of “unwillingness” to provide abortions.
In states that do not restrict coverage of abortions on plans available through the Marketplace, insurers may offer a plan that covers abortions beyond the federal limitations, but this coverage must be paid for using private, not federal, dollars. Plans must notify consumers of the abortion coverage as part of the Summary of Benefits and Coverage explanation at the time of enrollment. The ACA outlines a methodology for states to follow to ensure that no federal funds are used towards coverage for abortions beyond the Hyde limitations. Any plan that covers abortions beyond Hyde limitations must estimate the actuarial value of such coverage by taking into account the cost of the abortion benefit (valued at least $1 per enrollee per month). This estimate cannot take into account any savings that might be achieved as a result of the abortions (such as prenatal care or delivery).17
Furthermore, the federal rules stipulate that plans that offer abortion coverage and receive federal subsidies (it is believed that all plans in the state Marketplace receive at least some federal subsidies) need to collect two premium payments, so that the funds go into separate accounts. One payment is for the value of the abortion benefit and the other payment is for the value of all other services. The plan issuer must deposit the funds in separate allocation accounts, overseen for compliance by state health insurance commissioners. If a state has Multi- State Plans on the marketplace, then at least one of those plans must limit abortion coverage to the Hyde Amendment restrictions.18 In 2016, of the 261 Multi-State Plans, four offer coverage of abortion beyond the Hyde restrictions. Premera Blue Cross Blue Shield of Alaska offers two Multi-State Plans with abortion coverage and CO-OP Connecticut offers two Multi-State Plans with abortion coverage.
Both sides of the abortion debate are unsatisfied with these rules and are carefully watching the law’s implementation. While it is clear that there is no abortion coverage available to women eligible for subsidies in the states that have barred it in the Marketplace, there has been a lot of attention about how difficult it is for consumers in the remaining states to determine whether plans include abortion coverage or not. This lack of transparency was the impetus for the Office of Personnel Management to require Multi-State Plans that offer abortion coverage beyond the Hyde restrictions to notify consumers about this coverage prior to enrollment.19 Other plans may or may not include information specific to abortion coverage in their Summary of Benefits and Coverage, which consumers often receive after enrollment.
In a review of the 2016 Marketplace plans, six states (Delaware, Iowa, Minnesota, Nevada, West Virginia, and Wyoming) were found that do not have laws restricting abortion coverage, yet have no Marketplace plans that include abortion coverage. In two states (Hawaii and Vermont) all of the Marketplace plans include abortion coverage because there are no Multi-State Plans yet available. This means that consumers in those states who want to secure a plan without abortion coverage do not have that option. While the Office of Personnel Management requires every Multi-State Plan issuer to offer at least one Gold and one Silver plan that excludes abortion coverage in each Marketplace they offer coverage, states are not required to have Multi-State Plans available until 2017. As a combined result of the state laws and insurance company choices, women in 31 states currently do not have access to insurance coverage for abortions through a Marketplace plan – the only place where consumers can receive tax subsidies to help pay for the cost of health insurance premiums.
Women in the remaining 19 states and D.C. without limiting state laws may be able to choose a Marketplace plan which includes abortion coverage. The actual availability of coverage, however, will depend on whether there is a plan offered in their area that includes abortion services. For example, while Texas, Illinois, and Colorado each have at least one plan that includes abortion coverage, these plans are not available in all state counties.
The combination of longstanding federal and state policies along with the new wave of state laws that restrict abortion coverage has made coverage options especially constrained in many states. In 10 states women enrolled in Medicaid, Marketplace Plans, or in other private plans have coverage that is extremely limited when it comes to abortion (Figure 3). In 23 additional states and DC, women who qualify for Medicaid or who seek to get coverage through their state Marketplace also lack abortion coverage. And while there are 16 states that do not have policies that limit abortion coverage, in 6 of these states, no 2016 Marketplace plans offer plans that include abortion coverage.
The Availability of Abortion Coverage to Women Newly Eligible Under the ACA
The ACA intended to increase affordability of health insurance and extend coverage to uninsured individuals through a number of changes to the insurance market, including expansion of Medicaid to include individuals with incomes up to 138% FPL, the creation of the state Marketplaces, and the availability of premium subsidies for low to moderate income individuals and families. However, due to a 2012 Supreme Court decision, Medicaid expansion is now optional for states; in 2015, 20 states had not implemented Medicaid expansion.20 Women in these states who do not meet traditional Medicaid eligibility requirements and whose incomes are below 100% FPL are not eligible for Medicaid, and do not qualify for subsidies on the Marketplace, effectively creating a coverage gap.21
In 2014, an estimated 10.0 million uninsured women of reproductive age (ages 15 to 49) resided in the United States (Figure 4 and Appendix Table 3). Using 2015 Medicaid eligibility levels, an estimated 2.3 million (23%) qualified for Medicaid or had been eligible, but had not previously enrolled in the program. About 2.3 million women (23%) had incomes between 100 – 400% of the Federal Poverty Level (FPL) and qualified for subsidies in the form of tax credits if they obtained coverage through their state Marketplace. About 1 million uninsured women were eligible to obtain coverage on the state Marketplace or through the individual market, but did not qualify for subsidies because their income was too high. Finally, an estimated 1.2 million uninsured women fell into the so-called “coverage gap” because they lived in one of the states that did not expand Medicaid and their income was below 100% FPL, leaving them ineligible for subsidies to purchase coverage on the Marketplace under the law.22, 23, 24
Because of the Hyde Amendment rules and the state laws that govern coverage of abortion services in private plans, the availability of abortion coverage varies across the states among the women who are eligible for Medicaid or private coverage. Among women who are uninsured, almost three-in-ten (29%) could enroll in a Medicaid plan or private insurance plan that does not limit the scope of coverage for abortion services if they wish (Figure 5). Another 28%, 2.7 million women, lived in a state where the availability of coverage for abortion services under Medicaid, Marketplace plans and/or private policies is limited. In most of these states, abortion is limited to pregnancies that result from rape or incest or are a medical threat to a woman’s life as in the federal Hyde Amendment, but in some states, Marketplace plan coverage restrictions are ever narrower. About 1.2 million women (12%) were in the Medicaid coverage gap and did not have access to affordable coverage, either through Medicaid or subsidies, because their state did not expand Medicaid and their incomes were too low to qualify for tax credits under the law. Nineteen percent (1.9 million) of women of reproductive age are not expected to enroll in any coverage expansion under the ACA due to immigration status. All of the states which had not expanded Medicaid followed the Hyde Amendment. As a result, all of the women in the coverage gap states would have restricted availability of abortion coverage under Medicaid if their state were to broaden eligibility.
Impact of State Policies and Insurance Carrier Choices on Women’s Access to ACA Coverage
Among the estimated 2.3 million uninsured women of reproductive age who are income eligible for tax credits, 39% (871,000) have the option to enroll in a Marketplace plan that offers abortion coverage. Six in ten women (62%), however, cannot select a plan with abortion coverage through their Marketplace – 59% (1.3 million) because they live in a state that has banned abortion coverage available through Marketplace health plans and 3% (62,000) live in a state without abortion coverage restrictions, but no plans offer cover abortion services (Figure 6).
While the reasons why plans in these states have opted to exclude abortion coverage are not known, it is possible that the complexity of the requirements specific only to abortion coverage could be a deterrent to the plans. This was raised as a possible outcome during the pre-ACA abortion coverage debate. The Nelson Amendment included in the final law, requires plans to segregate funds used for abortion coverage, effectively collecting an additional fee for this coverage, and adding a layer of administrative complexity.25 Plans that choose to include abortion coverage are also subject to additional reporting standards and audit requirements. This might be the case in West Virginia, where the same insurance carrier that does not offer abortion coverage for individual policies is, however, including abortion coverage in the group policies sold to small firms through the small group marketplace plans, where the abortion-related accounting rules and reporting requirements do not apply.
Although the number women gaining access to health insurance coverage is rising, an increasing share of women are facing limitations in the scope of that coverage when it comes to abortion services. The impact of the abortion coverage restrictions disproportionately affects poor and low-income women who have limited ability to pay for abortion services with out-of-pocket funds. Today over half of women on Medicaid have abortion coverage that is limited to pregnancies resulting from rape, incest, or life endangerment. While millions of women have gained health insurance coverage as a result of the ACA insurance expansions, many are enrolled in plans that restrict the circumstances in which abortion services will be covered. Since the ACA was enacted, 25 states have enacted limitations on the circumstances in which Marketplace plans may cover abortion, and in an additional 6 states, no plans offer abortion coverage despite the absence of restricting legislation. As a result of these state actions and federal law limiting abortion coverage under Medicaid, nearly three in ten uninsured women are limited to enrollment that meets Hyde restrictions or, in some states, more restrictive circumstances. In the coming years, laws enacted at the federal and state levels as well as the choices that are made by insurers, employers, and policy holders will ultimately determine the extent of abortion coverage that will be available to women across the nation.
The authors would like to thank Anthony Damico, an independent consultant to the Kaiser Family Foundation, for assistance with data analysis.