Federal regulations conflict with state abortion coverage plan

Washington — The federal government’s prohibition on funding abortion services sets up a new range of problems for Gov. Dannel Malloy’s administration when Connecticut implements the next phase of the Affordable Care Act.

The Affordable Care Act requires all states to come up with a basic health-care coverage plan that insurers must offer, at a minimum, to all of their customers. The mandate for that basic plan would take effect in 2014, when all states must have an insurance exchange in place that would offer individuals and small businesses a choice of private insurance plans.

Last week, the state’s health insurance exchange board considered a plan selected by two of its subcommittees that would  form the basis for all health insurance coverage in the state. Only companies that self-insure won’t be required to offer that plan, modeled after ConnectiCare’s HMO.

Connecticut’s Deputy Insurance Commissioner Anne Melissa Dowling, who chairs one of the subcommittees that recommended the plan, said abortion services were included in the benchmark plan because they are included in ConnectiCare’s HMO and other plans considered by the exchange board.

“Every one of them offered voluntary termination coverage, so that was already in place,” Dowling said.

Connecticut’s exchange board will vote on the benchmark plan in August, then send it to Malloy for his likely approval.

But the inclusion of abortion services in the plan will cause some problems.

While all Connecticut’s insurers will be required to offer all of the coverage in the benchmark plan, the federal government has made an exception for abortion services.

That means some plans in Connecticut exchange could offer them and some of them, even those that currently offer abortion services, may not.

And there’s another problem.

To win the vote of Democratic senator Ben Nelson of Nebraska,  the ACA’s proponents in Congress agreed to include some anti-abortion language in the health-care bill that requires a complicated segregation of funds in both the sale and purchase of abortion coverage.

The Affordable Care Act will provide federal subsidies to low- and middle-income people and families and federal tax breaks to qualifying small businesses that cover their workers.

But there’s a prohibition on the use of federal funds for abortion services, strengthened by the “Nelson language.”

That means Connecticut residents who receive federal subsidies to purchase health-care policies would be required to pay for abortion coverage out of their own pocket.

It also means insurance companies must itemize the portion of the premium for abortion services for everyone buying policies.

Insurers will also have to establish a dual accounting system. One account must be created solely to deposit premium dollars used to pay for abortion coverage — an account into which no federal dollars may be deposited — and another, separate account to process premium dollars that pay for all other coverage.

Connecticut businesses receiving tax credits to purchase insurance policies that include abortion coverage for their employees would have to “keep a segregation between federal funds offered as premium tax credits and coverage for abortion services,” Department of Health and Human Services guidelines say.  How this would be done is unclear.

Naral-Pro Choice, an abortion rights group, said the ACA “unfairly treats abortion coverage as a separate and distinct — even stigmatized — benefit.”

“No other provision in the law requires individuals to make separate payments for other sensitive, personal health services,” Naral-Pro Choice said.

Adding to the Malloy administration’s problems is the federal government’s lack of guidance to the states.

“We all anticipated the federal government was going to tell the states exactly what we have to do, but they didn’t,” said Jeannette DeJesús, special adviser to the governor for health reform and a member of the health exchange board.

Initially, the federal government was going to establish a uniform benefits package that would form the basis of health plans for all the states.

But health insurers and employers said states should have more flexibility. So the federal government in December issued general guidelines that included 10 essential services states should include in their benchmarks, but let each state craft its own plan.

It’s unclear how many states besides Connecticut will include abortion services in their benchmarks. Connecticut is ahead of many states in its implementation of the ACA. Only Washington state is further along. It tried to include abortion coverage in its benchmark plan, but the state’s legislature blocked that move.

Six states are at the same stage as Connecticut, with a recommended — but not final — benchmark plan.

Another 15 states that don’t have their benchmark plans yet, including Arizona, Florida, Tennessee and Virginia, have passed laws that prohibit the sale of abortion services in their exchanges.

In late September, HHS will ask all states to submit their benchmark plans. If HHS rejects a plan, it will require the state to use the small group plan with the largest enrollment in the state as its benchmark.