MEMORANDUM

TO: [Undisclosed Parties]

FROM: Americans United for Life Action Legal Team

DATE: September 10, 2010

RE: Abortion Funding “How the Health Care Law Subsidizes Insurance Coverage and Allows Taxpayer Funding for Abortions”

I. The Affordable Care Act uses federal tax dollars to subsidize insurance plans that cover abortions, which is equivalent to directly paying for the abortions.[1] Further, the language of the Executive Order (which was signed three days after the House passed the Affordable Care Act, not before) did not “cure” the major abortion-funding flaw in the Affordable Care Act – the absence of a comprehensive prohibition on the use of federal funds for abortions and abortion coverage.[2]

●      Section 1303 of Title I, Subtitle D of the Affordable Care Act [which provides for the establishment of Qualified Health Plans (QHP’s) which may participate in the new Health Benefit Exchanges] provides that QHP’s may provide abortion coverage to enrollees.

●      While the section creates an accounting mechanism designed to prevent federal subsidies from being used to directly pay for abortions through QHP’s, this provision is a departure from the status quo on abortion funding – the Hyde Amendment and other federal programs, such as the Federal Employee Health Benefits Program (FEHBP), prohibit federal subsidies from supporting insurance plans that cover abortions, regardless of whether the federal dollars are used to directly pay for abortions.  In other words, federal law has historically treated the subsidization of insurance plans that cover abortions as equivalent to paying for abortions.

●      The Executive Order does not cure this problem or comprehensively prohibit the use of federal funds for abortions.  The Executive Order still allows the use of other funds authorized or appropriated through the Affordable Care Act to pay for abortions.

●      Further, the EO fails to apply Hyde to the Exchanges; instead, it simply calls for strict compliance with the “abortion surcharge” provision in the Affordable Care Act.[3]

II. Existing restrictions on federal funding for abortion do not apply to the Affordable Care Act.[4]

●      The Hyde Amendment prohibits the use of federal tax dollars appropriated through the Labor, Health and Human Services Appropriations bill for abortions or abortion coverage.  Other federal laws and regulations similarly prohibit the use of specific federal tax dollars for abortions.  These restrictions do not apply to the use of funds under the Affordable Care Act.

○      In a memo addressing funds allocated to the new “high risk pool” program in the Affordable Care Act, the Congressional Research Service stated:

Because the Hyde Amendment restricts only the funds provided under the appropriations measure for the Departments of Labor, HHS, and Education, it would not seem to apply to the funds provided for the high risk pools pursuant to section 1101(g)(1) of [the Affordable Care Act]. . . . Other abortion funding restrictions, such as those in the appropriations measure for the Department of State and Foreign Operations, operate like the Hyde Amendment and limit only funds provided under that particular appropriations measure (emphasis added).[5]

III. The Affordable Care Act’s limited restriction on the use of federal tax dollars to directly pay for abortions under Section 1303 does not apply to any other funds authorized and/or appropriated in the Act; this failure to comprehensively prohibit the use of federal tax dollars for abortions allows the largest expansion of federal funding of abortion ever.[6]

●      The CRS also stated that “[a]bortion restrictions included in section 1303 of [The Affordable Care Act] . . . would not appear to apply specifically to the funds made available for high risk pools. . . .”[7]

●      The CRS was clearly right, because the Department of Health and Human Services approved state proposals to create high risk pools that included the use of federal tax dollars for abortion coverage. It was not until pro-life groups protested that the Administration agreed to draft regulations prohibiting the use of these funds for abortions.[8]

●      This controversy demonstrates how the Affordable Care Act permits taxpayer funding for abortion.  While one particular loophole (the use of high risk pool funds for abortions) is being corrected, there are other loopholes that could lead to direct taxpayer funding for abortions, such as the section creating multi-state qualified health plans (Section 1334(a)(6)), which only requires that one multi-State plan in an Exchange not cover abortions, and Section 10221 which prohibits abortion funding and coverage under the Indian Health Care Improvement Act so long as the annual appropriations bill for the Indian Health Service includes a prohibition on abortion funding and coverage (this could be changed annually).

●      If Congress had adopted a comprehensive prohibition on the use of federal funds for abortions and insurance plans that cover abortions in the new health care law, the prohibition on using high risk pool funds for abortions would have been unnecessary in the regulation.  While this regulation will prevent these particular federal funds from being used for abortions (barring a court decision that without statutory language, such funding is required),[9] congressional action is needed to comprehensively prohibit the use of federal tax dollars for abortion through the Affordable Care Act. Without such a prohibition, abortion funding is going to continue to be an issue with other provisions.  In fact, Nancy-Ann DeParle, the Director of the White House Office of Health Reform, wrote on the White House blog that

“The [high risk pool] program’s restriction on abortion coverage is not a precedent for other programs or policies [covered by the health care reform law] given the unique, temporary nature of the program and the population it serves” (emphasis added).

●      Further, this action by HHS is additional evidence that the health care reform law and the President’s executive order did not comprehensively prohibit federal funding for abortion.

IV. Congressmen were well-briefed on these concerns before they voted on the Affordable Care Act, and had the opportunity to demand the inclusion of a comprehensive prohibition on the use of federal tax dollars for abortions before supporting the bill.  Because they did not, the pro-abortion Obama Administration has the opportunity to expand federal funding for abortion through multiple programs in the Affordable Care Act.

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[1] Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, 896 (Mar. 23, 2010), available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ148.111.pdf).

[2] Posting of Dan Pfeiffer to The White House Blog, http://www.whitehouse.gov/blog/2010/03/21/one-more-step-towards-health-insurance-reform (March 21, 2010, 16:16 EST).

[3] Section 2. The third section of the EO states that the Hyde Amendment will apply to the new authorization and appropriation of funds for Community Health Centers (CHC’s); this section should effectively prohibit the use of CHC funds for abortions, barring a court decision that explicit statutory language is needed to prohibit such funding (The Affordable Care Act does not prohibit these new CHC funds from being used to pay for abortions.).

[4] See Memorandum from Cong. Research Service to S. Comm. on Health, Education, Labor, and Pensions, High Risk Pools Under PPACA and the Coverage of Elective Abortion Services, p. 3 (July 23, 2010), available at http://help.senate.gov/imo/media/doc/CRS%20Report%20for%20HELP%2007232010.pdf.

[5] Id. (emphasis added).

[6] See id. at 1.

[7] Id.

[8] See http://newmexicoindependent.com/59761/nm-move-to-cover-abortion-in-high-risk-pools-prompts-feds-to-ban-coverage; http://www.kaiserhealthnews.org/Daily-Reports/2010/July/19/Health-Reform-Implementation-Politics.aspx.

[9] History has shown that where abortion funding and coverage is not prohibited by statute, courts or administrative agencies will include it.  In the 1996 case Planned Parenthood v. Engler, 73 F.3d 634, 637 (6th Cir. 1996), a Circuit Court held that abortion “fall[s] within several of Medicaid’s mandatory categories of care” and that a state law that restricted funding for abortion to those necessary to save the mother’s life conflicts with the “mandate.”  The court found that “under Medicaid, certain categories of medical care are mandatory and therefore must be provided by participating states when a physician certifies that the care is medically necessary to the patient.”  The court broadly concluded that “abortion fits within many of the mandatory care categories.”  See also Hope Medical Clinic v. Edwards, 63 F.3d 418 (5th Cir 1995); Little Rock Family Planning Services v. Dalton, 60 F.3d 497 (8th Cir. 1995), cert. denied, 116 S.Ct. 777 (1996); Hern v. Beye, 57 F.3d 906, 910 (10th Cir. 1995), cert. denied, 116 S.Ct. 569 (1995).