This post is part of a series sponsored by AgentSync.
The decision of the United States Supreme Court on June 24, 2022, in the case of Dobbs vs. Jackson, overturned five decades of abortion legal precedent established by the same court in Roe vs. Wade decision in 1973, which set off a firestorm of backlash and praise from an increasingly divided electorate.
While the ruling will undoubtedly have intended and unintended repercussions as the question of whether abortion is a human right returns to state legislatures and courts for determination, our primary concern at the AgentSync blog is the broken insurance system and how abortion coverage works—or doesn’t— within the framework of the insurance.
No surprise: Insurance coverage for abortion was a patchwork of state frameworks and federal political footballs even before the Dobbs decision. From here, if we were to hazard a guess, we’d think things are going to get even bumpier.
SCOTUS rules on Dobb’s decision
The full case name is Dobbs, State Health Officer of the Mississippi Department of Health, et al., vs. Jackson Women’s Health Organization et al., for anyone interested in reading the entire 213 page opinion. At issue was Mississippi’s Gestational Age Act, a law the Mississippi Legislature passed in regular session that sought to limit abortion to the first 15 weeks of pregnancy, except for medical emergencies.
While the original text has elements of reasoning and definitions, professional sanctions and civil fines, the real core of the law is the statement in Section 4:
“Abortion limited to fifteen (15) weeks of pregnancy except in medical emergency and in cases of serious fetal abnormalities.”
In a 6-3 decision, with Chief Justice John Roberts delivering a concurring opinion, the SCOTUS (an acronym for the Supreme Court of the United States, for those of us not bothered by having constitutional lawyers in our social circles) ruled. to overturn the precedent previously set by cases such as Roe vs. Wade and Planned Parenthood Vs. Casey, which upheld a constitutional right to abortion. The cases of Roe and Casey previously allowed states to set some parameters that limited access to abortion for pregnancies that were not in the state of fetal viability — generally around 24 weeks, when a premature baby is more likely than not to survive.
Roberts’ concurrence is notable in that, while he agreed with the decision to uphold Mississippi’s law, he did not agree with the majority’s overall decision to completely overturn Roe.
With SCOTUS’ reversal of these precedents, the legality of abortion returns to state legislatures and courts. Many states have strong laws protecting abortion as a right in their state constitutions, while others had “trigger laws” that went into effect immediately after the court’s decision outright banning all abortion procedures except for medical emergencies.
A brief history of the Roe vs. Wade precedent
In 1973, the Supreme Court ruled 7-2 that pre-viability abortion was protected by the US Constitution in the case of Jane Roe, et al., Appellants, vs. Henry Wade. The precedent gave states some latitude to regulate during the second trimester of pregnancy and a great deal of latitude for state-based regulation during the third trimester.
Proponents and opponents alike point to the complete absence of any actual discussion or mention of pregnancy, abortion, menstruation, or general terminology surrounding female anatomy of any kind in the Constitution and broader federal regulation. The precedent arose from what the court called an “implied right to privacy” under the 14th Amendment. Specifically, Section 1 states:
“All persons born or naturalized in the United States, and subject to its jurisdiction, are citizens of the United States and of the State in which they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States ; nor shall any State deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
This due process and equal protection passage, along with the Bill of Rights, the court said, implies the right to privacy for American citizens, including the right to make personal medical decisions regarding bodily autonomy.
Before Roe, there was no US federal policy regarding abortion. Some states had laws protecting abortion as a fundamental right; others—like the Texas law that led to Roe—criminalized abortion for reasons other than medical emergencies. Likewise, the end of Roe vs. Wade as the nation’s precedent on abortion laws state regulations as a patchwork of defenses and prohibitions.
Abortion and health insurance
Unsurprisingly, although Roe vs. Wade was the accepted precedent law in the country, insurance coverage and regulation of the procedure has been uneven. Several variables affect whether an abortion is covered by health insurance.
- First, even before Dobbs vs. Jackson SCOTUS decision, affected state rules of what was or was not covered by insurance policies regulated in those states. Some states banned coverage, some states banned it, and others made exceptions for life-threatening conditions, rape, incest, or birth defects—this hasn’t changed.
- Second, it matters what type of insurance coverage a person has; Affordable Care Act marketplace plans (Obamacare), Medicare and Medicaid health plans, TriCare (military insurance), and employer-sponsored plans may follow different rules entirely even within the same state.
- Third, coverage depends on whether the Hyde Amendment is in effect.
Although the overturning of Roe vs. Wade can move state governments to further act to protect or ban abortion, the basic nature of abortion insurance coverage is unlikely to change—barring congressional action, it will remain a patchwork of policy gaps.
What is the Hyde Amendment?
The Hyde Amendment is a policy provision that prohibits the use of federal funding for abortion except in cases of rape, incest, or medical emergency. Congress votes each year to attach it as a rider to the annual appropriations bill for the Department of Health and Human Services.
By limiting federal funding for abortion, carriers that provide health insurance through the federal exchanges established by the Affordable Care Act (ACA) cannot cover most abortion procedures. However, states that protect abortion directly, such as Colorado or California, may have specialized funds specifically to ensure abortion coverage for ACA plans as well as for those covered by Medicare or Medicaid.
State Treatments of Insurer Coverage of Abortion
According to the Guttmacher Institute, six states mandate that all private insurance plans cover abortion, sometimes prohibiting copays or co-insurance, or tying abortion coverage to maternal and prenatal coverage.
Several states do not have definitive limits or protections one way or another on insurer coverage of abortion, according to the Guttmacher chart.
In addition, 11 states limit all private insurance plans for abortions to scenarios that are medical emergencies, and half of the states limit health exchange plans to only cover abortion for medical emergencies, with many of them also allowing coverage for rape or incest, and sometimes covering abortion for birth defects .
Louisiana and Tennessee prohibit all insurer coverage for abortion outright, regardless of circumstance or medical necessity.
But even limiting or banning private insurance coverage for abortion does not completely end coverage of the procedure. Private insurance plans must follow both state and federal law, so if a state limits the insurer’s coverage of abortion, a private insurer must follow state law. But employers who self-insure, meaning they use an insurer for administrative services or for their established provider network but pay claims out of pocket, are governed only by the federal Employee Retirement and Income Security Act (ERISA), according to previous Supreme Court decisions. So, self-insured employer health plans can still choose to cover—or not cover—abortions for a variety of reasons, regardless of state law and policy regulation.
Another consideration as both insurers and employers move forward is that, with more employees working across state lines, an employer plan may cover someone in a state with different abortion insurance laws. Other questions arise about whether self-insured employer plans can still cover procedures prohibited in their state, or whether they can set up a network extension of a preferred provider solely to provide this service through an out-of-state clinic where it is legal.
If you’re reading this and thinking it must be difficult for insurance companies to guess how to respond and when an organization is allowed, mandated, or prohibited from offering abortion as a covered service, you’re right. And thanks to Dobb’s decision, this area of insurance regulation is only going to get murkier in the immediate future.
The future landscape of abortion laws
Dobb’s decision has lit a flame under both advocates and opponents of abortion rights. The coming months (if not years) are likely to bring a series of headlines as voters, lawmakers and the judiciary race to protect abortion or ban it.
Many states have enacted laws that have effectively banned abortions for any reason other than medical emergencies, but many courts are putting them on hold as lawsuits on behalf of patients seeking abortions work their way through the legal system in those states.
Abortion rights advocates in Congress are also seeking to codify the procedure as a fundamental right in law instead of relying on the Supreme Court to determine the people’s rights through constitutional interpretation.
Lest anyone think there’s a chance this is “settled law” anywhere, consider that the Kansas Supreme Court upheld the state constitution to protect the right to abortion two years ago, effectively ending legislative attempts to restrict abortion procedures. So the state legislature has put the issue to the people, giving voters a special election decision on August 2, 2022 to vote on whether the Kansas Constitution protects the right to abortion or whether voters want the Kansas Legislature to be able to “pass laws regarding abortion, including, but not limited to, laws accounting for circumstances of pregnancy resulting from rape or incest, or circumstances of necessity when necessary to save the life of the mother.”
Meanwhile, employers have begun to weigh in, with some announcing new policies to cover travel expenses and abortion coverage regardless of what their health insurers cover through state-regulated policies.
The future is an uncertainty. Will states lean into the stark and ever-widening political divide and split into a patchwork of red and blue with similar abortion laws? Will the increased awareness of economic disparities and reproductive rights usher in a new era of welfare and justice? Will national unease with the Supreme Court decision lead to increased voter engagement and a more robust democracy?
Who the hell knows. Not us.
At AgentSync, we are committed to providing you with up-to-date information on regulatory changes affecting the insurance industry. So committed, in fact, that we’ve built a compliance library where you can read up on existing rules and stay up to date as things change.
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