How Overturning Roe v. Wade Would Complicate Insurance Coverage for Abortions

ByMargie D. Moore

May 4, 2022 , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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The end of a constitutionally protected right to abortion in the U.S. could push more large employers to pay for travel for out-of-state abortions, creating a thicket of insurance workarounds and uneven access, as around two dozen states would likely institute abortion bans if Roe v. Wade is overturned.

States have significant power to limit insurance coverage of abortion, and they have already done so across much of the country. Large employers that self-fund their insurance plans, however, are exempt from state regulation and could continue to offer abortion coverage even if their state bans abortions, though the abortion would need to be performed out-of-state. A number of companies, including Citigroup (ticker: C) and Amazon.com (AMZN), have already put policies in place to pay for abortions for workers in states where abortions become illegal.

​But these efforts offer nothing to workers at smaller companies or to people who receive publicly funded health coverage. What’s more, they will create complexities for abortion providers, who will be left to work through difficult billing questions as workers at larger companies cross state lines to receive care.

“If you had a big self-insuring employer in the state, the self-insuring employer could decide to continue coverage of abortion and, you know, women could potentially go out of state for their care,” says Sara Rosenbaum, a professor of health law and policy at the George Washington University School of Public Health and Health Services.

The insurance landscape for women seeking an abortion is already spotty, even with Roe v. Wade in effect. Insurance coverage of abortion care is required in only six states, including California, New York, and Illinois. But with the landmark abortion ruling now widely expected to be overturned following Monday night’s leak of a draft Supreme Court opinion, observers expect the landscape to get considerably more restrictive.

There are 22 states that will automatically institute abortion bans if Roe v. Wade is overturned, according to the Guttmacher Institute, a research and policy group focused on reproductive rights, and four more that the institute says are likely to institute such bans.

“I assume that any state that makes abortion illegal, that makes it an illegal procedure, would therefore outlaw the [insurance] policies that cover abortion,” says Rosenbaum.

​On a federal level, the so-called Hyde Amendment already bars the use of federal funds for abortion except in cases of rape, incest, or in which the mother’s life is endangered. That affects Medicaid, the federally funded program that provides insurance coverage to low-income Americans. In most states, Medicaid will not fund abortions except when those abortions are allowed under the Hyde Amendment. In sixteen states, the Medicaid programs use state funds to pay for abortions through Medicaid, according to Guttmacher.

​Meanwhile, half of states put restrictions on abortion coverage provided by insurance plans offered through the health insurance exchanges created through the Affordable Care Act. Eleven states restrict insurance coverage offered through private plans.

​Those states, however, can regulate ​only ​what are known as fully insured private plans. Self-insured, or self-funded, plans are regulated by the federal government, under the terms of the 1974 law known as ​ERISA. That means that many large employers that choose to self-insure can set their own policies, even if they are located in states that ban abortion, or ban insurance coverage of abortion.

A number of companies have ​​already announced policies to pay for employee travel to receive abortion care in response to a strict abortion law signed late last year in Texas. Companies that have made such announcements include Match Group (MTCH), Citigroup, and others, according to Bloomberg. Amazon, meanwhile, confirmed Tuesday that it will reimburse its U.S. employees and eligible dependents for up to $4,000 in travel expenses a year for non-life-threatening medical treatments.

Paying employees to travel for care, however, will create complexities for out-of-state abortion providers.

“The providers themselves probably will be challenged to be able to take all these different types of insurance,” says Lori Sobel, associate director for women’s health policy at the Kaiser Family Foundation. “If you’re in California, are you in network for a fully insured plan in Texas? Or do you even know how to bill?”

Such policies, meanwhle, won’t help the unemployed, or people whose employers don’t happen to self-insure.

“Whatever these restrictions are, whether it’s on coverage or access… they fall hardest on the people in our communities, on the women in our communities, that don’t have the means to travel to get an abortion if they can’t get one in their local community, or don’t have the funding to pay for it out of pocket if they don’t have insurance coverage,” says Jamila Taylor, director of health care reform and senior fellow at the Century Foundation, a progressive, nonpartisan think tank.

Write to Josh Nathan-Kazis at [email protected]

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