With the announcement that Senator Ben Nelson (D-NE) had become the 60th vote in favor of the Senate health care reform bill, analysts on both sides of the abortion issue scrambled to interpret the language that was inserted to win Nelson’s support. Within the pro-life community, the reaction was strongly negative. The U.S. bishops, for their part, issued a more muted statement where they congratulated Senators Ben Nelson (D-NE) and Bob Casey (D-PA) for their efforts, but regretfully concluded that the bill language was still inadequate to win their support.
One can hardly blame the bishops for taking a firm stand, since every other legislator and interest group seems to be taking the same approach to the bill. Nevertheless, if the bishops remain serious in their commitment to the passage of comprehensive health care reform, they might want to consider taking a second look at what we might call, for lack of a better term, the “Nelson Amendment.” While the Stupak Amendment in the House bill is more far reaching in terms of achieving pro-life goals, a closer look at the Nelson Amendment suggests it could meet the USCCB’s stated test that health care reform be “neutral” with respect to current law on abortion.
First of all, pro-life advocates would do well to realize how far they have come on this legislation. Under earlier versions of the House and Senate bills, the federal government could have mandated that all insurers cover abortion services. That is no longer the case, although insurers are not prohibited from offering policies that cover abortion.
The Capps Amendment to the House bill, while stating that abortion could not be included as part of the standard benefits package, weakened this by requiring all of the health exchanges to offer at least one plan that covered abortion. This provision, too, has now been eliminated by the Stupak amendment.
The sticking point is whether there are any circumstances under which individuals who purchase coverage—subsidized or not—through the exchanges would be able to purchase a policy that covered abortion. In the House’s reform legislation, the Stupak amendment would appear to prevent anyone obtaining federal subsidies from purchasing a policy that covered abortion. However, it also appears that individuals who use their own funds to purchase a policy through the exchange would still be able to purchase coverage for abortion.
The Senate bill takes a different approach. For starters, states can now choose to prohibit abortion coverage in any policy purchased through the exchange. I believe this is actually stronger than Stupak’s language, but I welcome other interpretations. In states that do not choose this option, abortion coverage is still treated differently from other benefits. Insurers must bill enrollees separately for the cost of this coverage and the funds from those payments must be segregated from other premium payments and from any subsidies the enrollee may receive under the bill. The legislation contains enforcement provisions for these requirements.
As noted earlier, many pro-life advocates object to the Senate language. They argue that the accounting requirements are a legal fiction and that federal funds—ultimately co-mingled with the insurer’s other funds—will find their way into the pockets of abortion providers. They also object to the fact that all individuals who enroll in a plan that covers abortion services will have to pay the surcharge to cover those services, even if they are morally opposed to abortion.
The argument continues to turn on what constitutes “neutrality” with respect to abortion. Pro-life advocates argue that “neutrality” demands that the principles of Hyde should apply whenever the federal government pays, indirectly or indirectly, for health care services. Defenders of this point to how the Hyde principles have been applied to the Federal Employees Health Benefit Plan and the Children’s Health Insurance Program, which are both cases where the federal government is subsidizing the purchase of private insurance.
The problem is that health care reform bill will do more than merely pay for insurance. It will also restructure the insurance market. The exchanges are poised to become the de-facto source of insurance coverage for individuals not covered by their employers or other public plans. Pro-choice advocates are concerned that insurers who currently offer abortion coverage in the individual market will no longer do so because the vast majority of those using the exchange will be receiving federal subsidies and thus be unable to purchase abortion coverage. Offering supplemental abortion coverage for the small number of unsubsidized individuals who use the exchange may not be economically viable for many insurers. Thus, what seems neutral in the law may result in changes in insurance practice that tilt in a pro-life direction.
Given that the vast majority of individuals we are talking about are uninsured, however, I’m not sure how large this problem is. These individuals, at least, are not losing any coverage that they currently have. Only individuals who currently purchase policies in the individual market that cover abortion would be at risk of losing any of their current coverage. It would be useful to have an estimate of how many individuals would fall into this category.
One of the objectives of the Senate language is to render it more economically viable for plans that cover abortion to continue to do so once they participate in the exchanges. If you take the pro-choice concerns raised above seriously, this is an effort to remedy a bias in the private insurance market created by the language that prevents federal subsidies from being used to fund plans that cover abortion. If you are on the pro-life side, you probably see this as an effort by the federal government to promote abortion coverage.
For what it’s worth, though, my opinion is that the Nelson Amendment does not violate the principles embodied in the Hyde Amendment, i.e. that federal funds should not be used to pay for—either directly or through insurance—abortion. I believe this for two reasons. First, I see the point of the language allowing individuals who obtain subsidies to purchase abortion coverage with their own funds as pertaining to the federal government’s role in structuring the insurance market rather than subsidizing the purchase of insurance per se. While the principle of neutrality demands that the federal government not subsidize abortion, it also demands that the federal government not structure insurance markets in such a way as to significantly change the business calculations of insurance companies with respect to the provision of abortion coverage for those who currently have it.
A second reason why I don’t feel the Senate bill subsidizes abortion coverage is that I do not agree with those who see the Nelson Amendment’s language requiring the segregation of funds as meaningless. I would suggest that those making this argument have little actual experience with generally accepted accounting principles and how businesses actually respond to federal and state regulations that impact their accounting.
A personal example may help make the point. In my company, my department is funded by a trust fund that was established pursuant to a collective bargaining agreement currently in force. All employees covered by the agreement contribute a small amount from every paycheck to the trust fund, which is jointly governed by a board of union and management representatives. Federal law imposes restrictions on how these funds can be spent and the board reviews fund expenditures to ensure we remain in compliance with that law. I can assure you that we take the restrictions imposed by the law very seriously.
Almost any large organization—governments, businesses, not-for-profit entities—faces situations in which some of the funds coming in the door are restricted for a particular purpose. I can easily imagine insurers setting up a dedicated cost center on the expense side for payments to abortion providers and a similar cost center on the revenue side for the abortion-surcharge payments from enrollees. If the costs on the expense side exceed the funds received on the revenue side, then a subsidy is occurring. If that is not happening, then the subsidy isn’t happening. Anyone who thinks this is only a gimmick has obviously never had to explain to their superiors why there is an overage in one of their cost centers!
I am willing to concede that opponents of Nelson may be able to make an argument as technical as this one in the opposite direction. What that suggests to me, though, is that we have clearly left the realm of general moral principles and entered a place where individual Catholics acting in good conscience can come to different prudential judgments. For this reason, I think it would be advisable for the U.S. bishops to make clear—as they have done on other contested public policy issues—that their negative opinion of the Senate bill reflects their own collective judgment, but is not a statement of Catholic teaching to which individual Catholics necessarily owe assent.