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The existing patchwork of federal and state rules governing insurance coverage of abortion is set to become even more complicated in light of the Supreme Court’s decision Friday to overturn Roe v. Wade, the landmark case that established a constitutional right to abortion.
Different types of health insurance — including various categories of employer group health plans, Affordable Care Act marketplace plans and Medicaid — fall under varying sets of rules that affect their ability to cover abortion. As state laws shift in the wake of the Supreme Court ruling, that coverage may become even more patchy, insurance and policy experts say.
“It’s going to be really messy and more confusing for everyone involved,” said Fabiola Carrión, the director of reproductive and sexual health at the National Health Law Program, a health-rights organization that advocates for insurance coverage of abortion services.
The situation has many employers on edge, said Sarah Raaii, a senior associate at the law firm McDermott Will & Emery. “We’ve had a huge influx of employers reaching out and asking, ‘What should I be doing? Are there risks?’” she said, adding that many employers are concerned about clearly communicating potential lapses in coverage. Employer health plans cover about half the U.S. population.
Lack of insurance coverage is ‘a big barrier to access’
Due to insurance-coverage restrictions, most people already pay for abortion out of pocket, according to a recent study by researchers at the University of California San Francisco.
The median charge for a first-trimester procedural abortion climbed more than 20% between 2017 and 2020, to $575, while the median charge for medication abortion — which now makes up more than half of U.S. abortions — rose by 13% to $560, according to the study. Meanwhile, the proportion of facilities accepting insurance for abortions fell.
Lack of insurance coverage “has a huge chilling effect and is a big barrier to access for people who need abortions,” said Thomas Waldrop, a healthcare policy fellow at The Century Foundation, a think tank.
Some restrictions on insurance coverage of abortion emerged shortly after the Supreme Court’s 1973 Roe v. Wade decision. The Hyde Amendment, first passed in 1976, bars federal funding for abortions except in cases of life endangerment, rape or incest. The 2010 Affordable Care Act also allows states to prohibit abortion coverage in marketplace plans.
Self-insured health plans aren’t immune to criminal liability
For people in employer group health plans, abortion coverage may hinge on whether the plan is self-insured — meaning the employer pays employee claims out of pocket — or fully insured, meaning the employer buys coverage for workers through a commercial insurer. Self-insured plans generally aren’t subject to state insurance laws, and may have more leeway in deciding whether or not to cover abortion.
These plans are subject to a federal law governing employee benefit plans, and “under that, there’s no requirement to either include or exclude abortion coverage,” said Laurie Sobel, the associate director of women’s health policy at KFF, a healthcare think tank.
Self-insured plans, however, aren’t shielded from potential criminal liability under state law in states that take more restrictive positions on abortion.
“In the self-funded plan world, there would be potential liability if a resident of one of these restricted states obtained abortion services and the plan assisted in any way,” Raaii said. While some employers have announced they’ll provide travel benefits for employees who may need to travel out of state for abortions, those steps are “potentially risky,” Raaii said. “This is a bit of an unknown landscape as far as prosecutions go and enforcement of state law.”
Fully-insured employer plans, meanwhile, generally must follow state law on abortion coverage. Prior to the Supreme Court’s decision Friday, 11 states already restricted fully-insured plans’ coverage of abortion, while six states required private insurance plans to cover abortion — and additional states may take a stand on the issue in the wake of the court’s decision, legal experts say.
Restrictions under ACA, Medicaid and Medicare
In many states, people with Affordable Care Act marketplace plans already face restrictions on abortion coverage. Twenty-six states prohibit marketplace plans from covering abortion, with certain exceptions, according to KFF, while a handful of states require these plans to cover abortion.
The Supreme Court decision may prompt a number of states that have not yet taken a position to ban the coverage in marketplace plans, require it, or regulate it in some other way, says Louise Norris, a health-policy analyst for HealthInsurance.org, an online health-insurance guide.
Abortion coverage for people relying on programs that receive federal funding, such as Medicaid and Medicare, is generally restricted by the Hyde Amendment. (In addition to covering older people, Medicare covers many people under 65 who have disabilities.) Close to three dozen states limit Medicaid coverage of abortion to cases of life endangerment, rape or incest, according to KFF.
Because Medicaid is jointly funded by federal and state dollars, some other states use their own funds to offer broader abortion coverage under the program. But “since Medicare is only federally funded, states can’t step in on that,” Norris said.
