WASHINGTON, D.C. – Attorney General Karl A. Racine today joined six other Attorneys General in filing a lawsuit to stop the Trump administration from threatening access to safe and legal abortion care for individuals who purchase health insurance through state health care exchanges. This coalition, led by California and New York, is challenging a new rule issued by the Department of Health and Human Services (HHS) which unlawfully reinterprets part of the Affordable Care Act (ACA). The new rule imposes expensive and confusing billing requirements on health plans that cover abortion care and are sold through state insurance exchanges. This change creates major burdens for state insurance exchanges and puts millions of consumers at risk of accidentally losing health insurance coverage. The lawsuit is seeking to stop the rule’s implementation.
“The Trump administration’s relentless attack on safe and accessible abortion care puts tens of thousands of District residents and workers in jeopardy of losing their health care access through our exchange,” said AG Racine. “If this rule is implemented, it would dramatically increase health care costs for residents and the District—and the burdens it imposes could mean that insurance companies stop offering abortion care entirely. We filed this lawsuit to stand up for the rights of District women and families to make their own reproductive decisions.”
The ACA was enacted in 2010 and has enabled more than 20 million Americans to gain health insurance coverage. This landmark legislation also improved the quality and affordability of insurance for people who were already insured. Section 1303 of the ACA gives states flexibility on how to protect reproductive rights and whether to allow plans sold on state exchanges to include abortion coverage. However, this section prohibits using federal funds to pay for abortion services, as required by other federal laws.
In the District, the DC Health Benefit Exchange Authority (DCHBX) operates the online health insurance marketplace, DC Health Link. Through DC Health Link, more than 100,000 individuals and people who work for District small businesses receive health insurance coverage. Since its creation, DCHBX has cut the District’s uninsured rate by 50 percent and now more than 96 percent of District residents are covered. The District protects reproductive rights and does not restrict access to abortion. In fact, all health plans offered on the District’s individual insurance marketplace cover abortion care.
On December 27, 2019, HHS issued a final rule requiring all health plans participating in state exchanges to send separate bills for any portion of insurance premiums that go toward abortion coverage. The rule also requires consumers to pay both bills or risk losing all of their health care coverage.
HHS itself has conceded that requiring separate bills and separate payments will lead to consumer confusion, putting millions of Americans at risk of losing coverage if they inadvertently fail to make full premium payments on time. The rule will also burden states with unnecessary administrative costs and harm consumers who will face higher insurance premiums as a result of increased costs to carriers. For example, initial compliance is expected to cost all impacted insurance companies nearly $400 million, with another $100 million in estimated annual costs to maintain the separate billing systems. These excessive costs put pressure on insurers to remove abortion coverage from their plans.
The coalition has filed suit because the new rule:
- Increases costs and limits access to health care: The costs of implementing new billing systems will result in consumers paying higher premiums. The rule will also cause people to lose coverage because of failure to pay two different bills for the same policy, or because insurers improperly apply payments. Even consumers who maintain their coverage will have more limited access to reproductive health care, as many insurers will respond to financial pressures and stop covering abortion. If insurers drop coverage for abortion, thousands of District residents and millions of women and men across the country will be impacted. Costs for such medical procedures will be shifted from insurance companies to women and families.
- Imposes unnecessary administrative costs on states: The States will suffer substantial harm because their exchanges and regulatory agencies will incur unnecessary administrative costs. For example, DCHBX estimates that it will incur additional costs of approximately $3.93 million annually in FY20 and FY21 directly related to the rule, and additional costs to educate the public about its impact, their rights, and how to avoid losing coverage.
- Violates the Constitution: The states argue that the rule violates the Constitution by improperly infringing on state sovereignty. It penalizes states that allow or require qualified health plans to provide abortion coverage in its state-based exchanges allowing federal interference in and withholding of federal fund to state administration of its health care laws and exchanges.
- Violates the Administrative Procedures Act: The new rule violates the Administrative Procedures Act (APA) in multiple ways. It contradicts the statutory language of the ACA, which clearly allows insurers to provide abortion coverage, by unduly burdening carriers’ provision of this coverage. It also violates other sections of the ACA, including a section that prohibits the development of regulations that create unreasonable barriers to the ability of individuals to obtain appropriate medical care and a section which provides anti-discrimination protections in health programs. Additionally, the rule is arbitrary and capricious because it fails to consider critical impacts of the rule and failed to provide a reasoned justification for the changes.
“I applaud Attorney General Karl Racine for challenging the Trump administration’s latest attack on women and their families,” said DC Health Benefit Exchange Authority Executive Director Mila Kofman. “If not stopped by the courts, this new federal rule will cause residents to lose health insurance, will cause premiums to increase because more than half a billion dollars for implementation costs will be shifted to consumers nationwide, and women and their families could lose insurance coverage for critical medical care.
ED Kofman continued: “Insurers don’t send two bills and don’t require two payments for an insurance policy because insurers actually want to keep people insured. This latest attack on the ACA by the Trump administration is making women a preexisting condition and taking us back to pre-ACA days.”
A copy of the complaint can be found at: https://oag.dc.gov/sites/default/files/2020-01/ACA-Abortion-Billing-Complaint.pdf
AG Racine joined today’s lawsuit alongside the attorneys general of California, New York, Maine, Maryland, Oregon, and Vermont.