Coming from Trump's HHS in 2020: Hey, Everyone! Remember to pay your Abortion Bill each month!

Update 12/20/19: I originally posted this in November 2018. It took over a year, but see the latest updates at the bottom...

About a year ago I did a little back-of-the-envelope number crunching regarding the insanely stupid way in which the Affordable Care Act handles the Hyde Amendment.

In U.S. politics, the Hyde Amendment is a legislative provision barring the use of federal funds to pay for abortion except to save the life of the woman, or if the pregnancy arises from incest or rape. Legislation, including the Hyde Amendment, generally restricts the use of funds allocated for the Department of Health and Human Services and consequently has significant effects involving Medicaid recipients. Medicaid currently serves approximately 6.5 million women in the United States, including 1 in 5 women of reproductive age (women aged 15–44).

Republicans (and a handful of anti-choice Democrats) decided that the Hyde Amendment presented a major problem for the Affordable Care Act when it comes to the federal financial subsidies included in the law when it was being debated and voted on back in 2009-2010:

Let's say a woman is enrolled in an ACA policy which includes abortion services for, say, $400/month, and they receive $300/month in subsidies. They pay their $100 portion and the federal government covers the balance. Let's further say that she happens to have an abortion at some point which is paid for by her policy.

The dilemma, in the minds of the anti-choicers, is that there's "no way of knowing" whether the payment for that abortion to the insurance carrier is coming out of the $100 paid by the enrollee or the $300 paid by the federal government. This, of course, is incredibly stupid, but that's what they went with, and so in order to get the ACA through the legislative (and judicial) process, an incredibly convoluted compromise was arranged for:

The ACA allows the coverage of abortion services through the marketplaces but includes a number of restrictions and requirements that insurers must follow before covering non-Hyde abortions. Many, though not all, of these restrictions are outlined in Section 1303 of the ACA, which includes specific rules related to the coverage of abortion services by QHPs and has been the subject of previous litigation. In particular, Section 1303:

• Prohibits insurers from using any portion of premium tax credits or cost-sharing reduction payments to pay for non-Hyde abortion services;
• Requires insurers to inform consumers in their summary of benefits and coverage that the QHP they are considering includes coverage of non-Hyde abortion services; and
• Requires insurers that cover non-Hyde abortions to determine the cost of and then separately collect and segregate funds for non-Hyde abortion services.

Section 1303 further specifies that individuals who purchase insurance that covers abortions must pay at least one dollar into a separate account specifically designated for abortion. These segregated accounts are designed to help ensure that the accounts are 1) funded solely by the enrollee’s premium (rather than by the premium tax credit) and 2) used exclusively to fund non-Hyde abortion services.

Section 1303 also allows states to ban the coverage of abortions by QHPs sold through the marketplaces: to date, twenty-six states have done so. In an additional six states, no marketplace plans offered coverage for abortion during the 2016 plan year. Two states—California and New York—require health plans to cover abortions, subject to an exception for multistate plans, at least one of which in each state must offer insurance without abortion coverage.

Get all that? The insurance carrier sends an invoice for $400 every month, and when the payment comes in, $399 of it goes into one corporate bank account while $1 goes into a second bank account. That's $12 per year per enrollee. And since the policies in question are identical regardless of gender or age, that means everyone enrolled in the policy has to pay $12/year, including men as well as women of non-child-bearing age.

As a side note, I have no idea how this is handled in cases where the APTC subsidies cover 100% of the enrollee's premiums. UPDATE: Well, that question has been answered; see below...

I went on to note that...

The actual wording of Section 1303 clarifies that the "separate account" payment has to be at least $1.00 per month per enrollee:

(C) <<NOTE: Cost estimate.>> Actuarial value of optional service coverage.-- (i) In general.--The Secretary shall estimate the basic per enrollee, per month cost, determined on an average actuarial basis, for including coverage under a qualified health plan of the services described in paragraph (1)(B)(i). (ii) Considerations.--In making such estimate, the Secretary-- (I) may take into account the impact on overall costs of the inclusion of such coverage, but may not take into account any cost reduction estimated [[Page 124 STAT. 171]] to result from such services, including prenatal care, delivery, or postnatal care; (II) shall estimate such costs as if such coverage were included for the entire population covered; and (III) may not estimate such a cost at less than $1 per enrollee, per month.

This sparked me to do some extensive data analysis, which led me to the following conclusion:

Assuming I'm reasonably close with all of this (and I could be way off, I admit), it looks like nationally, individual market carriers have deposited roughly $106 million into "abortion-only" acounts over the past four years but have only paid out perhaps $14 million in abortion claims, leaving them with around $92 million just sitting there gathering dust, untouchable for any other purpose.

Assuming the ACA, the Hyde Amendment and everything else stays intact for the next, say, 20 years or so, and assuming that population growth, abortion rates and inflation roughly match each other, that means there could be as much $600 million in those accounts by 2037.

That was a year ago. As of today I figure those numbers have reached perhaps $130 million and $18 million respectively, so there's likely well over $100 million sitting in these "abortion accounts" right now.

All of which leads to the latest insanity, announced this week:

Trump administration proposes new rule requiring separate premium bills for abortion coverage

The Trump administration wants insurers that offer plans through Access Health CT, Connecticut’s Affordable Care Act exchange, and other exchanges nationwide, to send people separate monthly bills for the cost of their abortion coverage — in addition to the bill they get for their regular premium costs.

This means people would receive two separate bills in the mail or electronically — one to cover the premium costs for services such as primary care, mental health, maternity, etc. — and another one solely for the cost of their abortion coverage premium.

People on the exchange would also have to make two separate payments for these bills, according to a proposed rule recently released by the Centers for Medicare and Medicaid Services (CMS).

Yes, that's right: The Trump Administration is now insisting that insurance carriers send out separate bills for $1.00 per month per enrollee, specifically for "Abortion Services" or whatever the euphemistic language they decide to go with is. Between printing, postage, processing and so forth, there's a good chance it will cost the carriers more than $1.00 per enrollee anyway, which will lead some of them to drop abortion coverage from their policies altogether, which is of course the entire point.

In addition, this will humiliate and embarrass many women enrolled in the policies as they're further degraded by having an extremely personal and sensitive medical issue specifically called out. And of course I guarantee that thousands of people will end up receiving late payment notices (potentially even losing their coverage eventually) even when they pay their premiums regularly because they didn't notice the second invoice for a mere $1.00 that shows up each and every month.

This is stupid, inefficient, wasteful and cruel all at once...which makes it perfect for the Trump Administration.

UPDATE: Ugh. It's even worse than I thought. This article from HealthAffairs adds more details to the new proposed rule, including confirmation of my suspicions above:

As proposed, the rule would require insurers to send—and consumers to pay—two entirely separate bills for the amount of the premium attributable to certain abortion services and the amount of the premium for all other services. The rule could result in significant burdens on insurers and consumers as well as consumer confusion. Consumers would face the potential for termination of coverage if they did not pay both bills in full. Comments on the proposal are due within 60 days.

...Insurers would be required to bill all consumers at least $1 per enrollee per month (even if a consumer’s premium is less than $1 per month because of APTCs). In addition, insurers must actually transmit the bills separately—they must be sent to enrollees in separate envelopes with separate postage or in separate emails—from communications about the plan’s overall premium. HHS, somewhat bewilderingly, suggests that this would “help reduce consumer confusion about receiving two separate bills in a single envelope.” Insurers must also develop separate invoices or bills for non-Hyde abortion services.

Yes, that's right: Even people who have 100% of their exchange-purchased ACA-compliant policies paid for by tax credits...and who therefore are going to assume they don't have to pay anything for their monthly premiums...will still receive an invoice for $1 each month. Not only does this appear to violate the letter of the law (after all, they're supposed to be eligible for 100% APTC subsidies, not 99% or whatever), it also will absolutely lead to mass confusion among the hundreds of thousands of $0-premium enrollees who will feel like they were lied to by HealthCare.Gov, many of whom will likely simply throw out the invoice assuming it's a mistake or a scam, and some of whom will almost certainly end up losing coverage a few months later because they failed to pay $3 for 3 months of abortion services:

HHS maintains that nonpayment of any premium, including the portion attributable to non-Hyde abortion coverage, could trigger a premium payment grace period and potentially result in the termination of coverage.

There's one pretty pathetic silver lining for enrollees, I suppose; they are allowed to cut one check instead of two, which I guess they're supposed to feel grateful for:

...If a consumer continues to pay their entire premium in a single transaction, an insurer must accept the combined payment. An insurer could not terminate coverage based on the fact that an enrollee did not send two separate checks.

...this won't make the insurance carrier any happier, however:

If that occurs, an insurer would be required to disaggregate the funds for non-Hyde abortion services into a separate account. Under the proposed rule, the insurer would then advise the consumer to pay the premiums separately and document its outreach and education efforts on this specific issue.

And how much will all of this utterly unnecessary and confusing nonsense cost?

HHS estimates that 75 QHP insurers offered a total of 1,111 plans covering non-Hyde abortions in 17 states; the new burden of separate invoices and billing for these insurers would cost about $1.6 million annually. The proposed rule would also affect an estimated 1.3 million consumers nationwide who would need to separately pay a non-Hyde premium. The estimated burden on consumers is $30.8 million, excluding the cost of “consumer learning” as consumers try to navigate two separately mailed bills.

$1.6 million per year sounds awfully low to me. Assuming the 1.3 million figure is accurate, that means the carriers have to send out 15.6 million additional invoices per year. I don't know how many of these are sent via email vs. physical postage, but assuming it's 50/50, that's nearly 8 million pieces of mail per year. I know large corporations have bulk prepaid postage options etc, but it still seems to me that'll cost a lot more than $0.20 per invoice, especially when you add updates/changes to their internal billing systems, computer systems and so forth, as well as having to then redirect each $1 payment (12 per year, per enrollee!) to the appropriate bank account. Insanity.

I realize $1.6 million doesn't sound like much when spread out across over a million people, but that's the whole point: A massive, burdensome administrative infrastructure over a piddly amount of money...most of which, as I noted above, will never be used to pay for abortions anyway (which, once again, are legal medical procedures). For that matter, $30.8 million / 1.3 million = around $24 per enrollee.

...The potential burden on consumers is far greater, including an estimated $30.8 million annually. This is even without accounting for what HHS describes as consumer learning, which could entail “significant upfront costs” and “continue to be resource intensive on an ongoing basis given the potential confusion of consumers in receiving multiple bills.” As HHS acknowledges, there is a significant concern that consumers would not understand the need to pay both bills. I posit that some may be understandably wary of a second, separate bill for $1 (or another relatively small amount) that may look, to them, to be fraudulent or suspicious.

This consumer confusion is critical because those who do not understand the need to pay both bills run the risk of having their coverage terminated. The proposal takes some steps to address this concern—by allowing insurers to accept a collective premium—and refers to the potential to lose coverage as “an unreasonable result” if a consumer paid their premiums in full. However, the proposed rule offers no protection for consumers who in good faith do not understand the need to pay the separate bill for non-Hyde abortion and could lose access to their coverage because of their confusion.

Oh, yeah, and there's one more thing:

This part of the proposed rule would also disproportionately affect enrollees in state-based exchanges. Overall, HHS estimates that the proposal would increase the burden on 1.3 million enrollees. Of these, about 1 million obtain coverage through a state-based exchange. The rule would also impose new burdens on consumers who are eligible for $0 premium plans because of APTCs. If these consumers select a plan with non-Hyde abortion services, those consumers would be required to pay out-of-pocket only for those services.

Yes, that's right: 77% of those impacted by this live in one of the following states: California, Colorado, Connecticut, DC*, Idaho, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont or Washington. What do 11 of these 12 have in common? That's right: They're all blue states, and in fact two of them (CA and NY, along with Oregon) legally require carriers to include abortion coverage. As for the 12th one, Idaho:

Idaho has exceptions for cases of rape, incest, or to save the woman’s life for plans sold on the Marketplace, but limits abortion coverage to cases of life endangerment to the woman for all other private plans issued in the state.

Gee, isn't that nice of them?

*(Yes, I know DC isn't a state, but it's considered a state-based exchange under the ACA.)

UPDATE x2: Thanks to both Wesley Sanders and Rebecca Stob for clearing up one point of confusion I had about people enrolled in "$0 premium" plans:

Well, abortion isn’t an EHB so it would be impossible for someone wth a plan that has abortion coverage to have a $0 premium. Non-EHBs can’t be covered by APTC.

— Wesley Sanders (@wcsanders) November 12, 2018

APTC is never allowed to cover non-EHB or abortion premium (which is treated as non-EHB) so everyone was already supposed to be paying the $1 PMPM

— rebeccastob (@rebeccastob) November 12, 2018

This is a great example of why I always protest when people claim that I know "everything" about the ACA, when clearly I don't. Apparently people enrolled in "$0-premium" plans which cover abortion are already paying $1/month today anyway, which I guess reduces some of the confusion.

On the other hand, the new rule states that the abortion invoice has to be separated out from the rest of the policy coverage. I wonder if the carriers will have to start sending out two separate invoices even when one of them is for $0.00? That is, a $0 invoice for most of the policy as well as a $1 invoice for abortion services? As dumb as that would be, it's perfectly in line with the rest of the absurdity above.

UPDATE x3 (12/20/19): Welp. It took over another full year, but apparently this absurdity is finally going into effect after all, albeit with a few minor tweaks:

HHS issued a rule this morning that requires insurers to send a separate bill for $1 for abortion services to those in the exchange with some tweaks.

— Dania Palanker (@DaniaPal) December 20, 2019

More rules expected on nonpayment, but for now, they are allowing insurers to not terminate those who don't pay the separate abortion bill by not taking enforcement action.

"Specifically, HHS will not take enforcement action against a QHP issuer that adopts and implements a policy, applied uniformly to all its QHP enrollees, under which an issuer does not place an enrollee into a grace period and does not terminate QHP coverage based solely on the policy holder’s failure to pay the separate payment for coverage of non-Hyde abortion services."

— Dania Palanker (@DaniaPal) December 20, 2019

The only saving grace I see here is that it looks like the policy won't actually start until 2021. I presume if a Democrat wins the White House in 2020, their incoming HHS Secretary will reverse this rule, although it would likely be at least a few months into the new year before they'd actually be confirmed and able to do so. They might even have to wait until 2022 to make such a change...I don't know how much ability they'd have to change this sort of policy mid-year:

We are finalizing this proposal to add paragraph (d)(3) as proposed, but have changed the implementation date to the 2021 calendar year, and have added some clarifying language with regard to fully integrated eligibility systems, as described below.

...We agree with commenters that requiring implementation by the 2020 calendar year may not provide State Exchanges with a sufficient timeframe to implement these changes, especially for Exchanges without integrated eligibility systems that do not currently perform Medicaid/CHIP PDM or those that currently do not perform Medicare PDM. These Exchanges would need to implement new interfaces with their respective Medicaid programs and/or a new connection to federal data to confirm Medicare enrollment. Therefore, we are finalizing the proposal in §155.330(d)(3) to take effect beginning with the 2021 calendar year.

UPDATE x4: Hmmmm...ok, strike that last bit: Wesley Sanders notes that it actually goes into effect for HealthCare.Gov states starting in June 2020; the 2021 date refers to the 13 state-based exchanges:

We are removing the April 1st deadline from §155.1200(b)(1) to allow HHS to align the deadline for submission of the financial statement to HHS with the deadline for submission of SMART reports, currently June 1.

yeah, SBEs have to do some enhanced data matching and program integrity stuff by 2021, but the Hyde changes have to be implemented by the first billing cycle after June 21, 2020.

— Wesley Sanders (@wcsanders) December 20, 2019