On June 28, 2021, the U.S. Department of Health and Human Services (HHS) (along with the Department of the Treasury) issued a notice of proposed rulemaking (NPRM) that would, among other changes, reverse Trump-era insurance regulations requiring separate billing and collection of payments for certain abortion services. As explained more below, HHS proposes that Congress’s mandate that insurance payments for certain abortion services are “separate” could be satisfied with combined payments.
Section 1303 of the Patient Protection and Affordable Care Act (ACA) establishes “special rules relating to coverage of abortion services.” Under the section, no qualified health plan is required to provide coverage of abortion services, but such coverage is not prohibited. For plans that include abortion coverage, they are prohibited from using federal funds to pay for abortion services for which taxpayer dollars are restricted under the Hyde Amendment (“non-Hyde abortion services”).
As part of the prohibition on the use of federal funds, section 1303(b)(2) states that the insurer of a plan “shall collect from each enrollee in the plan . . . a separate payment for each of the following”: (a) the premium amount for coverage of non-Hyde abortion services, and (b) the premium amount for coverage of services excluding non-Hyde abortion services. These “separate payments” “shall” be deposited into “separate allocation accounts”—one for all payments for non-Hyde abortion services and one for all payments for other services. Section 1303 also states that for enrollees whose plan premium is paid through employee payroll deposit, the separate payments listed above “shall each be paid by a separate deposit.”
HHS during the Obama administration provided guidance in 2015 as to three acceptable methods an insurer may use to satisfy section 1303’s separate payment requirement. An insurer may send the enrollee: (a) “a single monthly invoice or bill that separately itemizes the premium amount” for coverage of non-Hyde abortion services; (b) “a separate monthly bill for these services”; or (c) “a notice at or soon after the time of enrollment that the monthly invoice or bill will include a separate charge for such services and specify the charge.”
The Trump administration reevaluated this guidance, concluding that it did not “adequately reflect Congress’s intent”—namely, Section 1303 mandated that “issuers collect two distinct (that is, ‘separate’) payments, one for the coverage of non-Hyde abortion services, and one for coverage of all other services covered under the policy.” In December 2019, HHS issued separate billing regulations, requiring insurers to send “an entirely separate monthly bill” to the enrollee for only the premium amount for coverage of non-Hyde abortion services and instruct the enrollee to pay that amount “in a separate transaction from any payment” made for coverage of other services. In response to concerns over increased costs, the regulations allowed the separate bills to be mailed in the same envelope to eliminate additional mailing costs. The regulations further explained that if an enrollee made a single combined payment, the insurer could not refuse to accept the payment or use that as a basis to terminate coverage.
The separate billing regulations were challenged in three federal district courts, including by Planned Parenthood and a coalition of states led by then-California attorney general and now-Secretary of HHS Xavier Becerra. In April 2020, a district court in Washington found that the separate billing regulations conflicted with a Washington State statute that required health insurers to bill enrollees using a single invoice and enjoined the regulations within the state. The other two district courts, one in California and one in Maryland, each issued nationwide injunctions in July 2020, with both holding that the regulations were arbitrary and capricious under the Administrative Procedure Act and one holding that they were contrary to section 1554 of the ACA (which prohibits regulations that create “any unreasonable barriers” to obtaining “appropriate medical care” or impede “timely access to health care services”).
HHS initially appealed all three decisions, but the cases were put on hold with the change of administrations. Rather than defending the separate billing regulations, HHS under Becerra issued the current NPRM, titled “Patient Protection and Affordable Care Act: Updating Payment Parameters, Section 1332 Waiver Implementing Regulations, and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule.” Under the proposed rule, section 1303’s separate payment requirement could be satisfied in the same three ways identified in the 2015 guidance (using nearly identical language). If adopted, “separate payments” would include a single or combined payment.
The NPRM also proposes changes to other ACA regulations purporting to improve access to coverage, ensure affordability, reduce burdens for issuers and consumers, and promote “equity.” The proposed changes would:
- Reinstate the navigator program, which provides grants to community partners to help individuals “navigate” their insurance options under the ACA. In 2013 Planned Parenthood received around $655,000 under the navigator program, and the Trump administration significantly decreased the program’s funding. Along with increased funding, the proposed rule would also expand the program, including by requiring some post-enrollment assistance.
- Extend the annual open enrollment period from 45 days to 75 days. The current enrollment period from November 1 to December 15 would be extended to January 15.
- Expand access to insurance marketplace coverage for low-income consumers, including access to a new monthly special enrollment period.
- Increase the user fees for federally-facilitated exchanges and state-based exchanges that use the federal platform for the 2022 plan year, resulting in a projected increase of about $200 million in fees collected for 2022. The proposed rule acknowledges that this could increase premium costs for consumers.
- Remove the Exchange Direct Enrollment option that allows states to eliminate the use of the single, centralized exchange “HealthCare.gov” and replace it with a decentralized enrollment system via private sector entities (such as insurers, web-brokers, and agents and brokers).
- Reinterpret section 1332 of the ACA, which allows states (with federal approval) to waive certain ACA requirements if certain statutory procedural and substantive “guardrails” are met. The proposed interpretation would move away from Trump-era guidance and interpretations and largely return to Obama-era guidance and interpretations that make it much more difficult for states to qualify for a waiver.
For those interested in weighing in on the proposed rule, public comments are due by Wednesday, July 28, 2021, and can be submitted at http://www.regulations.gov, searching for RIN 0938-AU60.