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How do health insurance plans cover abortion?

How do health insurance plans cover abortion?

Q: How do health insurance plans cover abortion?

A: Coverage for abortion on health insurance plans depends on several factors, including:

  • The type of coverage (eg. public or private, self-insured or fully-insured)
  • The state where the person lives. (Some states ban abortion coverage on all state-regulated plans; some states require abortion coverage on at least some plans.)
  • Whether the restrictions of the Hyde Amendment are applicable to the abortion. (The Hyde Amendment is federal legislation that blocks federal funds from being used to pay for abortion unless the pregnancy resulted from rape or incest, or the abortion is necessary to save the mother’s life. Multiple states’ laws restricting abortion coverage – including coverage under Medicaid – track the Hyde Amendment and bar coverage of abortions in situations that don’t involve rape, incest, or danger to the mother’s life. Abortions for situations that don’t involve rape, incest, or saving the mother’s life are referred to as “non-Hyde” or “elective” abortions.)
  • How the person obtains their health coverage (eg. from an employer versus self-purchased)
  • The specific health plan that the person selects.

How does employer-sponsored health insurance cover abortion?

Whether and how employer-sponsored health plans cover abortion will vary from one employer’s plan to another. The availability of abortion coverage depends in part on where the business is located, whether the employer wants to offer abortion coverage, and whether the employer buys coverage from an insurance company or self-insures. If the health plan provides abortion coverage, the amount that a plan member will pay for an abortion will depend on the plan specifics, such as deductible and out-of-pocket costs.

In some states, all private health insurance plans that are regulated by the state (including fully insured employer-sponsored plans) are prohibited from covering non-Hyde abortions. But in most states, employers can choose to purchase a group health plan that includes abortion coverage. And in all states, an employer that self-insures can choose whether or not to include abortion coverage on their plan, as a federal law, the Employee Retirement Income Security Act (ERISA), exempts self-insured group health plans from state insurance regulations.

(But it’s important to note that if a state has banned abortion altogether, employers need to be mindful of that when designing their overall benefits package, to ensure that they don’t run afoul of state laws that aren’t specific to health insurance.)

Among employer-sponsored plans that cover abortion, the specific benefits will vary from one plan to another. Some employer-sponsored plans will cover abortion with very few out-of-pocket costs, whereas other plans might count abortion toward the plan’s deductible, and might have a deductible that’s well in excess of the average cost of an abortion. In that case, the enrollee would likely pay the full cost of the abortion themselves if they hadn’t yet met the deductible for other health care services earlier in the year (although the health plan’s network negotiated price would likely save them some money).

How do individual and family health plans cover abortion?

This also varies considerably from one state to another and from one health plan to another. Half of the states have banned non-Hyde abortion coverage for health plans sold in the exchange/marketplace, and some of those states even restrict coverage for abortions that result from rape or incest or would endanger the mother’s life.

But eight states require marketplace health plans to cover abortion, and some of those states require the plans to cover abortion without any out-of-pocket costs for enrollees. In the rest of the states, abortion coverage is offered at the discretion of each insurance company. (In some states, there are no plans available with abortion coverage, even though the state does not forbid such coverage.)

If non-Hyde abortion coverage is offered on a plan sold in the exchange, premium tax credits (subsidies) cannot be used to cover the cost of that coverage. So insurers that provide non-Hyde abortion coverage are required to collect at least $1/month from enrollees on these plans and keep it segregated from the rest of the premiums they collect, using only these proceeds to pay for abortion services.

This means that even if the health plan costs less than the person’s allowable premium subsidy and would otherwise be premium-free, the enrollee must pay at least $1/month for the coverage. States can choose to offset this with state funds (California is an example of a state that has done this).

In most states where abortion coverage is available on self-purchased health plans, the specific benefits will vary widely from one plan to another — just like coverage for all other types of medical care. One plan might have a low (or no) deductible and/or cover most of the cost of an abortion, while another plan might count the abortion toward a deductible that could be several thousand dollars, meaning that the patient would pay the full cost of the abortion (after the health plan’s network negotiated discount) if they hadn’t already met their deductible earlier in the year.

How does Medicaid cover abortions?

In most states, Medicaid only covers abortions in cases of rape, incest, or to save the mother’s life). But there are 16 states where the Medicaid program also covers non-Hyde abortions. In most cases, Medicaid in these states will cover abortion without any out-of-pocket costs.

Although most Medicaid costs are jointly covered by the state and federal government, the Hyde amendment prohibits the use of federal funds to pay for non-Hyde abortions. So those 16 states must use only state funds to pay for non-Hyde abortions for Medicaid enrollees.

Legislation (H.5006/S.32) is under consideration in Rhode Island in 2023 that would add abortion coverage to the state’s Medicaid program. But Montana’s Department of Public Health and Human Services is working to reduce Medicaid abortion coverage in the state. (Montana is currently one of the 16 states where state funds are used to cover non-Hyde abortions.)

Abortions that meet the Hyde Act’s exceptions account for a very small fraction of all abortions. In states where Medicaid programs only cover abortions in cases of life endangerment, rape, or incest, just 1.5% of abortions were covered by Medicaid as of 2014, versus 52% in states where state funds are used to provide comprehensive abortion coverage.

How does Medicare cover abortions?

Medicare is funded by the federal government, and states do not contribute to the funding. So non-Hyde abortions are not covered by Medicare in any state, since federal funds cannot be used to pay for non-Hyde abortions.

Most Medicare beneficiaries are 65 or older, and thus well past reproductive age. However, almost 8 million people – more than 12% of all Medicare beneficiaries nationwide – are under 65 and are enrolled in Medicare due to a long-term disability. But since non-Hyde abortions account for the vast majority of all abortions, Medicare beneficiaries generally do not have coverage for abortion.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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