The Obama Administration has proposed changes in the ACA regulations mandating first-dollar coverage for contraceptives, abortifacients, and sterilization.
We have posted seven times on this regulatory issue over the past two years. First a brief recap, then analysis of the proposed rule. (Skip to go to the analysis.)
In August 2011, the Department of Health and Human Services proposed a revised interim final rule defining certain medical services as “preventive services” and specifying which employers would be entitled to utilize a religious objection exemption. The first interim final rule was issued on July 19, 2010. We explained the controversy here:
In the ACA, Congress directed that certain highly charged policy choices be made by career government employees as if they were technical, scientific issues containing no moral content — what we call the scientization of policy. Scientization is popular among both government scientists (they get to set policy based on their personal views) and agency officials (they get to avoid taking responsibility for policy decisions by saying they are just following scientific recommendations). Congress also allowed the Department of Health and Human Services (HHS) to issue these rules in interim final form — that is, without prior publication of a proposed rule. This procedure tends to exacerbate controversy by short-circuiting normal public notice and comment.
The rule includes two provisions that seem assured of being highly controversial. First, it implicitly defines pregnancy as a disease for which the ACA’s “preventive services” mandate applies. Second, it includes a very limited exemption for employers who object to providing these services on moral or religious grounds. This exemption was not included in the 2010 interim final rule.
We elaborated further on this attempt to scientize policy in a subsequent post, predicting that it would be highly controversial for more than the usual reasons — in particular, HHS was attempting to convert what is indisputably a policy choice into a matter of technocratic science:
The decision to deem contraception, sterilization, and abortifacient drugs as forms of “preventive care” surely will be controversial for the usual moral and religious reasons. They also will be controversial because they may compel some people to pay for services they find morally repugnant. The First Amendment is supposed to protect individuals from such governmental compulsions.
But the regulation also will be controversial because the scientific premise is so strained. Although it is undoubtedly true that all pregnancies are not intended or desired, pregnancy still would become a unique “disease” — one that most of its “victims” seek to acquire. We are not aware of any scientific precedent for defining an objective, observable medical state as a “disease” for some people and not everyone.
Even more controversial was the implication, whether intended or not, that abortion also could be deemed a “preventive service”:
[A]s a logical matter, if it is assumed that pregnancy is a “disease,” then it is entirely logical to infer that contraception and sterilization qualify as ways to prevent it. The same inference cannot be made with respect to abortifacient drugs, however. They do not prevent pregnancy; they terminate it. That is, they are a form of abortion, and by deeming one form of abortion “preventive care,” there is no logical way to exclude all other forms of abortion the same way. And that would be extraordinarily controversial.
As predicted, the interim final rule did generate controversy, with the U.S. Conference of Catholic Bishops making clear that in their view the rule should be withdrawn in toto. There was no room for compromise, and lawsuits challenging the rule were subsequently filed to ensure that every federal circuit court would be compelled to address the matter prior to Supreme Court review.
We then noticed that HHS said it had a scientific basis for its rule — a report issued by the Institute of Medicine just two weeks before the 2011 interim final rule — which seemed highly peculiar:
This timing is extraordinary. It is simply not possible for the government to act that quickly in response to an independent report, especially one that includes controversial content. Moreover, the National Academies takes pride on being independent of all interests, including the government. In this case, however, there are only two possible explanations:
- The IOM committee established and maintained a close working relationship with its client, HHS, thus making it possible for HHS to quickly incorporate the IOM’s recommendations into regulation without careful review; or
- Members of the IOM committee were selected to ensure that the committee’s “scientific review” would be consistent with the policy HHS officials wanted to issue.
Either way, the IOM cannot be reasonably construed as having conducted an independent review. For timing reasons alone, it’s clear that the IOM’s recommendations are transparently political. The IOM is now highly vulnerable to the charge that acted in concert with HHS.
[E]arly in the report it becomes clear that the committee wanted to deem abortion a “preventive service”:
[D]espite the potential health and well-being benefits to some women, abortion services were considered to be outside of the project’s scope, given the restrictions contained in the ACA (p. 22).
That’s an early hint of the IOM committee’s unwritten charge — to provide a scientized justification for promulgating by regulation the policy views of senior HHS (or White House) officials.
The IOM committee committed scientization from the outset, in the way it defined “preventive services”:
The committee defined (p. 20) preventive services for women as “services that prevent conditions harmful to women’s health and well-being.” The committee further defined the term conditions to include “diseases, disabilities, injuries, behaviors, and functional states that have direct implications for women’s health and well-being.” The committee explicitly included “unintended pregnancy” as a condition. That made it inevitable that the committee would define contraception and sterilization as “preventive services.”
The implications of the IOM committee’s foray into policy were substantial:
[T]here is no practical boundary on the scope of the committee’s claim to implicit regulatory authority. So, while the committee explicitly defined unintended pregnancy as a preventable condition, there is no logical basis in its definition for excluding intended pregnancy if, in the committee’s judgment, it would be, could be, or might be “harmful to women’s health and well-being.”
It is interesting to consider what else lies within the scope of the IOM committee’s definition of “conditions” to be prevented. Notice, for example, that the committee included any “behavior” that results in a “condition” to be within the scope of the committee’s claim of implicit regulatory authority. Moreover, anyone’s behavior could be included — the behavior of women themselves, but also the behavior of men and children.
At the back of the IOM report, one member of the committee presented a vigorous critique of both the process and the outcome:
The view of this dissent is that the committee process for evaluation of the evidence lacked transparency and was largely subject to the preferences of the committee’s composition. Troublingly, the process tended to result in a mix of objective and subjective determinations filtered through a lens of advocacy. An abiding principle in the evaluation of the evidence and the recommendations put forth as a consequence should be transparency and strict objectivity, but the committee failed to demonstrate these principles in the Report. This dissent views the evidence evaluation process as a fatal flaw of the Report particularly in light of the importance of the recommendations for public policy and the number of individuals, both men and women, that will be affected.
On the regulatory front, this is where matters stood until this week. On the legal front, Ethan Bronner of the New York Times recently reminded readers that implementation of the regulation is caught up in extensive litigation:
In recent months, federal courts have seen dozens of lawsuits brought not only by religious institutions like Catholic dioceses but also by private employers ranging from a pizza mogul to produce transporters who say the government is forcing them to violate core tenets of their faith. Some have been turned away by judges convinced that access to contraception is a vital health need and a compelling state interest. Others have been told that their beliefs appear to outweigh any state interest and that they may hold off complying with the law until their cases have been judged. New suits are filed nearly weekly.
As applied by the Health and Human Services Department, the law offers an exemption for “religious employers,” meaning those who meet a four-part test: that their purpose is to inculcate religious values, that they primarily employ and serve people who share their religious tenets, and that they are nonprofit groups under federal tax law.
But many institutions, including religious schools and colleges, do not meet those criteria because they employ and teach members of other religions and have a broader purpose than inculcating religious values.
The proposed rule would establish a new term of art, the “eligible organization,” which would be exempted from the requirement to provide insurance that covers contraception, sterilization, and abortifacients. “Eligible organization” are those meeting certain specified conditions. The key threshold limitations are it is limited to nonprofit entities, and to qualify a nonprofit entity must “holds itself out as a religious organization.” Thus, for-profit entities are never eligible and to be eligible a nonprofit entity must certify that it is religious.
This is not the end of the matter. The eligible organization must notify its insurer that it is availing itself of this exemption and list the contraceptive services it is declining to cover. The insurer must provide first-dollar coverage for these services through a separate health insurance policy, and the insurer is forbidden to charge any premium.
Finally, there appears to be nothing in the proposed rule that would address eligible organizations that self-insure. As a practical matter, they would be eligible organizations that are ineligible for the exemption.
The economics of this arrangement are straightforward. For eligible organizations that self-insure, the proposed rule appears to have no effect. For those that purchase insurance, whether they would pay higher premiums depends on the cost of the supplementary insurance policy and, if the cost is greater than zero, whether insurers are willing to absorb the cost as a reduced profit.
§ 2590.715-2713A Accommodations in connection with coverage of preventive health services.
(a) Eligible organizations. An eligible organization is an organization that satisfies all of the following requirements:
(1) The organization opposes providing coverage for some or all of any contraceptive services required to be covered under § 2590.715-713(a)(1)(iv) on account of religious objections.
(2) The organization is organized and operates as a nonprofit entity.
(3) The organization holds itself out as a religious organization.
(4) The organization maintains in its records a self-certification, made in the manner and form specified by the Secretary of Health and Human Services, for each plan year to which the accommodation is to apply, executed by a person authorized to make the certification on behalf of the organization, indicating that the organization satisfies the criteria in paragraphs (a)(1) through (3) of this section, and, specifying those contraceptive services for which the organization will not establish, maintain, administer, or fund coverage, and makes such certification available for examination upon request.
(b) Contraceptive coverage – self-insured group health plan coverage. [Reserved.]
(c) Contraceptive coverage – insured group health plan coverage.
(1) A group health plan established or maintained by an eligible organization and that provides benefits through one or more issuers complies with any requirement under § 2590.715-2713(a)(1)(iv) to provide contraceptive coverage if the eligible organization or plan administrator furnishes each issuer that would otherwise provide coverage for any contraceptive services required to be covered under § 2590.715-2713(a)(1)(iv) with a copy of the self-certification described in paragraph (a)(4) of this section.
(2) A group health insurance issuer that receives a copy of the self-certification described in paragraph (a)(4) of this section with respect to a plan for which the issuer would otherwise provide coverage for any contraceptive services required to be covered under § 2590.715- 2713(a)(1)(iv) must automatically provide health insurance coverage for any contraceptive services required to be covered by § 2590.715-2713(a)(1)(iv) and identified in the self- certification, through a separate health insurance policy that is excepted under 45 CFR 148.220(b)(7), for each plan participant and beneficiary. The issuer providing the individual market excepted benefits policy may not impose any cost sharing requirement (such as a copayment, coinsurance, or a deductible) with respect to coverage of those services, or impose any premium, fee, or other charge, or portion thereof, directly or indirectly, on the eligible organization, its group health plan, or plan participants or beneficiaries with respect to coverage of those services.
(d) Notice of availability of contraceptive coverage. An issuer providing contraceptive coverage arranged pursuant to paragraph (b) or (c) of this section must provide to plan participants and beneficiaries written notice of the availability of the contraceptive coverage, separate from but contemporaneous with (to the extent possible) application materials distributed in connection with enrollment (or re-enrollment) in group coverage of the eligible organization for any plan year to which this paragraph applies. The following model language, or substantially similar language, may be used to satisfy the notice requirement of this paragraph: “The organization that establishes and maintains, or arranges, your health coverage has certified that your group health plan qualifies for an accommodation with respect to the federal requirement to cover all Food and Drug Administration-approved contraceptive services for women, as prescribed by a health care provider, without cost sharing. This means that your health coverage will not cover the following contraceptive services: [contraceptive services specified in self-certification]. Instead, these contraceptive services will be covered through a separate individual health insurance policy, which is not administered or funded by, or connected in any way to, your health coverage. You and any covered dependents will be enrolled in this separate individual health insurance policy at no additional cost to you. If you have any questions about this notice, contact [contact information for health insurance issuer].”