SAN FRANCISCO (CN) — A rule that critics say imposes onerous restrictions on health insurance plans that cover abortion will likely be struck down, a federal judge signaled Thursday after finding the Trump administration lacks an adequate justification for the new requirements.
Led by California, a coalition of six states and the District of Columbia sued the U.S. Department of Health and Human Services in January over a new rule that forces insurers to bill policy holders at least $1 for abortion care in a separate invoice from the rest of their coverage.
Opponents say requiring two separate invoices will unnecessarily increase administrative costs for insurers, confuse consumers and could result in some people losing coverage due to missed payments.
The Trump administration says the rule is intended to make regulations consistent with a provision of the Affordable Care Act that requires insurers collect a separate payment for abortion coverage from their clients. Opponents say collecting separate payments does not require separate bills.
During a hearing on dueling motions for summary judgment Thursday, U.S. Magistrate Judge Laurel Beeler suggested that statutory interpretation is not a sufficient reason for imposing burdensome rules that could cost insurers an extra $1.6 million annually, according to the federal government’s own estimate.
“I don’t see any good reasons for it,” Beeler said.
Defending the new rule, U.S. Department of Justice lawyer Bradley Humphreys argued it was Congress, not Health and Human Services, that has demanded separate payments for abortion coverage.
“That’s what Congress wrote into the statute, and HHS is simply interpreting what it believes will better effectuate congressional intent,” he said.
The rule forbids insurers from terminating coverage if consumers fail to submit separate payments. It merely requires separate bills and, like the former rule enacted by the Obama administration, mandates that insurers administratively segregate payments for abortion coverage. That requirement was intended to ensure Affordable Care Act regulations comply with the Hyde Amendment, a 1976 law that bans using federal money to pay for abortions.
Before the rule was enacted on Dec. 27, 2019, Health and Human Services received 75,000 comments with an overwhelming majority opposing the rule. Most insurance providers argued the rule would substantially increase costs and require 12 to 18 months for insurers to change their billing structures. Blue Shield of California estimated it could increase costs by up to $7 million per year.
Countering those objections, Humphreys argued the agency is not required to conduct a cost-benefit analysis when it is changing a regulation to reflect the will of Congress.
“If the agency determines Congress willed one thing, it is not free to disregard that because of its own policy preferences or comments issued by commenters opposing the rule,” Humphreys said.
Arguing against the rule, California Deputy Attorney General Brenda Ayon Verduzco compared the billing scheme with California’s bottle recycling program, which tacks an extra five-to-ten-cent deposit fee on the price of soda bottles. She noted that consumers don’t receive separate bills when purchasing the beverage, even though the payment must be separated.
“The consumer only gets one bill at the register. They make one payment,” she said.
Ayon Verduzco noted that for transactions like this, businesses are considered the more sophisticated party with an ability to separate funds and send them to the appropriate state accounts.
She further argued that the rule runs counter to the purpose of the Affordable Care Act, which was intended to make health care more affordable. Piling extra billing costs on insurers makes health care less affordable, she insisted.
Ayon Verduzco also attacked the department’s decision to grant only a two-month extension to a mid-June compliance deadline after insurers presented a mountain of evidence on hardships they faced in complying with the rule, especially while dealing with the Covid-19 pandemic. She said the agency’s unwillingness to extend the deadline demonstrates its failure to adequate consider the burdens placed on insurers.
Beeler agreed that refusing to extend the deadline beyond 60 days was a poor policy decision, but she acknowledged that judgment is outside her purview as an interpreter of law.
“Even if you are 100% right on your statutory analysis, it’s not the right optic given the data presented to the agency,” Beeler said of the refusal to give insurers more time to comply.
Beeler said she already started drafting an opinion, but does not expect the ruling to be issued for at least three weeks.
Attorneys general from Colorado, the District of Columbia, Maine, Maryland, New York, Oregon, and Vermont joined California as plaintiffs in the lawsuit.