Way back, surveyors chiseled marks in stone structures to serve as a “bench” for a leveling rod, ensuring consistent measurement. Of course, consistent measurement is a key to good management and outcomes. Today, all sectors use (or should use) benchmarks as standards to measure or judge things.
In health care, the government, employers, and payers can impact the coverage of services. Arguably, abortion services make up the most contentious coverage battleground, and the diversity of coverage standards across states illustrates how politics, not economics, often explain access decisions.
Federal oversight
Prior to the Affordable Care Act (ACA), all states had individual coverage mandates, and some states also blocked coverage for certain services, including abortion benefits. These mandates typically applied to insurance coverage provided to individuals by employers or purchased directly from insurers.
Federalists saw the patchwork of coverage standards across states as an opportunity to establish a single national standard minimum standard of coverage in the individual and small group insurance markets, with the ACA as a vehicle for achieving this objective. Ten categories of essential health benefits (EHBs) emerged.
Despite the breadth of the 10 EHBs, the ACA explicitly prohibits states from requiring that plans sold through the health insurance exchanges — whether through Healthcare.gov or on their own state platforms — to cover abortion. The clause sets up a potential faceoff in states that mandate abortion coverage. For instance, in California, where Medi-Cal and private health insurance plans are required to cover all abortions, HHS has threatened to cut federal premium subsidies for plans sold through Covered California if they follow the state’s requirement.
That’s not to say that states can’t allow plans sold through the exchanges to offer coverage of abortion services. If permitted by the state, these plans may cover abortion services – they just cannot be required to do so. Further, they cannot use federal premium subsidies for abortions, the third rail (beyond those exempted by the Hyde Amendment, which allows federal funding of abortion services in cases of life endangerment, rape, or incest).
It did not take long for this federalist approach to erode. Two years after the ACA was enacted, authority to define EHBs, within federal guidelines, was transferred back to states. And starting in 2020, states were given new options for changing their standards.
Other federal programs limit states’ authority. In Medicaid, federal dollars may not be used to fund the cost of abortions (beyond those exempted by the Hyde Amendment). In other words, federal Medicaid funds cannot be used for so-called “elective” abortions, and states that allow or require such coverage have to fund those procedures themselves. State mandates do not impact Medicare, which in keeping with the Hyde Amendment, covers abortion services only in cases of life endangerment, rape, or incest. And self-insured plans are regulated under the federal Employee Retirement Income Security Act (ERISA). When the uninsured are included in the analysis, state mandates typically impact less than 30% of all lives.
States’ standards
States’ abortion coverage policies are diverse. Eleven states restrict coverage of abortion services in private insurance plans. Of them, all limit coverage to abortions from pregnancies that threaten the life of the pregnant woman, but only two others allow coverage in cases of rape and incest. Some states have no coverage restrictions for abortion services, and six require coverage.
Interestingly, states vary in how they word their abortion coverage policies. Some states say abortion is not covered but then go on to describe exceptions when coverage is permissible. Other states say abortion is covered but then describe exceptions. These stylistic differences tend to correlate with states being politically “red” or “blue.”
The costs and benefits of multiple standards
Having multiple standards is inefficient. For example, trains cannot switch between tracks with different gauges (the widths between rails). Like competing companies in many industries, many railroads voluntarily adopted common standards in pursuit of efficiency.
Multi-state payers incur additional administrative costs (e.g., monitoring, reporting) when complying with different standards. These payers also incur additional actuarial costs when pricing premiums for state-specific benefits and additional communication costs when developing state-specific materials for providers and members. And then there are the administrative costs associated with responding to members who are unsure if and under what circumstances an abortion is covered, likely exacerbated by multiple standards.
But access decisions are not always economically rational, nor should they necessarily be so. They can be in the public interest, based on science and evidence, and not cost. They also can be political. It is naïve to think all access decisions are explained by dollars or facts, and coverage of politically charged services like abortion are a case in point.
U.S. Supreme Court Justice Louis Brandeis once described how “a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” Through trial and error, a smaller set of abortion coverage standards may emerge from a marketplace of standards. The Constitution charges the nation to promote the general welfare. How this is achieved through access standards will continuously evolve as the nation works to form a more perfect union.
As is the case with access to abortion services, when thorny access decisions are made, states will have a bench at the table.
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