How Insurers and Employers Are Responding to Abortion Coverage Since the Overturn Of Roe V. Wade

KEY TAKEAWAYS:

• Insurers and employers expect no impact on premiums, at least for the short term‑but self-administered abortions could cause complications that lead to more emergency room visits
• Employers primarily do not want to alienate their workforce, and many, where it is legal, want to make abortion services available and accessible
• Insurers and brokers want data to inform new policies, coverage, and network adequacy

The reversal of Roe v. Wade resulted in a number of swift and drastic changes across American society. Caught in the middle of the political changes: Employers and insurers, who had to swiftly adapt to the changing environment.

In the evolving landscape, Ipsos Healthcare Advisory spoke with a collection of insurers and brokers to gain their perspectives on the challenges insurers and employers are facing and the information they seek while trying to move forward strategically in designing benefits coverage.

The majority of abortion patients have been self-paying since the Hyde Amendment was passed in 1976, which restricts the use of federal funds to pay for abortions, and it would appear as though this trend will continue. Insurance coverage has been declining since 2017, with a reduction of insurance acceptance among abortion service providers. Three main influencing factors include: Medicaid coverage, state bans on private coverage, as well as the rise of medication abortion-only telehealth clinics, which often do not accept insurance.

1. How out-of-state abortions are usually paid for

Prior to the reversal of Roe v. Wade, most companies, aside from companies with religious affiliations or religious-leaning entities, had a standard abortion plan that more typically included or incentivized in-network coverage. Any copay or deductible requirement tended to differ across plans. Out-of-state abortions comprised approximately 9% of all abortions performed in clinical settings in 2020. Insurers typically administered the related paperwork for fully insured employers, and third-party administrators would for self-funded health plans. Insurers and third-party administrators would advise members on their benefits and provider options and advise providers on member eligibility and out-of-network provider contact details. These organizations would also assist with prior authorization submissions, processing payments, and reimbursing patient travel claims.

2. Today, there are many considerations and expected changes with several opportunities for the right player

Healthcare premiums

One consideration is the impact of the repeal of abortion rights on insurance premiums. Generally, insurers and employers expect no impact on premiums, at least for the short term. Several factors were mentioned as potential contributors to higher healthcare spending including women trying to provide abortion services on themselves resulting in emergent complications and additional emergency room visits; an increase in higher risk-pregnancies; and more babies with health complications, including lower birth weight. However, others believe these concerns only apply to the Medicaid population, who are more likely to go to the ER, while commercial members are more hesitant to visit the ER due to higher cost-sharing.

Business stability: Meeting employer/employee needs

Aside from religiously inclined organizations (who are taking a firm stance against abortions), insurers and employers typically prefer to maintain the status quo with regard to their approach to abortion. How to do this is the question of the day. Insurers do not want to alienate themselves from employers, while also wanting to be inclusive of members’ medical needs. Larger insurers are looking to the U.S. Centers for Medicare & Medicaid Services and other regulatory bodies for guidance and are paving the way for smaller insurance health plans to follow suit. Employers primarily do not want to alienate their workforce, and many, where it is legal, want to make abortion services available and accessible. Interestingly, insurers and employers value closer proximity to the site of care more than legal protections for providers and consumers, due to lower costs associated with shorter journeys. However, when asked if employers are considering relocation due to the new change, the majority are not discussing this as an option. Some sensitivities raised include:

• Comfort level of employees seeking reimbursement and potential concern about talking to human resources
• Discrimination from a travel-related ceiling (e.g., for those further away and also for people who want an out-of-state trip for reasons not medically related)
• The potential for unexplained absences to prompt discrimination among fellow colleagues who have differing views

Insurers see provider availability as more important to consumers than legal protection. Legal protections for providers performing the procedures and/or consumers receiving them vary between states, as does the number of providers available to meet demand. Some states, such as Illinois, will need to upstaff to meet demand. Conversely, employers in states that previously provided a substantial number of out-of-state abortions and no longer can, such as Georgia, will need to consider out-of-state options with associated travel costs. Interstate provider relationships will also impact out-of-state site care. Patients are expected to prefer to seek care in a state with strong legal protections; however, if they are unable to be seen in time due to high demand, they may be willing to take the risk of an alternative state to obtain the care. Virtual medicine is a popular option, which is also banned in eight states, forcing some people to travel interstate or set up a post office box out-of-state for a month to legitimately have an address where abortion is legal.

Legal complexity and benefit design

For reasons mentioned, as well as legal complexity, health insurers and employers are taking a wait-and-see approach to abortion coverage benefit design. Legal considerations are still being deliberated by both insurers and employers. Risk profiles vary as they seek to move forward legally and strategically. The ramification of processing claims from a banned state remains unknown. Some third-party administrators are refusing to administer these claims altogether due to legal complexity, while one insurer stated they have “been approved” in six to seven states and are already processing claims for fully insured companies. Both insurers and brokers see employers as assuming the biggest legal risk. Fully insured companies are regulated by state law and so are bound by state abortion rulings. Self-insured companies are regulated by the federal government under the Employee Retirement Income Security Act of 1974 (ERISA), which allows them to make their own decisions on abortion coverage but limits medical reimbursement for related travel and accommodation.

Self-insured companies are also typically larger and have more resources for litigation if needed. Opinions are mixed regarding the degree of seriousness of the Texas law (SB 8) that allows civil action to be taken against those who aid and abet Texans to receive abortions. Even though the Health Insurance Portability and Accountability Act of 1996 (HIPAA) protects the confidentiality of employee health information, people are concerned that employee identity may be revealed during legal proceedings. Factors expected to influence healthcare providers include concerns about being sued or going to jail due to the Texas law and others like it, their own state’s protective laws, malpractice principles, workplace mandates, and plan designs. With all the legal complexity, provider specialization seems likely.

A minority of employers plan to provide 100% coverage for out-of-state abortions. According to a broker, about seven in ten employers are looking to include abortion benefits within the framework of the existing benefit plan, where related travel and accommodation would be considered a part of the deductible. Most abortion services are not expected to include concierge services/benefits provided through a third party. Payment for abortions will likely require that patients pay upfront and submit a claim for reimbursement. Coverage limitations will include sites of care determined by outcomes; provider network adequacy and waitlists; state regulations; pregnancy circumstances such incest, rape, or risk to the mother; estimated number of procedures per year; and a maximum yearly dollar amount of approximately $2,500 to $5,000 depending on travel requirements.

3. Information required to be strategic, and from whom

“Today it’s a gut reaction. It’s not a strategy.”

—INSURER

Insurers, brokers, and employers are working to determine how their plans can work now compared to how they operated previously. Health insurers and employers are primarily concerned with: (1) staying in regulatory compliance, (2) understanding what the workforce/member needs and desires, and (3) the best way to meet both of these demands from a business viewpoint. To achieve this, they need the following information:

• Regulations: Insurers, brokers, and, in some cases, employers are seeking legal counsel to understand the parameters of where abortions are legal, if and where there is risk to legal action against providers, and how the reimbursement process or benefit structure could comply with regulations. Employers sometimes seek this knowledge from their brokers, TPAs, member advocates, and compliance consultants.
• Workforce needs: Insurers and brokers are having conversations with employer plan sponsors about employee needs and what the employer wants to cover. Employers are surveying their workforce and also watching other employers to learn how to maintain status quo as much as possible.
• What makes business sense: Insurers and brokers want data to inform new policies, coverage, and network adequacy. This data includes utilization and cost on a state-by-state and managed care organization to managed care organization basis, provider and member feedback, and quality and health outcomes, such as whether there are sicker mothers and babies, or if genetic tests are a good idea—especially for high-risk mothers—to identify likely chronic conditions or genetic disorders, such as sickle cell disease, etc.

Meanwhile, in all the uncertainty, patients are also having to do their best to navigate their healthcare requirements. Health insurers expect that, once policies are updated, the utilization engagement will be more consistent.

“The data is gonna tell the story.”

—INSURER

HOW IPSOS HEALTHCARE ADVISORY CAN HELP YOU:

For employers: We can support strategy development for designing an approach to abortion coverage for your organization that considers various dependencies or requirements of each approach. We will put this in the context of how peer organizations are navigating this new and changing landscape, along with employee perspective, with a state-level analysis.

For insurers: We can develop a framework to identify and validate key characteristics of members and employers who need additional support navigating out-of-state abortion care for their workforce/themselves. This framework will be used to develop a strategy for designing suitable abortion coverage options for your members.