Taxpayer dollars should not go to performing abortions or subsidizing insurance plans that pay for them. However, Obamacare and the Biden COVID Credits are not subject to the Hyde Amendment, the protection against abortion funding in other health programs. As a result, taxpayer funds subsidize insurance plans that cover elective abortions.
The Biden COVID Credits are temporary, pandemic-era subsidies that expanded the Affordable Care Act’s (ACA) premium tax credits (PTCs) by increasing the credit amount and removing the income cap for eligibility. While the COVID Credits are scheduled to expire at the end of 2025, an extension would increase enhanced taxpayer subsidies for abortions performed on Obamacare plans.
Fake Safeguards Do Not Prevent Taxpayer Funding of Abortion
The ACA created a system in which insurance plans are sold on exchanges and purchased with federal subsidies. These subsidies, called PTCs, are funded by taxpayers and paid directly from the Treasury to insurers on behalf of enrollees to reduce monthly premiums. The ACA does not prohibit subsidies for plans that include elective abortion coverage, so PTCs flow to plans offering elective abortions.
Obamacare included two fig leaves that some claim limit taxpayer exposure to abortion coverage. In practice, neither has been enforced.
Multi State Plans
Insurers can contract with the federal government to offer multi-state plans on state marketplaces (also known as “the exchanges”). Multi-state plans are required to offer at least one plan in each state that does not include elective abortion coverage. All other plans can include abortion coverage. This provision was designed to ensure that consumers who object to abortion coverage would have a genuine alternative available for purchase with federal subsidies.
Yet, a Government Accountability Office review indicated this requirement has not consistently been met. In states that have not enacted their own bans on abortion coverage in Obamacare exchange plans, even the minimum requirement of offering one plan without abortion coverage is often not satisfied. As of 2022, 24 states and DC offer elective abortion coverage through the Obamacare exchanges. Of these, nine of them exclusively offered plans covering elective abortion with no alternative.
Effectively, unless the state addresses the issue, federal taxpayers currently do not have a choice in whether or not subsidized plans include abortion procedures.
Section 1303 and the Separate Payments Rule
Under Section 1303 of the ACA, any exchange plan that covers elective abortions must keep abortion-related funds separate from federal subsidies. Insurers are supposed to collect two payments from the enrollee: one for primary benefits and a separate payment of at least $1 per month for elective abortion coverage. The funds are supposed to remain in separate accounts so that PTCs do not support abortion services.
This separation has broken down. Insurers have often combined billing for abortion and non-abortion portions of coverage. Federal guidance under the Obama and Biden Administrations allowed insurers to include the abortion surcharge within the overall premium rather than billing it separately. Enrollees typically receive a single bill, and insurers submit a single claim for federal subsidies. The result is that federal funds directly subsidize plans that include abortion coverage and expand enrollment in those plans.
Some states are starting to set up and fill the coffers of their own abortion funds using the abortion premiums when they are collected. For example, Maryland enacted a law allowing the state to disburse these funds to abortion initiatives that pay for related procedures and travel, including for women who are not enrolled in exchange coverage at all. In effect, premium dollars associated with abortion coverage flow beyond the exchange population.
COVID Credits Expand Taxpayer Funding of Abortion
The Biden COVID Credits have resulted in a dramatic increase in the number of subsidized enrollees and in the overall amount of federal dollars flowing to insurance companies offering Obamacare plans. Since abortion-inclusive plans remain eligible for subsidies, this expansion means that many more taxpayer dollars are now supporting plans that cover elective abortions.
Obamacare created a pathway for subsidizing abortion coverage with federal dollars. The failure to enforce the separate payments rule, the breakdown of the multi-state plan requirement, minimal oversight of the insurers offering abortion-covering plans and states mandating them, and the expansion of subsidies under the Biden COVID Credits have combined to generate taxpayer-funded elective abortions.
To prevent taxpayer subsidies for abortion under Obamacare and the Biden COVID Credits, safeguards such as those included in the No Taxpayer Funding for Abortion and Abortion Insurance Full Disclosure Act of 2025 (H.R. 7 and S. 186) sponsored by Rep. Chris Smith (R-NJ-04) and Sen. Roger Wicker (R-MS) are required.
At a minimum, Congress should ensure the Biden COVID Credits expire on schedule in December 2025 to honor their commitment to protect life and respect taxpayers.
