Abort Lobby

Health insurers are docile about the Stupak amendment. Here’s why.

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Karen Ignagni. Click image to expand.

Planned Parenthood is incensed that the House of Representatives accepted an 11th-hour amendment to its health reform bill sponsored by Rep. Bart Stupak, D-Mich, and embraced by the U.S. Conference of Bishops, that prohibits the sale, through a proposed new health insurance exchange for the previously uninsured, of virtually any private health insurance policy that covers abortions. The National Organization for Women is pretty angry, too. Even President Obama, after some initial circumspection, expressed annoyance (“This is a health care bill, not an abortion bill”), in spite of Democratic Sen. Ben Nelson’s threat to veto any Senate bill that lacks the Stupak language.

Know who isn’t miffed? America’s Health Insurance Plans, which represents the very companies whose marketing practices would be restricted by the Stupak amendment.

The prospect of greater government regulation of health insurance is not something that AHIP ordinarily tends to overlook. This particular prohibition is sufficiently offensive to Planned Parenthood and NOW, neither of which is in the insurance business, that both have declared themselves opposed to any health care bill that contains it. But AHIP, which never misses an opportunity to state its commitment to “supporting bipartisan reforms,” raised not a peep of protest. What gives?

One answer is that, unlike Planned Parenthood and NOW, the insurers, despite President Karen Ignani’s insistence that “reform needs to happen“—and despite the half-trillion dollars they stand to rake in from the bill through implementation of an “individual mandate” that would require nearly every American to purchase health insurance and through massive subsidies to help make those purchases possible—oppose, even without the Stupak amendment, not only the House-passed health reform bill but also the much more conservative version passed by the Senate finance committee. If the insurers opposed the health reform bill before the Stupak amendment came into the picture, the logic goes, then there is little reason to make a fuss about the ways Stupak makes it worse.

The trouble with this last assertion is that it assumes, wrongly, that lobby groups, when they oppose some piece of legislation, like to avoid the fine print. In fact, the opposite is true, as you can see by reading a six-page letter that AHIP’s Ignani sent House Speaker Nancy Pelosi. The letter is dated Nov. 5, one day before the Stupak amendment was added to the bill. The abortion issue was very much in play, but the word abortion appears nowhere on Ignani’s laundry list of objections. Nor is it mentioned in her shorter statement following the House bill’s passage on Nov. 7.

Another possibility is that insurance companies don’t really like covering abortion procedures. If that were true, we would expect to find that insurers seldom covered abortions. But in fact, 46 percent of all recipients of employer-based coverage receive coverage for abortions, including 48 percent in HMOs and 44 percent in PPOs, according to a 2003 study by the Kaiser Family Foundation.

Abortion coverage is a good business for insurers. An abortion is a relatively inexpensive procedure, typically costing somewhere between $300 to $600 during the first trimester. Also, because of the lingering taboo associated with abortion, a relatively low proportion of abortions end up getting billed directly to private insurers—13 percent, according to the Alan Guttmacher Institute. Even granting that figure excludes insurance reimbursements for out-of-network providers, 13 percent is sufficiently low to suggest that women often prefer paying for an abortion out of pocket to incurring the risk, real or imagined, that their employers or others might find out about it through their insurer. That’s a bad deal for women, but it’s an excellent one for insurance companies. Why isn’t AHIP complaining that health care reform threatens this lucrative arrangement?

The reason can’t be found amid the intricacies of policy or financial self-interest, narrowly defined. Instead, we must look to politics.

For all their lofty rhetoric, the insurers don’t want to improve the health reform bill. They want to kill it. In the Oct. 22 Huffington Post, Sam Stein reported that Steve Champlin, a lobbyist for the Duberstein Group who represents AHIP, said at an AHIP conference: “There is absolutely no interest, no reason Republicans should ever vote for this thing. … When they vote for a health care reform bill, whatever it is [italics mine], they are giving comfort to the enemy who is down.” Unconditional opposition to health reform forges a vitally important alliance between insurers and the GOP that permits no breach over secondary issues like the Stupak amendment, which House Republicans had no choice but to support on the House floor. The Stupak amendment improved the bill’s chances of final passage, but as a general rule Republicans may not cast pro-abortion votes. Recognizing this, insurers held their tongues.

They still are. I left a message asking AHIP spokesman Robert Zirkelbach for his group’s position on the Stupak amendment. He did not call back.

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