In a potential violation of the state constitution and several state statutes, the longstanding right in California to insurance coverage for abortions and other family planning services including some forms of contraception was dramatically cut back by a secret administrative action that took place while Governor Schwarzenegger was in office, internal state agency documents show.
The State’s Department of Managed Health Care (DMHC) approved the cut back in coverage for abortions and other services, the documents show, at the request of a “large religious organization,” which several sources now say was Loyola Marymount University, based in Los Angeles. While the request was made on behalf of a religiously affiliated entity, no precise definition of what constitutes a “religious organization” or “religious group” was provided nor was the basis of the term “affiliated” defined.
There is no indication by the DMHC that the special exemption is limited to entities with a religious affiliation, instead the documents indicate that an insurer can cut back coverage because it is not obligated under the state’s Health and Safety Code to provide “all” family planning services but only “any” family planning services. This finding appears to shift the choice of whether to terminate a pregnancy or use contraception from the patient to the insurer and employer. Thus, the new rule opens the door to the cut back or elimination of insurance coverage for abortion, contraception and other family planning services at any California workplace.
The DMHC approved the insurance cut back secretly in 2008, while Arnold Schwarzenegger was Governor, but the decision only came to light recently when Anthem Blue Cross, one of California’s major insurance providers, agreed to implement the cut back at Loyola Marymount University (LMU) in southern California. In the wake of the Anthem decision at LMU, several other religiously affiliated entities, including Santa Clara University and St. Mary’s College, announced an intent to follow the LMU example.
Because abortion, like other health care services, is cost sensitive, the denial of insurance coverage has a significant impact on the ability of a woman to choose freely whether or not to terminate a pregnancy. Research indicates that a genuine freedom to choose whether or not to terminate a pregnancy provides a wide range of social and health benefits to women and their families, as well as to society at large.
California’s constitution guarantees a woman’s right to privacy which has long been interpreted to include the right to choose to terminate a pregnancy. California’s Health and Safety Code obligates insurance companies that offer HMO plans to cover health care that is medically necessary. Both medical abortions (including the use of the drug RU-486) and surgical abortions have long been accepted in California as medically necessary to terminate a pregnancy.
A review of DMHC’s records indicates that insurance companies never deny coverage to abortions as, by definition, an abortion is “medically necessary” to terminate a pregnancy. Once a woman exercises her constitutional and statutory right to choose the Knox-Keene Act, a 1975 amendment to California’s Health and Safety Code, obligates an HMO to provide insurance coverage for any medically necessary procedure or service, including the use of RU-486 or a surgical abortion, that safely terminates the pregnancy.
California’s Administrative Procedures Act also requires state agencies such as the DMHC to follow a rigorous and publicly transparent process when it implements rule changes such as the one required to approve the insurance cut backs. In this instance, however, the records provided indicated Anthem made the requested change to the General Counsel’s office of the DMHC. No notice or opportunity to be heard was provided to the public. It is not clear why Anthem delayed implementation of the change, approved in 2008, until now. There is some indication that the change was delayed while the debate about changes in federal health care were worked out.
Finally, the California Reproductive Freedom Act forbids a state agency like the DMHC from “interfering” with a woman’s right to choose to terminate a pregnancy. The DMHC licenses insurers like Anthem to sell HMO insurance plans, thus providing a significant benefit. By carving out undefined “religious groups” such as LMU, the DMHC is likely trespassing on that statutory obligation.
The documents, obtained from California’s Department of Managed Health Care (DMHC) through a public records act request, indicate that Anthem originally requested approval from the DMHC to terminate coverage of a wide range of family planning services including abortion, sterilization and certain forms of contraception, including the intrauterine device (IUD). The DMHC objected only to the request to terminate coverage of the IUD, but gave the green light for the other cutbacks.
In one document provided by Anthem to the DMHC in the summer of 2013 it states:
“Per agreement with the Department, only for religious groups, the text of the provisions dealing with pregnancy, maternity care, infertility and birth control may be limited to a minimum number of a “variety of family planning services,” and some may be excluded. The following exclusion will only be included for religious groups and will be omitted for non-religious groups (See Filing No. 20081015 closed out July 8, 2008.)
“Family Planning. No services are provided under this plan for: diagnosis and testing for infertility: sterilization of females or males; shots or implants for birth control; diaphragms; doctor’s services to prescribe and fit a diaphragms; or for voluntary abortion, except when medically necessary. As indicated under “What’s covered,” “Birth Control,” family planning (counseling and consultation) is covered.”
The final version of LMU’s “Evidence of Coverage,” which must be provided by the insurance company to all plan members, is not yet available so it is not clear if their new plan will track this language. However, Anthem is now free to offer this kind of cut back to any “religious group,” however that term is understood.
The announcement at LMU caused a firestorm on its campus as staff and faculty objected to the changes. Similar reactions were heard at Santa Clara University. On both campuses faculty objected to the changes as a violation of established norms of “shared governance,” a longstanding principle that faculty must be formally engaged in major decisions about an academic institution. However, the Boards of Trustees at both campuses reaffirmed the decision to cut back insurance coverage arguing the institutions’ religious values trumped the rights of faculty in this instance.
While public attention to the universities’ decision has focused on the affiliation of the two schools with the Catholic church, the designation “religious group,” used by Anthem and approved by the DMHC, has no formal basis in current California law. There is an exemption available for a religious entity that meets a strict four part test. Thus, a religious order or seminary can obtain certain favorable exemptions from some aspects of the state’s Constitution or statutes. However, it is widely agreed that neither university fits that definition.
Thus, the new rule change by the DMHC either creates, without any legislative or judicial process, a new broader legal classification that would presumably include any employer loosely affiliated with a religious faith or the DMHC has, perhaps unintentionally, opened the door to allowing any employer expressing certain moral or religious beliefs to claim the same ability to eliminate coverage of abortion and other family planning services from the HMO’s. It appears that any employer who can claim to fit the undefined designation “religious group” would qualify for the new DMHC approved exemption.
This kind of argument is now being raised in litigation in other parts of the country in reaction to the Affordable Care Act, or “Obamacare” as it is widely known. Private corporations that clearly do not meet the existing four part test for a “religious exemption” have claimed that their insurance companies should nonetheless be exempted from the ACA’s requirement that they provide contraception coverage free of charge because the owners of the business object to contraception on religious grounds. Because there is no grounding of the California rule change in the formal definition of a “religious entity,” the change could be read as opening the door to similar arguments in California, long seen as a bastion of a woman’s right to choose.