Taken from: http://www.politico.com/news/stories/1109/29561.html


Taxpayers currently provide deep subsidies for health insurance plans that cover abortion — a little-recognized fact responsible for much of the angst over an anti-abortion amendment attached to the House health care bill.

By its terms, the Stupak amendment, named for Rep. Bart Stupak (D-Mich.), would ban individuals from using new government subsidies to buy insurance plans that cover abortion, and it would prohibit a government-operated plan — the public option — from carrying abortion coverage.

Stupak and his allies, including every House Republican, a quarter of the chamber’s Democrats and the Vatican, say that it simply extends an existing prohibition on federal funding for abortion — an annually renewed policy called the Hyde amendment — to the health care exchange that would be established for the uninsured under the health care bill making its way through Congress.

But lawmakers who support abortion rights contend that, if the Stupak amendment’s logic is extended to the $250 billion in tax breaks Americans get to buy coverage through employer-based plans, it could strip abortion coverage from tens of millions of women who already have it.

Rep. Diana DeGette (D-Colo.), co-chairwoman of the Congressional Pro-Choice Caucus, said that the next step beyond Stupak for the anti-abortion movement will be to make sure that “if that federal wand has been waved over your insurance, then you don’t get to get abortion coverage.


Many Americans may not know that the money used for their employer-based health plans is untaxed, because it doesn’t show up on their paycheck and they don’t have to worry about it at tax time. But Congress’s bean-counting Joint Tax Committee calls the break “the largest tax subsidy” on the books and reports that it “represents by far the largest portion of total tax expenditures for health.”

This is how it works: The health benefits most Americans get at work are a form of income. But federal law excludes that income from taxation — and lets businesses write its cost off as an expense — providing an incentive to workers to buy health insurance and for employers to offer it as compensation.

For better or for worse, that tax-free foundation of the employer-based system props up the insurance industry. Without it, the government would be about a quarter of a trillion dollars richer each year — enough to pay for the House health care bill twice over the next decade.

More important for the abortion debate, Congress considers the income tax exclusion to be a massive “tax expenditure” — a subsidy — for individuals to buy insurance.

Taking the concept of a subsidy one degree further — from individual purchasers to corporate providers — insurance companies that offer plans that cover abortion get tens of billions of dollars of subsidies through programs like Medicare Advantage and the 2003 prescription drug law. While few, if any, seniors have need for abortion coverage, the big insurers who administer those plans also offer insurance policies that cover abortion to younger women and their husbands and fathers.

One more tick in the subsidy spectrum: Federal money — in the form of entitlement program benefits, competitively bid grants, earmarks and tax breaks for everything from nonprofit status to research incentives — goes to nearly every imaginable entity involved in abortion: hospitals, doctors, medical equipment companies — even Planned Parenthood, which funds other programs with its public money.

Naturally, there’s disagreement about which funding mechanisms constitute subsidies and how many hands a federal dollar must pass through before it’s kosher to spend it on abortion services.

Abortion foes say they’re only looking to clamp down on the proposed health insurance exchange, in which the government would subsidize health care for those who could not otherwise afford it.

They say those subsidies are more direct than other government support for health insurance — including the income-tax exclusion — and that prohibiting their use for the purchase of plans that cover abortion is consistent with the principles behind the Hyde amendment.

“In our view, what we have been seeking all along ... is to apply exactly the principles of the Hyde amendment to the proposed new federal programs created by the bill,” Douglas Johnson, legislative director for the National Right to Life Committee, told reporters in an e-mail last week.

If the Stupak ban is not in place, they argue, the new system will usher in an expansion of existing abortion rights.

“That’s why we’re drawing a line in the sand here,” said Charmaine Yoest, president and CEO of Americans United for Life.

The forces toeing that line include the Catholic Church: House Speaker Nancy Pelosi (D-Calif.), a Roman Catholic, had a whirlwind of back-to-back-to-back meetings with lawmakers who support abortion rights and representatives of the U.S. Conference of Catholic Bishops as she negotiated the tricky politics of allowing a vote for the Stupak amendment and winning along with it final passage of the health care bill, according to senior Democratic aides.

Abortion-rights backers say the limitations embodied in the Stupak amendment are stronger than the Hyde language.

Hyde applies relatively narrowly to prohibiting federal funding of abortion through the annual labor, health and education appropriations law. Since public health programs like Medicaid are funded through that law, they can’t proffer abortion services.

But the appropriations law doesn’t cover the tax side of the ledger and the lucrative income-tax exclusion.

Abortion-rights backers say Stupak’s amendment — co-authored by Rep. Joe Pitts (R-Pa.) — is just the first step in a campaign to make it harder for women to obtain abortions.

The combined data of a pair of studies conducted by the Guttmacher Institute and the Kaiser Family Foundation strongly suggest that most women who currently are covered by employer-based insurance plans have abortion coverage.

They would be in danger of losing abortion coverage if the Stupak principle is ever applied to the existing health care system, according to abortion-rights advocates.

“The next step after that will be to say that anybody who gets a plan purchased by an employer that gets tax relief can’t have abortion coverage,” DeGette said.

Sen. Tom Harkin (D-Iowa) sees the argument bleeding into federal subsidies in other policy arenas, according to the Iowa Independent.

“You can take this on down. You could just say that anybody that got a federal loan for housing could not get an abortion,” Harkin said. “You can take this and just keep going on and on and on with no end in sight.”

Going after subsidies outside the exchange “is a battle for another day,” Yoest said. “You’ve got to address the one that’s right in front of you.”