Feds Disallow Calif. $200 Million in Medicaid Funds Over Abortion Insurance Coverage Mandate

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WASHINGTON — The Department of Health and Human Services (HHS) has announced that the Centers for Medicare and Medicaid Services (CMS) will withhold $200 million in Medicaid funds from the State of California in the upcoming quarter due to its unlawful mandate that all insurance plans cover elective abortions.

“California’s mandate violates a federal anti-discrimination law known as the Weldon Amendment, which protects entities from being forced to provide, pay for, or provide coverage for abortions,” the department said in a statement on Wednesday.

“As a result of California’s mandate, health plan issuers were compelled to remove coverage exclusions and limitations regarding abortion coverage, which forced employer groups associated with over 28,000 individuals out of plans that until that time had chosen to not cover elective abortions.”

As previously reported, the California Department of Managed Health Care (DMHC) issued a letter in August 2014 requiring all insurance companies in the state to cover abortions, seemingly leaving no way for religious organizations — including churches and Christian schools — to opt out or choose an alternative plan.

“Abortion is a basic health care service,” Director Michelle Rouillard wrote to the seven insurance companies that refused to offer coverage. “All health plans must treat maternity services and legal abortion neutrally.”

She asserted that abortion must be covered because the “California Constitution prohibits health plans from discriminating against women who choose to terminate a pregnancy,” and also cited a 1975 law surrounding “medically necessary” health care.

The directive is believed to be a result of a decision made in 2014 by two Roman Catholic/Jesuit universities in the state — Santa Clara University and Loyola Marymount University — to no longer pay for abortions but that employees could buy coverage through a third party. Some faculty members objected to the announcement and called upon then-Gov. Jerry Brown to intervene.

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The Life Legal Defense Foundation (LLDF) and Alliance Defending Freedom (ADF) soon filed a complaint with HHS after the DMHC refused to change its decision following written correspondence between the groups.

They then filed a second complaint with the federal government on behalf of seven churches, one of which operates a Christian school, to again assert that the mandate violates the rights of faith-based employers.

Following receipt of the complaints, which include argument on behalf of Skyline Wesleyan Church in La Mesa and the Roman Catholic charity Missionary Guadalupanas of the Holy Spirit, the HHS Office of Civil Rights conducted an investigation.

It announced in January that it “determined that California violated the Weldon Amendment by mandating that California health care plan issuers cover elective abortion in each plan product, and continues to violate federal law by continuing to require objecting health care entities protected by the Weldon Amendment to cover elective abortion.”

The amendment, found in the Consolidated Appropriations Act of 2009, states that funds may not be disbursed to “a federal agency or program, or to a state or local government, if such agency, program, or government subjects any institutional or individual health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions.”

HHS therefore sent a Notice of Violation to state officials, but California has refused to back down. The department consequently forwarded the matter to the Centers for Medicare and Medicaid Services (CMS).

“CMS will take enforcement action against California by disallowing $200,000,000 in Medicaid Federal Financial Participation (FFP) funds each fiscal year quarter, beginning January 2021, and totaling $800,000,000 annually, until California comes into compliance with the Weldon Amendment,” HHS outlined in a statement on Wednesday.

It said that the withholding of the funds is the “most appropriate mechanism to enforce the Weldon Amendment against California and induce compliance, consistent with Supreme Court precedents concerning Congress’s authority to impose reasonable conditions on states that accept federal funds.”

The religious liberties group Alliance Defending Freedom (ADF), which also filed and succeeded in its lawsuit Skyline Wesleyan Church v. California Department of Managed Health Care, applauded the HHS move.

“Churches should be free to operate according to their faith without being threatened by the government,” legal counsel Elissa Graves said in a statement.

“For years, California’s Department of Managed Health Care, in collaboration with Planned Parenthood, has demonstrated hostility toward churches by forcing them to fund elective abortion coverage, against the deeply held beliefs of churches and their members,” she outlined. “We applaud the Trump administration and HHS’s Office for Civil Rights for investigating and taking this corrective action against the state of California for its flawed policies, persistent violation of federal law, and its willful disregard for the civil rights and conscience rights of its citizens.”

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