Trump rule requires insurers to send two separate invoices, causing unnecessary confusion that jeopardizes health coverage and drives up consumer costs
OLYMPIA — Attorney General Bob Ferguson today filed a lawsuit against the Trump Administration over its rule requiring health insurance companies to send consumers two separate bills for monthly insurance premiums: one for abortion coverage and another for all other coverage. This unlawful rule would affect more than 200,000 Washingtonians and cause many to inadvertently fail to pay their premiums in full, jeopardizing their health coverage.
This rule would cause unnecessary confusion for people who are likely to assume the second bill is a scam, an error or an optional fee that doesn’t apply to them. In fact, this second bill would be a part of the overall monthly premium for everyone enrolled in the plan, and a failure to pay it could result in a loss of insurance benefits.
The lawsuit, filed today in U.S. District Court for the Eastern District of Washington, asserts that the rule contradicts Washington law requiring insurers to send only one bill for monthly premiums. It also violates the Affordable Care Act (ACA), which does not allow federal agency rules to preempt state laws.
The rule goes into effect on June 27.
“This unlawful rule is yet another Trump Administration attempt to erode access to health care – particularly to women,” Ferguson said. “This is a transparent attack on reproductive care that jeopardizes coverage for hundreds of thousands of Washingtonians. We will continue to defend the right to unbiased, affordable health care.”
“This scheduled federal rule will cause unnecessary confusion for consumers and is another attempt to chip away at reproductive health services,” Gov. Jay Inslee said. “I stand with Attorney General Ferguson and Insurance Commissioner Kreidler in their efforts to protect Washingtonians.“
Details of the new rule
The Trump Administration’s rule applies specifically to qualified health plans sold to individuals on state-run health care exchanges such as the Washington Health Benefit Exchange. More than 200,000 Washingtonians are covered under qualified health plans.
Under the Affordable Care Act, federal funds cannot be used to cover abortions. The ACA requires insurers to collect a separate payment from individual health plan enrollees for the portion of their monthly premiums that cover abortion services, so the funds for those services can be kept separate. A 2015 federal regulation allows insurers to collect these separate payments on a single monthly, itemized bill.
The Trump Administration’s new rule requires insurance companies to send or e-mail two separate bills for the same insurance plan each month — one for abortion coverage and one for all other coverage. They also must request the abortion payment in a “separate transaction,” demanding two separate payments for the two bills.
Often, abortion coverage accounts for less than a dollar of a patient’s monthly premium. The rule requires insurers to charge enrollees at least one dollar for abortion coverage. All enrollees will receive the second bill, regardless of whether or not they received abortion services.
This will cause unnecessary confusion for Washington consumers — for example, men or other people who don’t need and may not even know they have abortion coverage — who are likely to assume the second bill is a scam, an error or an optional fee that doesn’t apply to them. If consumers mistakenly do not pay, they risk losing coverage. Forty percent of qualified health plan enrollees in Washington would lose coverage within 30 days of missing a payment.
Impacts in Washington
This rule affects the more than 200,000 Washingtonians who are covered under qualified health plans, putting many of them at risk of losing their coverage. The rule is highly likely to increase the number of uninsured Washingtonians who must rely on the state for their health care — particularly in parts of the state where many residents depend on individual qualified health plans. In five Washington counties, 40 percent or more of the population have enrolled in a qualified health plan. Four of those counties are in Eastern Washington.
If the rule goes into effect, many people will fail to pay their premiums in full. In 2018, 13 percent of people enrolled in qualified health plans in Washington lost their benefits because they failed to pay their premiums. People are more likely to miss their payments and lose their insurance if they receive more than one bill in a single pay period. As more people leave a plan or fail to pay premiums, premium costs are likely to go up for everyone else on the plan.
The Trump Administration’s own estimates show that the rule will increase health insurance costs by over $400 million in 2020 alone. Washington insurance companies estimate that this rule will raise their administrative costs by $100,000 to $500,000 each, a total of $3.5 million, leaving less funding available to cover health services.
Ferguson’s lawsuit asserts that the rule violates the Affordable Care Act, which gives states authority to establish their own rules on this issue. Washington’s Legislature did that in 2019 when it passed a statute requiring insurers to send a single invoice for each pay period. The rule violates the Tenth Amendment of the Constitution, which prohibits the federal government from commandeering state officials to implement a federal regulatory agenda.
Assistant Attorney General Kristin Beneski is leading the case for Washington, working with Assistant Attorneys General Laura Clinton and Jeff Sprung.
Ferguson has now filed 56 lawsuits against the Trump Administration and has not lost a case. Ferguson has 25 consecutive legal victories against the Trump Administration. Seventeen of those cases are finished and cannot be appealed. The Trump Administration has or may appeal the other eight, which include lawsuits involving Dreamers and rules restricting contraception access. No court to rule on the merits of the Attorney General’s arguments in a lawsuit against the Trump Administration has ruled against the office. The remaining 31 cases have not yet been resolved.
The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Brionna Aho, Communications Director, (360) 753-2727; Brionna.firstname.lastname@example.org