Religious liberty group calls new mandate proposals inadequate

President Obama and HHS Secretary Sebelius at the press conference on Preventive Health Services and Religious Institutions  Credit C SPAN CNA US Catholic News 2 10 12 President Obama and HHS Secretary Sebelius at the press conference on Preventive Health Services and Religious Institutions. | C-SPAN.

A legal group that works to defend religious freedom says new government recommendations on implementing the federal contraception mandate fail to address religious groups' concerns.

Hannah Smith, senior counsel for the Becket Fund for Religious Liberty, told CNA on March 19 that the Obama administration is “trying to make it sound like an easy fix.”

However, its claims are “simply false” and its fundamental premise “defies basic economics,” she said.

On March 16, the Obama administration issued an advanced notice of proposed rulemaking to request feedback from the public on several possible ways to implement its “preventive services” mandate.

The administration has drawn heavy criticism over the mandate, which will require employers to offer health insurance plans that cover contraception, sterilization and abortion-inducing drugs, even if doing so violates their religious beliefs.

Faced with a storm of protest, President Barack Obama promised on Feb. 10 an “accommodation” for religious freedom that would shift the payment of the objectionable coverage to an insurance issuer or other administrator. The newly-released recommendations are suggested means of implementing that accommodation.

However, many religious individuals and groups believe that the accommodation does not do enough to respect their religious liberty. The Becket Fund has filed lawsuits on behalf of several organizations that have voiced this objection.

A March 20 analysis by the Becket Fund responded to the proposals released for feedback by the administration.

The group's analysis said that all of the suggestions put forward are problematic because they “continue to have the religious group facilitating the access to contraception” by providing lists of employees to the insurance issuer or third party administrator.

The accommodation dictates that religious groups that use an outside insurance company will contract with an insurance issuer that will be required to provide separate contraception coverage to the group’s employees.

According to the administration, the insurance issuers will pay for the contraceptive coverage from “the estimated savings” of eliminating the need for “services” that arise from not covering contraception.

However, the administration also acknowledged that premiums from multiple organizations are gathered into a pool, “from which the issuer pays for services.”

The Becket Fund pointed out that “the practice of pooling makes it impossible to trace whether any savings are made from reduced pregnancies.”

A recent survey of insurance companies indicated that the mandate will not actually cut costs.

In reality, the Becket Fund said, religious group will still end up paying for the coverage because the insurance company will “pass along the extra costs in increased premiums.”

Problems for self-insured religious groups

For religious groups that self-insure – meaning that the religious group acts as its own insurance company – the government has recommended that a “third party administrator” would administer the separate contraception coverage.

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The administration has offered four suggestions for funding in these cases, which are currently open for comments from the public.

In response, however, the Becket Fund’s analysis addressed each of these recommendations and rebuffed all four as inadequate.

The administration’s first suggestion was that third party administrators could fund the coverage using revenue from drug rebates, service fees or disease management program fees.

But the Becket Fund said that it may be illegal for the third party administrator to use such funds to pay for contraceptive coverage if that money actually belongs to the client. 

It compared the situation to investing, explaining, “It is illegal for an investment house to keep dividends and not repay them to shareholders.”

The central question that would need to be answered under this proposal is whether the drug rebate money would properly belong to the third party administrator or to all the organizations that had originally supplied the money, it explained.
If the pool of money that generated the drug rebate was owned by the contributors rather than the third party administrator, the administrator would be required to pro-rate the discounts back to those who pooled the money, it said.

Under the proposal, the administrator “would potentially be taking money away from a religious employer because the religious group would not be getting the rebate anymore,” since it would be going towards contraceptive coverage, it explained.

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The second suggestion offered by the federal government would involve the U.S. Office of Personnel Management, which is responsible for contracting with certain insurers to offer multi-state plans.

In developing such plans, the administration has suggested, the office could require these insurers to offer the contraceptive coverage for self-insured entities.

The Becket Fund said that this suggestion bolsters the argument made in its lawsuit that the government does have a means of accomplishing its goal without requiring religious groups to pay for it. 

Even so, it said, this route would not entirely address the objections of religious organizations because it would still require them to provide their employees’ information to the third party administrator. 

A third possibility put forth by the administration makes use of a reinsurance program through which insurance companies decrease their risk.

As part of the process of creating new exchanges with individual plans, a program will be used to offset the cost of reinsurance.

Under the health care plan, insurers and third party administrators will pay money to a reinsurance entity, and these payments will be redistributed to those that are most at risk.

The administration has suggested that administrators that fund contraceptive coverage for religious organizations could offset this cost with a credit against their payments to the reinsurance fund.

However, the Becket Fund said that this proposal would essentially turn the reinsurance fund “into a slush fund to pay for contraceptive services.” It also noted that the administration has acknowledged that the reinsurance program is a transitional measure that is only intended to operate for a few years, so it would not provide a permanent solution to the problem.

The final option suggested by the administration is that a third party administrator could receive funding through donations from a private, non-profit organization.

The Becket Fund called this option “an obvious reference to Planned Parenthood and other similar organizations” where people can already receive contraception. It questioned the need for the mandate at all if such organizations already provide the controversial products and procedures for low-income individuals.