The Cardinal Newman Society has discovered that California’s own health plans for state employees cover only “medically necessary” abortions, even though Gov. Jerry Brown’s administration has called such language “discriminatory” and a violation of state law for Catholic and other employers who oppose elective abortion coverage as an infringement upon their religious and moral beliefs.
In addition, the Newman Society has collected evidence showing that California has not always considered elective abortion to be a mandatory, “medically necessary” insurance benefit, contrary to the public claims of a top California health official.
“Why can’t Catholics who are morally opposed to abortion have the same options as California state employees?” asked Patrick J. Reilly, president of The Cardinal Newman Society. “It’s evidently false that elective abortion has always been a mandatory health benefit in California. The Brown administration’s new and radical claim that ‘elective’ abortion is ‘medically necessary’ defies common sense and the practices of California’s leading insurance companies, and it violates basic religious freedoms.”
Michelle Rouillard, director of California’s Department of Managed Health Care (DMHC), wrote a letter in August to seven insurance companies, declaring that “abortion is a basic health care service” and claiming that the State had “erroneously” approved health plans that respected the religious beliefs of employers, including two Catholic universities. She announced that the Department would now force insurers to cover abortions that are not “medically necessary,” thereby denying the rights of Catholic schools, colleges and other religious employers to exclude elective abortion coverage from their employee health plans.
DMHC’s new policy violates the federal Weldon Amendment and risks the loss of federal funding to California, because it discriminates against insurance companies that fail to cover elective abortion. The Cardinal Newman Society, represented by the Alliance Defending Freedom and the Life Legal Defense Foundation, recently warned the Department and California insurers of the violation of federal law.
Now the Newman Society has discovered that Rouillard’s claim—that California has long considered elective abortion to be “a basic health care service” and made a mistake in approving plans that exclude elective abortion for Loyola Marymount University and Santa Clara University—is contradicted by the State’s own employee health plans.
All state government health benefits are administered through the California Public Employees’ Retirement System (CalPERS), a California agency under the supervision of Gov. Brown. CalPERS “covers more than 1.3 million active and retired state, local government, and school employees and their family members,” and employee insurance premiums for state employees are partially funded by taxpayers.
The 2014 summaries of benefits for the PERS Choice, PERS Select and PERS Care plans each limit covered abortions to those that are “medically necessary”—the very language that DMHC has called “discriminatory” and declared impermissible in the Catholic universities’ health plans.
In her letter to Anthem Blue Cross, dated August 22, Rouillard demands changes to its plans for private companies and nonprofits:
     Blue Cross must amend current health plan documents to remove discriminatory coverage exclusions and limitations. These limitations or exclusions include, but are not limited to, any exclusion of coverage for “voluntary” or “elective” abortions and/or any limitation of coverage to only “therapeutic” or “medically necessary” abortions.
But the state’s CalPERS plans for government employees—which are administered by Anthem Blue Cross—use the same “discriminatory” language that Rouillard condemns. Abortion coverage is clearly limited to “medically necessary” abortions, and according to the CalPERS plan summaries:
     "Medically Necessary" services are procedures, treatments, supplies, devices, equipment, facilities or drugs (all services) that a medical practitioner, exercising prudent clinical judgment, would provide to a covered individual for the purpose of preventing, evaluating, diagnosing or treating an illness, injury or disease or its symptoms.…
Among other things, “medically necessary” abortions must be:
     …not primarily for the convenience of the covered individual, physician or other health care provider; and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that covered individual's illness, injury or disease.
The Cardinal Newman Society called the customer service line for CalPERS and was told that in practice, “medically necessary” simply means that a patient must have a referral for an abortion from her doctor. According to the customer service representative, even a 16-year-old girl who wants an abortion for personal reasons can call it “medically necessary” and receive insurance benefits, as long as she has a doctor’s referral.
But that’s not official CalPERS policy, according to the plan summaries:
     The fact that a provider may prescribe, order, recommend or approve a service, supply, or hospitalization does not in itself make it medically necessary. The Plan reviews services to assure that they meet the medical necessity criteria above. The Plan’s review processes are consistent with processes found in other managed care environments and are consistent with the Plan’s medical and pharmacy policies. A service may be determined not to be medically necessary even though it may be considered beneficial to the patient.
The Cardinal Newman Society also contacted Bill Madison in the CalPERS Office of Public Affairs, who  explained that, ironically, CalPERS is not regulated by California state law. As a public pension fund, it is regulated as self-funded insurance under federal law. So, although CalPERS is a state agency and subject to the priorities of the Governor’s office, it is not bound to follow DMHC’s interpretation of the Knox-Keene Act, even while DMHC tries to impose elective abortion coverage on many religious schools, colleges and charities.
As for DMHC’s view of the law, it has not been so clearly defined as Rouillard would have insurers believe. DMHC claims that insurance plans excluding elective abortion coverage violate the Knox-Keene Health Care Service Plan Act of 1975. But Catherine Short, legal director of the California-based Life Legal Defense Foundation, provided The Cardinal Newman Society a copy of a 2012 chart of insurance benefits produced by the California Department of Insurance. It indicates that elective abortion was not considered to be a mandatory benefit in employee health plans, and it acknowledges that some plans did not cover elective abortion.
Also, an online benefits manual for PacificCare in California, which was acquired by UnitedHealth in 2005, distinguishes between “elective” abortions—which are generally excluded from coverage—and “therapeutic” abortions in cases of a “physical disorder, physical illness or physical injury, including life-endangering physical condition caused by or arising from the pregnancy.” PacificCare defines an elective abortion as “an abortion initiated by the member for reasons other than medical necessity.”
Anthem Blue Cross won approval from the DMHC to offer coverage excluding elective abortion to a Catholic client in 2008, according to California Lawyer. In 2012, Kaiser Permanente reportedly won approval to offer a plan, which excluded any abortions not deemed “medically necessary,” to all employers regardless of their religious affiliation. The journal claimed that there is a “public perception” of state constitutional protections guaranteeing abortion coverage, whether or not it is medically necessary, despite no state law or court ruling that specifically mandates coverage of elective abortion.
The Cardinal Newman Society is an advocacy group based in Virginia. 



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