Medicaid Abortion Funding Ban
P.A. 59 of 1987
On June 23, 1987, this initiative petition was approved by an affirmative vote of the majority of the members elect of the House of Representatives and filed with the Secretary of State. A statewide referendum vote (Proposal A) affirmed the law in November of 1988.
P.A. 124 of 1996
This law closed an enforcement “loophole” in the 1987 law banning Medicaid funding for abortion. Some services related to performing an abortion can also be part of legitimate and routine obstetric care. Some abortionists were charging medicaid for most of the abortion procedure by billing separately for part of the abortion services, such as an ultrasound. This law holds that any practice of separating or unbundling services directly related to the performance of an abortion for the purposes of seeking medicaid reimbursement is an inappropriate use of taxpayer dollars.This law should not be construed to affect diagnostic testing or other non-abortion procedures. Only physicians who actually perform abortions, and particularly those who perform abortions but do not provide prenatal care or obstetric services should view themselves as potentially affected. Unacceptable requests for reimbursements include those services which would not have been performed, but for the preparation and performance of a planned or requested abortion.
The Ban on Medicaid Funded Abortions
On July 18, 1994, U.S. District Judge Benjamin Gibson overruled part of P.A. 59 of 1987 ordering that the state provide Medicaid funds for women seeking abortions resulting from cases of rape or incest. Planned Parenthood and others filed the suit (April 4, 1994) after Governor Engler refused to follow a Clinton Administration mandate that the states must fund abortions for rape and incest or jeopardize all their federal Medicaid reimbursements. The federal Hyde Amendment was changed in 1993 allowing federal Medicaid dollars to pay for abortions in cases of rape and incest, along with abortions to save the mother’s life. Though not stated in the Hyde Amendment, the Clinton Administration issued a mandate that all states must provide matching Medicaid funding for abortions in cases of rape and incest.
Governor Engler appealed the ruling in the 6th Circuit Court of Appeals. This appeal, like that of at least 10 states, went in favor of the Clinton Administration. As a result Medicaid will provide reimbursement for abortions documented to be caused by rape or incest.
*An addition was made to the ban on Medicaid-funded abortions by the Michigan Legislature through Public Act 124 of 1996 in response to a scheme that had been developed to skirt the ban. Administration of Medicaid began gradually being shifted to private HMOs in the early 1990’s. It was discovered that HMOs had made arrangements with their primary care physicians and abortion clinics to refer Medicaid patients seeking an abortion to certain abortionists. The woman would pay a nominal “co-pay” of approximately $50, while the abortionist billed the HMO for “family planning services.” Since pregnancy tests, ultrasounds, and other diagnostic procedures can be legitimate parts of prenatal care or family planning, abortionists were simply “unbundling” the billing of their abortions services, arguing that the woman paid for “the actual abortion” with the $50.
H.B. 5458 made clear that services related to abortion were not to be billed to Medicaid. The bill passed in the House on December 14, 1995, by a vote of 74-31. Some minor modifications were made to the bill in the Senate, which passed the bill by a vote of 28-9 on February 22, 1996. On February 28, 1996, the House concurred in the Senate amendments by a 76-27 vote. Governor Engler signed the bill into law on March 12, 1996.
Michigan’s effort to end tax-funded abortions began in the late 1970’s after the U.S. Supreme Court handed down its first rulings finding bans on tax-funded abortions constitutional. The Legislature’s efforts through the late 1970s and 1980s to eliminate appropriations for Medicaid-funded abortions met no less than 17 gubernatorial vetoes. During those years the state financed an average of 19,000 abortions per year, at a cost of approximately $6 million annually. Data from the Department of Social Services indicated that approximately 10% of the abortions done in a given year were for women having their second, third, or fourth abortion, in the same year. By 1985, a full 43% of tax paid abortions were performed on women who had at least one previous abortion.
In February 1987, Right to Life of Michigan launched a petition drive to initiate legislation that would prohibit tax dollars for elective Medicaid abortions. Approximately 192,000 signatures of registered voters needed to be collected within 180 days in order to bring the initiative language before the Legislature. Over 460,000 signatures were collected in 83 days.
After the State Board of Canvassers verified the signatures, the legislation was brought before both the House and Senate in June 1987. Simple majorities were needed, and obtained, in both chambers to enact the law, P.A. 59 of 1987.
Abortion advocates then sought to repeal the law by exercising their right to a referendum vote on P.A. 59. In July 1987, opponents of the law launched a separate petition drive to place the question of repealing P.A. 59 on the next general election ballot. By February 1988, 220,000 valid signatures were collected. The State Board of Canvassers verified the signatures in April 1988, thus leaving the issue to be settled in a statewide vote in the November election.
On November 8, 1988, the people of Michigan voted 57% to 43% to retain P.A. 59. The law went into effect on December 12, 1988.
In January 1989, the ACLU, on behalf of a Medicaid recipient and her pregnant minor daughter,1 brought suit seeking to suspend the law and challenging its constitutionality. A Wayne County circuit judge hearing the case found the law to be acceptable under the Michigan Constitution and denied an injunction blocking its enforcement.
The ACLU filed an appeal with the Court of Appeals. On February 19, 1991 a three-judge panel of the Michigan Court of Appeals ruled that P.A. 59 was unconstitutional. The 2-1 decision was based on an interpretation of the Michigan Constitution which deviated from previous interpretations. The court found that the right to “privacy”2 guaranteed by our Constitution insures women a right to choose abortion which is at least as broad as the right to abortion granted under Roe v. Wade. The court also held that our Constitution’s equal protection clause does not allow the state to selectively fund prenatal care and childbirth as a “reproductive health service,” while at the same time denying funding for abortion.
The Attorney General and Right to Life of Michigan, which was granted status as an intervening defendant, appealed the ruling to the Michigan Supreme Court. On June 9, 1992 the Michigan Supreme Court, by a vote of 5-2, reversed the court of appeals decision and ruled that P.A. 59 was constitutional. The Court found that Michigan’s Constitution has historically been interpreted to parallel the federal Constitution. Thus, based on the precedents established by the U.S. Supreme Court in upholding a federal limit on Medicaid abortion, the Michigan Supreme Court sustained P.A. 59.
1The minor obtained an abortion with privately donated funds shortly after the case was filed.
2The word “privacy” does not appear anywhere in the Michigan or U.S. Constitution.