Washington – Congressman Raja Krishnamoorthi is raising concerns that health insurers may be diverting funds specifically earmarked for abortion coverage, potentially impacting access to reproductive health care. The Illinois Democrat, ranking member of the House Oversight Subcommittee on Health Care and Financial Services, has formally requested information from America’s Health Insurance Plans (AHIP) regarding the handling of these funds, citing recent guidance from the Centers for Medicare and Medicaid Services (CMS) as a key driver of his concerns. The core issue revolves around whether insurers are improperly using premium dollars intended for abortion services for other purposes, effectively converting dedicated healthcare funding into profit.
This scrutiny comes at a time of increasing restrictions on abortion access nationwide, making the proper allocation of these funds particularly critical. Krishnamoorthi argues that the CMS guidance, issued December 9, 2025, weakens the protections established under the Affordable Care Act (ACA) and creates a financial incentive for insurers to retain funds legally required to be used exclusively for abortion care. The ACA mandates that plans covering non-Hyde abortions—those not restricted by federal funding limitations—charge a minimum of $1 per member per month for that coverage. The concern is that insurers may be over-collecting these premiums and then failing to utilize the funds for their intended purpose.
Understanding the Segregated Funds
The issue centers on what are known as “Section 1303” funds, established under the ACA to ensure that premiums for plans covering abortion services are properly segregated and used only for those services. These funds are meant to prevent the commingling of federal funds with abortion coverage, adhering to the Hyde Amendment, which generally prohibits federal funding for abortion except in cases of rape, incest, or to save the life of the mother. But, Krishnamoorthi’s letter to AHIP suggests that the recent CMS guidance allows insurers more leeway in how they manage these segregated funds, potentially opening the door to misuse. He warns that this policy “fundamentally misreads the Affordable Care Act and unlawfully permits insurers to divert these segregated funds for purposes unrelated to abortion care.”
The Congressman’s concerns aren’t simply theoretical. He believes the current situation creates a “perverse incentive” for insurers to maximize the amount of abortion premiums collected and then retain any surplus, rather than ensuring that the funds are readily available to cover abortion care for those who need it. This is particularly troubling given the documented challenges patients already face in accessing reproductive healthcare, especially in states with restrictive abortion laws. A recent report by the Kaiser Family Foundation details the significant decline in abortion access since the overturning of Roe v. Wade, highlighting the increased financial and logistical burdens on patients seeking care.
Specific Questions for Insurers
In his March 31, 2026, letter—available on Congressman Krishnamoorthi’s website—the Congressman poses a series of detailed questions to AHIP, requesting a response by April 14, 2026. These include:
- Since the December 9, 2025, CMS guidance, how many AHIP member insurers have converted Section 1303 funds—those segregated for more than one year—into revenue, or used them for purposes other than abortion care? What were those purposes?
- Prior to the CMS guidance, had any AHIP members previously diverted Section 1303 funds?
- What is the total amount of funding currently held in segregated accounts by each AHIP member over the past decade?
- What is the actual cost to insurers of providing non-Hyde abortion coverage to their enrollees, considering the $1 per member per month requirement?
These questions aim to establish a clear picture of whether insurers are complying with the spirit and letter of the ACA, and whether the recent CMS guidance has led to a change in their practices. The answers could reveal the extent to which funds intended for reproductive healthcare are being diverted elsewhere.
The Role of CMS Guidance
The CMS guidance at the heart of this controversy interprets provisions of the ACA related to the allocation of funds for abortion coverage. While the agency maintains that its guidance clarifies existing regulations, Krishnamoorthi and other advocates argue that it weakens crucial protections for access to abortion care. The debate hinges on the interpretation of what constitutes an “allowable” use of Section 1303 funds. Critics contend that the CMS guidance opens the door to insurers using these funds for administrative costs or other purposes not directly related to providing abortion services. The CMS has not yet publicly responded to Krishnamoorthi’s concerns.
The implications of this situation extend beyond the financial aspect. As abortion access becomes increasingly limited in many states, the availability of funds to cover abortion care is more important than ever. For individuals facing financial hardship, these funds can be the difference between accessing necessary healthcare and being unable to do so. The potential diversion of these funds raises serious ethical and legal questions about the responsibility of insurers to ensure equitable access to reproductive health services.
The House Oversight Subcommittee on Health Care and Financial Services is expected to continue monitoring this issue closely. AHIP’s response to Krishnamoorthi’s letter will be a crucial step in determining whether further legislative or regulatory action is needed to protect funds dedicated to abortion coverage. The next key date is April 14, 2026, when AHIP is scheduled to provide its response.
This article provides information for general knowledge and informational purposes only, and does not constitute medical or legal advice.
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