WASHINGTON — The Obama administration on Friday proposed another compromise to address objections from religious organizations about a policy requiring health-insurance plans to provide free contraceptives, but the change did not end the political furor or legal fight over the issue.
The proposal could expand the number of groups that do not need to pay directly for birth-control coverage, encompassing not only churches and other religious organizations but also some religiously affiliated hospitals, universities and social-service agencies. Health-insurance companies would pay for the coverage.
The latest proposed change is the third in the past 15 months, all announced on Fridays, as President Obama has struggled to balance women’s rights, health care and religious liberty. Legal experts said the fight could end up in the Supreme Court.
Kathleen Sebelius, secretary of health and human services, said the proposal would guarantee free coverage of birth control “while respecting religious concerns.”
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Kyle Duncan, general counsel of the Becket Fund for Religious Liberty in Washington, D.C., which is representing employers in eight lawsuits, said the litigation would continue. “Today’s proposed rule does nothing to protect the religious freedom of millions of Americans,” Duncan said.
The government’s new offer, in a proposed regulation, has two parts.
Administration officials said it would more simply define the religious organizations that are exempt from the requirement altogether. For example, a mosque whose food pantry serves the whole community would not have to comply.
For other religious employers, the proposal attempts to create a buffer between them and contraception coverage. Female employees would still have free access through insurers or a third party, but the employer would not have to arrange for the coverage or pay for it. Insurers would be reimbursed for any costs by a credit against fees owed the government.
Cardinal Timothy Dolan, leader of the U.S. Conference of Catholic Bishops said the bishops and their lawyers would review the new regulations. “We welcome the opportunity to study the proposed regulations closely,” Dolan said Friday.
In Seattle, at Providence Health & Services, a large, not-for-profit Catholic health-care organization that operates hospitals and other health services in Washington, early indications were that the proposed rule was viewed as good news.
“While this is a proposed rule and not yet final, we are encouraged and appreciate the Obama administration’s effort to find an accommodation that preserves long-standing conscience protection laws,” said Colleen Wadden, Providence’s director of external communication.
Providence will review the proposal to better understand its implications for the health system and insurance plan, she said.
Likewise, Gale Robinette, spokesman for the Franciscan Health System, a Catholic organization that operates five hospitals and other services in Pierce, South King and Kitsap counties, said leaders will analyze the proposed rule to fully understand the expanded definition of “religious employer” and the proposed accommodations for self-insured employers.
The Obama administration first issued standards requiring insurers to cover contraceptives for women in August 2011. In January 2012, the administration rejected a broad exemption sought by the Roman Catholic Church for insurance provided by Catholic hospitals, colleges and charities. After criticism from Catholic bishops and GOP lawmakers, the administration offered a possible compromise that February.
But it left many questions unanswered and did not say how coverage would be provided for self-insured religious organizations.
Under the new proposal, churches and nonprofit religious organizations that object to providing birth-control coverage on religious grounds would not have to pay for it.
Female employees could get free contraceptive coverage through a separate plan that would be provided by a health insurer. Institutions objecting to the coverage would not pay for the contraceptives.
Many insurers asked where they would get the money to pay for birth-control pills if — as the proposed rule says — they cannot “impose any premium, fee or other charge” for the coverage.
The 2010 health-care law generally requires employers to provide women with coverage at no cost for “preventive care and screenings,” which the administration says must include contraceptives for women under most health plans without charge.
The proposed rule is ambiguous on who would pay for contraceptive coverage. On Friday the administration proposed a complicated arrangement to finance coverage for employees of religious organizations that serve as their own insurers. The federal government would require health-insurance companies to help defray the cost.
In return, the insurers would get a credit against the fees they pay for the privilege of selling health insurance to millions of Americans in new online markets run by the federal government.
Seattle Times health reporter
Carol M. Ostrom contributed
to this report.
Material from The Associated Press and The Washington Post is included in this report.