The Centers for Medicare & Medicaid Services (CMS) at the Department of Health and Human Services (HHS) released new guidance on the usage of ACA Section 1303 segregated accounts. Section 1303 of the ACA regulates how qualified health plans on the marketplace exchange cover abortion services, and prohibits federal dollars from being used to pay for abortion coverage in marketplace plans. It notably requires marketplace insurers to collect $1 per enrollee per month for “non-Hyde” abortion services that must be placed in a separate account. Many, if not all, insurers have collected more in these separate accounts than has been used to cover relevant abortion care services. 

The new CMS guidance claims that these excess funds do not need to be used for “non-Hyde” abortion services, as the governing statute explicitly requires, but can instead be moved into general accounts and used for other purposes after the plan year ends. This change in interpretation ignores the intent of the statute and may violate the text of the ACA. It also contradicts 2017 and 2023 guidance that acknowledges the unique nature of these accounts. The new CMS guidance comes out as  states like Maryland take steps to use these funds to fill gaps in abortion coverage, especially for individuals who face barriers to care.