- Associated Press - Thursday, March 31, 2011

A House panel voted Thursday to limit tax breaks for insurance policies that cover abortions as House Republicans try to chip away at President Obama’s health overhaul.

The House Ways and Means Committee voted 22-14 on a party-line vote to pass the bill, which would prevent people from deducting the cost of an abortion from their taxable income. The bill also would prevent small businesses and taxpayers from using tax credits in the new health care law to provide or pay for insurance policies that cover the procedure.

If women pay for an abortion using tax-free income set aside in a health savings account, the money would have to be reported as taxable income. There would be exceptions for cases of rape or incest, or if a physician certified that a woman’s life would be in danger if she didn’t end the pregnancy.

All Republicans voted in favor of the bill and all Democrats voted against it. The bill now goes to the full House, where it is supported by GOP leaders. The bill, however, faces strong opposition in the Democrat-controlled Senate.

Current law bars federal money for abortion, with the same exceptions as those in the bill. The health overhaul creates state marketplaces for insurance known as exchanges, and allows participating plans to cover abortions, as long as they collect a separate premium from policyholders and that money is kept apart from federal subsidies.

The abortion language in the new law resulted from a compromise among Democrats that didn’t leave everyone happy. Republicans were united in opposing the overhaul. Now, with their efforts to repeal it stalled in the Democrat-controlled Senate, Republicans are attacking it piece by piece.

Supporters say the bill is necessary because current law doesn’t go far enough in ensuring that no tax money is used to subsidize abortions. According to congressional estimates, the bill would raise only a negligible amount of tax revenue.

“The legislation is necessary because the Democrats’ health care law included a massive expansion of the IRS’ authority and concocted a host of ways to funnel taxpayer funds for various costs and procedures, including abortions,” said Rep. Dave Camp, Michigan Republican, the Ways and Means Committee chairman.

Rep. Patrick J. Tiberi, Ohio Republican, said, “What we are trying to do is codify long-standing policy that federal dollars should not be used for abortion.”

Opponents say the bill would make it difficult, if not impossible, for many women to obtain medical insurance that covers abortions — even if they pay for it themselves. Worse, they say, it could put the IRS in the awkward position of determining whether women who get abortions were sexually assaulted, so the agency can decide whether the procedure is tax-deductible.

“We will intrude into your life in the most difficult of circumstances and send in IRS agents, the ultimate bean counters, to determine whether your medical records, your criminal records, are sufficient,” said Rep. Richard E. Neal, Massachusetts Democrat.

By law, people can deduct medical expenses that exceed 7.5 percent of their adjusted gross income, a threshold that increases to 10 percent in 2013. They can set aside tax-free money in health savings accounts and spend it on approved medical expenses. The Internal Revenue Service lists the cost of an abortion as an approved medical expense.

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