Federal Court Decision Threatens the ACA’s Preventive Services Benefit: State Options to Mitigate Harm to Consumers
Sabrina Corlette and Justin Giovannelli, Georgetown Center on Health Insurance Reforms
The same U.S. federal district judge that declared the Affordable Care Act (ACA) unconstitutional in Texas v. California has issued a ruling in a lawsuit, Braidwood Management Inc. v. Becerra (formerly known as Kelley v. Becerra), that strikes down a requirement that health plans cover and waive cost-sharing for many critical preventive services. Although the U.S. Department of Justice is likely to appeal the ruling, some legal experts believe the Braidwood Management plaintiffs may prevail in the higher courts, too.
The preventive services benefit is one of the more popular provisions of the ACA. The loss of this protection means that over 167 million people will need to pay out-of-pocket for dozens of critical preventive services. When confronted with hefty deductibles or coinsurance, people tend to delay or forego even essential preventive services, making them more susceptible to costly and serious illness.
If the ACA’s preventive services provision is gutted, only Congress can fully restore it. Still, there are steps that state policymakers can take to help many of their residents maintain this coverage.
The ACA has two provisions governing the coverage of preventive health services. Section 1302 requires individual and small-group market insurers to cover preventive and wellness services as part of a minimum “essential health benefits” (EHB) package, but does not speak to a patient’s cost-sharing for those services. The Braidwood Management plaintiffs are not challenging the EHB provision. They are challenging another, much broader provision of the statute, Section 2713. This provision applies to individual, small-group, large-group, and self-funded group health plans, and requires them to cover, without cost-sharing, the following preventive health services:
- Services given an “A” or “B” rating by the U.S. Preventive Services Task Force (USPSTF), a group of experts appointed by the head of the Agency for Healthcare Research and Quality, an agency within the U.S. Department of Health & Human Services (HHS);
- Immunizations recommended by the Advisory Committee on Immunization Practices (ACIP), a group of experts appointed by the head of the Centers for Disease Control and Prevention;
- Services for women identified in guidelines published by the Health Resources and Services Administration (HRSA), an agency within HHS; and
- Services for infants, children, and adolescents published under HRSA guidelines.
The services recommended by these advisory bodies include a wide range of preventive screenings, tests, and exams, including cancer and heart disease screenings, birth control, immunizations, pre- and post-natal screenings, and child well-visits. Research has shown that enabling people to obtain preventive care without cost-sharing has boosted vaccination rates, increased the number of people who get recommended blood pressure, cholesterol, colorectal, and other screenings, and improved women’s access to effective contraception. The rate of unintended pregnancies has declined since the ACA’s requirement to cover contraception went into effect.
Braidwood Management v. Becerra: Legal Issues and Likely Next Steps
The plaintiffs in Braidwood Management are individuals and business owners who argue that the ACA’s preventive services provision is unconstitutional. The District Court judge’s ruling, announced on September 7, 2022, dealt a major blow to consumers’ access to coverage of preventive care. First, Judge O’Connor ruled that the preventive services provision violates the Appointments Clause of the U.S. Constitution, which governs how “Officers of the United States” must be appointed. The court concluded that the experts who serve on the USPSTF are “Officers of the United States” and that their appointments were improper. However, he rejected similar claims with respect to ACIP and HRSA, noting that for those two advisory bodies, the Secretary of HHS had “ratified” their recommendations.
Second, Judge O’Connor rejected the plaintiffs’ “nondelegation” doctrine claim, which argued that it was impermissible for the ACA to give authority to USPSTF, ACIP, and HRSA to determine what services must be covered. Congress has long delegated decisions on a huge range of issues, including those related to health and medicine, to federal agencies and expert advisory bodies. To pass muster, these delegations must include an “intelligible principle” to guide the agency’s decisions. Historically, this has been an easy standard to meet, and the Supreme Court has not used the nondelegation doctrine to strike down a law since 1935. Nevertheless, a majority of the justices on the current Supreme Court have indicated an interest in constraining federal agency actions, including by strengthening the nondelegation doctrine. While Judge O’Connor noted that the current Supreme Court may agree with the plaintiffs, he concluded that the nondelegation claim failed under existing precedents binding on his court.
Third, Judge O’Connor agreed with the plaintiffs that the requirement to cover pre-exposure prophylaxis (PrEP) to prevent the transmission of HIV violates the Religious Freedom Restoration Act (RFRA). The plaintiffs had argued that PrEP “facilitates and encourages homosexual behavior, intravenous drug use, and sexual activity outside of marriage,” violating their religious beliefs. Judge O’Connor agreed that the mandate to cover and waive cost-sharing for PrEP placed an undue burden on the plaintiffs’ exercise of their religion.
If Judge O’Connor’s ruling stands, it could erase access to affordable preventive services for over 167 million people. The judge has asked the parties to provide a briefing on what the appropriate remedy should be for the constitutional and RFRA violations he identified in his opinion. This could include a nationwide injunction eliminating the requirement for insurers and plans to cover and waive cost-sharing for many critical preventive services.
State Options to Protect Preventive Services Coverage
States will not be able to help workers covered in self-funded employer plans, which are regulated under federal law. Only an act of Congress can restore the preventive services benefit for these individuals. However, states have clear authority to regulate insurers and the plans issued to individuals and employers who do not self-fund their health benefits. Many states have exercised that authority by codifying the ACA’s insurance reforms into their own state laws, including the requirement that insurers provide zero-cost preventive benefits. Enshrining these protections in state law provides clear authority to a state’s department of insurance (DOI) to conduct oversight and enforcement. Indeed, many state DOIs have played a critical role making sure that their residents receive the full protections promised under the ACA. Since enactment of the ACA, state DOIs have issued rules and guidance on the law’s requirements, conducted oversight of insurers’ compliance by reviewing plan documents, and responded to and helped resolve consumer or provider complaints.
Preserving Zero-Cost Preventive Services: A State Checklist
States have multiple options to preserve zero-cost preventive services for residents in state-regulated health plans. These include:
- Review current state law. Many, but not all states have incorporated Section 2713 of the ACA into their own insurance codes. Those that have not may wish to do so now that the provision is in legal jeopardy. Those that have already codified Section 2713 may wish to review their law to ensure that health insurers will continue to be required to comply, even if the Supreme Court ultimately deems Section 2713 unconstitutional.
- Review the state Essential Health Benefit (EHB) benchmark plan. States may wish to review their current EHB benchmark plan to ensure that it clearly covers all of the USPSTF, ACIP, and HRSA recommended preventive services. If not, states may wish to update their EHB benchmark plan so that it maintains these benefits, as well as any future recommendations from USPSTF, ACIP, and HRSA. States must submit any EHB updates to federal regulators by May 3, 2023 for the 2025 plan year.
- Require individual and/or group market plans to cover and waive cost–sharing for preventive services. States can mandate coverage of preventive services and prohibit associated cost-sharing, independent of the ACA’s preventive services benefit. This can be done either through a legislative mandate, or as a certification requirement of Marketplace health plans.
- Require state employee health plan coverage. To protect state employees who could lose access to preventive services without cost-sharing if Section 2713 is ruled unconstitutional, states may need to require these plans to provide these benefits.
- Use your bully pulpit. Although states can’t set standards for employer plans regulated under ERISA, state policymakers and others can call on employers to publicly pledge not to backtrack on covering preventive services.
The ACA’s guarantee of free access to preventive services is at risk. If it is struck down as unconstitutional, Congress will need to act to restore the benefits. However, as the case winds its way through the federal court system (and likely ends up before the Supreme Court), there are steps that states can take to mitigate the fallout, at least for residents covered under state-regulated insurance. State officials can also use their leadership positions and access to the media to call on employers with federally regulated health plans to voluntarily maintain comprehensive coverage of preventive care.