The Latest Threat to the Affordable Care Act
April 6, 2023
A federal judge ruled last week that one of the most popular provisions of the ACA requiring private insurers to cover preventive care for conditions including cancer and HIV is unconstitutional. ACA legal expert Nicholas Bagley breaks down the ruling and what it could mean for 150 million Americans with private insurance.
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DG: Last week, U.S. District Judge Reed O’Connor took another swing at the Affordable Care Act.
Clip: A new ruling late today could mean the end to a lot of free health care screenings…
DG: He struck down a provision that required insurers to cover preventive care — like cancer screenings and medications to prevent HIV — for free.
Clip: It jeopardizes free coverage of a wide range of services for some 160 million Americans.
Today, University of Michigan law professor Nick Bagley on what this could mean for the cost and quality of people’s health care.
From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein, this is Tradeoffs.
DG: When another Obamacare court case made headlines last Thursday, I knew exactly who to call.
Nick Bagley: Nick Bagley, I’m a law professor at the University of Michigan. I’ve been here since 2010 and before that was a Justice Department lawyer.
DG: Nick is one of the leading legal experts on the Affordable Care Act.
You’ve been following this case for a long time. You wrote up a piece, a really nice piece in The Atlantic two years ago saying that the courts may strike down free preventative care services for people. And I guess I’d just like to start off with some background: How did the ACA change insurance coverage for preventative care?
NB: Yeah. So before the Affordable Care Act, preventive services were treated much like any other kind of medical care when it comes to the amount that you have to pay out of pocket.
So when you go to the doctor and they ask you to make a copay or they ask you to pay through your deductible before your insurance kicks in, that turns out to be a barrier for a lot of people.
We have good evidence that people don’t get preventive care when you ask them to pay out of pocket in order to access it. So what the Affordable Care Act did was it said for certain kinds of preventive care that are designated by three separate expert bodies, those types of preventive care have to be covered by all insurers in the United States, including employers. All of those have to be covered at zero dollars to the patient.
DG: So, I can imagine a lot of folks are scratching their heads right now being like, what’s the problem with a free colonoscopy? What’s the problem with a free mammogram? And this ruling is coming from the same conservative judge, Reed O’Connor, who has taken what I think like 3 or 4 swipes at the ACA in the past. What was the legal question before him?
NB: It hinges on a pretty obscure provision of the U.S. Constitution called the appointments clause. The appointments clause basically says, and I’m simplifying a little bit here, that when the executive branch exercises the powers that Congress gives to it, those decisions have to be made by federal officers who are appointed in the right way. What that means is they’ve got to actually be appointed by the president or by the head of a department.
DG: Like the Department of Health and Human Services.
NB: Exactly. Right. And the challenge here says basically that the three bodies that Congress tapped to adopt preventive services rules for insurance companies, those bodies, they don’t comprise officers of the United States. They’re made up of private individuals who are experts in their fields, but they’re not officers. And that’s a problem because it’s an officer who has to make the final call.
DG: So that’s sort of the background around the ruling. What did Judge O’Connor actually determine?
NB: So the challengers here are a bunch of different organizations and individuals in Texas, and they have seized on a recommendation that the Preventive Services Task Force put out that said, hey, when it comes to these pre-exposure prophylaxis drugs, which are drugs that we prescribe to people to prevent them from getting HIV, that’s a covered preventive service. You’ve got to cover PrEP is what that’s called. So these plaintiffs are saying we don’t want insurance plans that cover PrEP. And the ruling is basically, look this entity, the Preventive Services Task Force, they’re experts. That’s good. But they’re not officers. And so they don’t have the authority to make that kind of call about what insurance has to cover or not. So the Biden administration is no longer able to enforce the provisions that say that insurance companies have to cover preventive services. And that’s true both for the PrEP mandate and also all of the other preventive services that this body has recommended since 2010 when the ACA was adopted.
DG: So the plaintiffs, a mix of medical providers and employers and some other folks, they’re kind of arguing basically the people, the experts you are talking about that have told insurers and employers what must be covered under preventative services have no legal authority to do that. Is that a fair characterization?
NB: It’s exactly right. Yeah. Insurance companies still have to cover all of the guidelines that were in place in 2010, but they don’t have to cover any updated guidelines or any new guidelines. What that means is we’re basically freezing our preventive services, you know, handbook in place as of 2010, and that’s not good for public health. And that problem is going to get worse over time.
DG: So let’s be clear because we’re talking about three different bodies, the Preventive Services Task Force being one of them, they’ve each made different recommendations as to what is covered. And so can you, Nick, walk us through what is still covered and what is not covered?
NB: Yeah, it’s a good question. So one of the bodies is in charge of setting immunization schedules for childhood pediatric vaccines or for the COVID vaccine. And another body that the shorthand is HRSA is responsible for adopting preventive services specifically for women. And this is the entity that said that contraception is a covered preventive service, also covers things like breast pumps for new moms. For both the immunization body and for this body covering preventive services for women, O’Connor said, you know, there’s no appointments clause problem there.
DG: And that’s because those two bodies were created by the Department of Health and Human Services, so they can follow that chain of accountability you were talking about up to the secretary and the president.
NB: Exactly. Right. So those are still in place. But the plaintiffs here are likely to appeal that portion of Judge O’Connor’s ruling, which means that contraception is very much still in play in the litigation, because you’ve got a very conservative U.S. Court of Appeals for the Fifth Circuit, which is going to have a chance to review Judge O’Connor’s ruling there. And I think there’s a decent chance that the Fifth Circuit will disagree with O’Connor and say that the same constitutional problem that exists for preventive services generally extends to immunizations and to contraception.
DG: When we come back, Nick explains what makes this case different from previous threats to the ACA and the health implications of getting rid of free preventive care.
DG: Welcome back.
I’m here with Michigan Law Professor and ACA legal expert Nick Bagley.
Nick, on Tradeoffs, we tend to stay away from politics. But whenever you get into legal cases having to do with the Affordable Care Act, it’s hard to avoid the politics. We’ve seen cases against the Affordable Care Act, that even according to some conservative legal thinkers, they see these cases as sort of weak. How does this case stack up?
NB: Yeah, this is a more substantial challenge. Now, it’s not to the entire Affordable Care Act. There’s no risk that the law is going to go away or that millions of people are suddenly going to lose health insurance coverage. So in that sense, the stakes here are a lot, lot lower than some of those earlier brushes with death that the ACA had. But the core legal challenge here has some force. I do think Judge O’Connor has made some pretty difficult to swallow decisions, but his appointments clause analysis is not outlandish. And I think we should all be paying attention because I think this is a very serious lawsuit.
DG: Some of these preventative requirements, Nick, have been in place for over a decade since the ACA was first passed. An analysis by the Peterson Center on Health Care and Kaiser Family Foundation found 60% of privately insured adults in the U.S. — that’s about 100 million people — receive this care in a typical year. What are the health implications of making people pay for preventative care?
NB: They’re not good. The one that worries me most is this pre-exposure prophylaxis drug. These drugs are essential to preventing the spread of HIV in a highly vulnerable population, and they’re expensive, and asking gay men to pay more out of pocket in order to protect themselves is pretty mechanically going to lead to more HIV infections.
Insurance companies are free to stick with the current approach they’ve taken to preventive services. And there’s some survey evidence suggesting that employers are at least right now inclined to kind of stick with the approach they’ve taken. And it makes sense that they would do that right, that people have gotten used to $0 preventive service care. People like it. Most preventive services are not that expensive, so they’re not going to save that much money by asking you to to shoulder a copay.
Down the line, you know, we’re going to learn more about other preventive services that we think are life saving right now. For example, I understand that the Preventive Services Task Force is considering a guideline on screening for anxiety for adults. And if they were to adopt such a guideline and say this makes eminent sense, insurers don’t have to offer it at $0 cost. And, you know, over time, not keeping pace with the best scientific evidence is going to chip away at public health. So I don’t want to overstate it. I also don’t want to understate it either.
DG: So this ruling has taken effect immediately. What happens next?
NB: So the government is very likely to ask for a stay pending appeal.
DG: And so a stay is just like a pause.
NB: It’s a pause. Yeah. It’s saying, look, I’ve issued this ruling, but I’m going to put it on pause and let the appeals court check my homework. And that seems like it’d be the most appropriate approach here. If a stay isn’t entered, then this litigation could go very quickly because there’s going to be an incentive to get clarity about the rules by the end of the year, certainly so that insurance companies can write next year’s insurance coverage knowing what the rules are. But my best guess is that for now, nothing much will change on the ground. It’s a matter of of time. And if a stay is entered, then we’re talking about a couple of years to work through the appeals process.
DG: We should also say there are 15 states that already have protections on the books that require free preventative services, but those don’t apply to big self-insured employers.
And there’s an easy nationwide fix here, right?
NB: Oh, there’s a snap of a fix. Sure. So the problem, remember, is that a federal officer didn’t make the final call here, so it’d be easy to add a sentence to the beginning of the statute and say, subject to approval by the Secretary of Health and Human Services, comma, all of the guidelines recommended by PSTF with an A or a B rating have to be covered at zero. It’s child’s play to write it. The challenge is finding the political will to adopt a statute like that. And, you know, to be honest, I have some maybe naive hope that Congress can step in here. You know, the Affordable Care Act is a big political issue. But there’s no partisan divide on whether people ought to be able to access preventive services and that it’s a good thing to design our insurance plans to encourage getting preventive care. And, you know, this kind of thing where I have some hope that maybe Republicans and Democrats can come together to just say, listen, this is very popular. People really like this care. It saves people’s lives and it saves us money. Let’s let’s do this. I certainly think Republicans are going to be under some pressure to do that. You know, I don’t want to be naive, but I do have some hope.
DG: Nick, thanks so much for taking the time to talk to us on Tradeoffs.
NB: Happy to do it. Thanks for having me on.
DG: I’m Dan Gorenstein. This is Tradeoffs.
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Selected Reporting and Research on Abortion Exemptions:
Health Plans No Longer Have to Cover All Preventive Care at No Cost. Here’s What to Know. (Sarah Kliff, New York Times, 3/31/23)
Obamacare Court Decision Hits Hardest for Low-Income Americans (Ian Lopez and Sara Hansard, Bloomberg Law, 3/31/2023)
A Texas Judge Just Invalidated The Preventive Services Mandate. What Happens Next? (Nicholas Bagley and A. Mark Fendrick, Health Affairs Forefront, 3/30/2023)
Texas judge strikes down free HIV drugs, cancer screenings under Obamacare (Alice Miranda Ollstein, Politico, 3/30/2023)
Preventive services use among people with private insurance coverage (Krutika Amin, Brett Lissenden, Allison Carley, Gregory Pope, Gary Claxton, Matthew Rae, Shameek Rakshit and Cynthia Cox; Peterson-KFF Health System Tracker; 3/20/2023)
The Push to End Cancer Screening Purgatory (Alex Olgin, Tradeoffs, 9/29/2022)
Free Preventive Services Improve Access to Care (Laura Skopec and Jessica Banthin, Urban Institute, 7/2022)
Access to Preventive Services without Cost-Sharing: Evidence from the Affordable Care Act (Office of the Assistant Secretary for Planning and Evaluation, 1/11/2022)
The Next Major Challenge to the Affordable Care Act (Nicholas Bagley, The Atlantic, 6/18/2021)
The Good Stuff (Leslie Walker and Dan Gorenstein, Tradeoffs, 12/11/2019)
Nicholas Bagley, JD, Professor of Law, University of Michigan,
The Tradeoffs theme song was composed by Ty Citerman, with additional music this episode from Blue Dot Sessions and Epidemic Sound.
This episode was produced by Ryan Levi and mixed by Andrew Parrella. Editing assistance from Cate Cahan.
Additional thanks to: the Tradeoffs Advisory Board and our stellar staff!