Federal Judge Strikes Down ACA Requirement for $0 In-Network Preventive Care for Certain Services
Update: On May 15, 2023, a federal appeals court issued a “stay” on the Texas judge’s ruling regarding ACA preventive care benefits. This temporarily halts the Texas judge’s recent decision until the case can be heard further in the court of appeals. The date for the appeals hearing has not yet been scheduled.
The Affordable Care Act (ACA) requires ACA-compliant plans to cover preventive care services at 100%, with zero out-of-pocket costs for the insured, when benefits are rendered in-network. This encourages ongoing engagement with one’s primary care physician, with a goal of identifying health concerns early – ultimately contributing to reduced costs, lower premiums, and better care.
The listing of preventive services to be covered at 100% is comprised and defined by four expert medical and scientific bodies. One of those is the U.S. Preventive Services Task Force (USPSTF). The other three are The Advisory Committee on Immunization Practices (ACIP), the Health Resources and Service Administration’s Bright Futures Project, and the Institute of Medicine’s Committee on Women’s Clinical Preventive Services.
On March 30, 2023, a federal District Court Judge in Texas ruled in Braidwood Management Inc. v. Becerra that the federal government cannot require health plans to cover the services recommended by USPSTF as “preventive care” because members of USPSTF are not appointed by the President or confirmed by the Senate.
The decision eliminates first-dollar, zero cost coverage for all preventive services recommended solely by USPSTF as of March 23, 2010, or later, which was the day the ACA was signed into law. Impacted services include coverage for certain colorectal cancer and lung cancer screenings, medications to prevent heart disease, perinatal depression prevention, HIV and STI screenings, anti-HIV medication, and more.
Separately, in the same Braidwood Management Inc v. Becerra case, the federal court in Texas also ruled that the current requirement for employers’ ACA plans to provide coverage for anti-HIV medication, pre-exposure prophylaxis (PrEP), is unconstitutional because the requirement violates certain employers’ religious beliefs. Siding with plaintiffs, federal Judge O’Connor ruled that requiring such coverage violates religious rights of the plaintiffs under the Religious Freedom Restoration Act (RFRA), agreeing with the Christian-owned company’s argument that coverage for PrEP “forces religious employers to provide coverage for drugs that facilitate and encourage homosexual behavior, prostitution, sexual promiscuity, and intravenous drug use.”
This is the first time the federal court has ruled that a preventive care item violates employers’ religious rights since the U.S. Supreme Court’s similar ruling on contraceptive benefits in the 2014 Burwell v. Hobby Lobby Stores, Inc. case.
Because of the ruling’s dual implications, PrEP, which was recommended by USPSTF after 2010, can now be subject to cost sharing, or plans can eliminate coverage for the drug altogether – at least, at the federal level. States, however, can implement their own protections. For example, the federal court decision does not impact fully insured ACA-compliant health plans in California. It does impact grandfathered plans in California, self-funded plans, and all plans in many other states – including Nevada.
While the changes are effective immediately, the Biden Administration has appealed the decision. Separately, the U.S Department of Justice has requested a “stay” from the federal Fifth Circuit Court of Appeals. If successful, the stay would pause the effects of the ruling until the appeals process is complete. The rulings could ultimately get appealed to the U.S. Supreme Court, which is relatively likely. Update: On May 15, 2023, a federal appeals court in New Orleans put a temporary “stay” on the Texas judge’s ruling. The lower court’s decision in Texas has been temporarily suspended until a federal appellate court can review the case. The date for the appeals hearing has not yet been scheduled.
As stated perfectly by Kaiser Family Foundation, “Any service that was first recommended by USPSTF after March 2010 (and is not also recommended by another group like HRSA or ACIP) would no longer be required to be covered without out-of-pocket costs. For example, services and medications like statins to prevent heart disease, lung cancer screening, PrEP to prevent HIV, and medications to lower the risk of breast cancer (e.g., tamoxifen) for high-risk women may now be subject to copays, deductibles, or coinsurance.”
While this decision impacts plans at the federal level, states can take their own action to implement protections and require coverage for such benefits for fully insured plans within their state borders. States are generally responsible for regulating fully insured plans, but do not have authority over self-funded plans.
California state law requires fully insured ACA-compliant California health insurance policies and plans to provide coverage for HIV prevention medication (PrEP), screening for sexually transmitted infections, and breast and colorectal cancer screenings as “preventive care” with zero cost sharing, regardless of the federal decision. Self-funded plans and grandfathered ACA plans in California, however, may still be impacted by the Federal District Court’s ruling.
The California Department of Managed Health Care released a statement from California Health & Human Services Agency (CalHHS) that recaps the movement California has made for these benefit protections in recent years. “Senate Bill (SB) 406 (Pan, 2020) amended state law to require health plans provide coverage of evidence-based items or services in the recommendations of the USPSTF independent of federal requirements under the ACA.
In addition, SB 523 (Leyva, 2022) established the Contraceptive Equity Act of 2022, expanding coverage of FDA approved contraceptive drugs and devices with no cost sharing, and SB 159 (Wiener, 2019) requires health plans provide coverage of preexposure and postexposure HIV prophylaxis drugs (e.g., PrEP).”
California also has active pieces of legislation moving through its legislative body that would explicitly require coverage without cost-sharing for anti-HIV medication and HIV screenings (SB 427), and STI screenings (AB 1645) for all plans regulated by the state – including grandfathered ACA plans.
We will keep you updated on the progress of the Biden appeal and future updates as they occur.
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