This post is part of a series sponsored by AgentSync.
Since Congress passed the Affordable Care Act (ACA) in 2010, it’s faced many challenges, and the newest comes from a court case recently decided by a judge in Texas: Braidwood Management, Inc. v. Becerra.
Braidwood Management and other plaintiffs are businesses and individuals who said that covering HIV prevention is a violation of their First Amendment religious rights. They also asserted the bodies which determine what counts as preventive care (and therefore must be covered without copays by health insurance) don’t have the authority to do so. Their case is against the U.S. Department of Health and Human Services (HHS), naming HHS Secretary Xavier Becerra as the suit’s defendant.
Judge Reed O’Connor, a judge for the U.S. District Court in the Northern District of Texas, delivered a ruling partially in favor of the plaintiffs in September 2022. His ruling and subsequent remedy – released March 30, 2023 – would severely limit the ability of the federal government to direct insurance carriers to cover certain preventive care services that weren’t listed in the initial March 2010 implementation of the ACA. The HHS will likely appeal the ruling, sending the final decision on preventive care services to the U.S. Supreme Court.
The HHS released a statement April 13, 2023, indicating the Biden Administration will seek a stay in the ruling and remedy until a higher court decision.
In the meantime, states may take disparate approaches to implementing (or not) the judicial remedy from Braidwood v. Becerra. The early responses from many DOIs show the insurance industry will once again be sidelined as they wait to see who will win with the political football game that the ACA has become.
Here we’ll explore the arguments at play in Braidwood Management, Inc. v. Becerra, including explanations of the HIV prevention drug at the heart of the case, the arguments against the preventive care list process, and a sample of state departments of insurance that have responded to the ruling and remedy.
The argument of Braidwood Management, Inc. v. Becerra
Braidwood and the other plaintiffs – including the original plaintiff, Kelley Orthodontics – brought the case with a multi-pronged argument, much of it regarding the organizations that determine the preventive care formularies.
What organizations determine which preventive care treatments should be covered by health insurance?
The ACA tasks three organizations with determining the preventive care formularies for four areas of health care. The U.S. Preventive Services Task Force (PSTF) determines preventive care for clinical preventive services, the Advisory Committee on Immunization Practices (ACIP) oversees vaccine-preventable recommendations, the Health Resources and Services Administration (HRSA) takes special interest in women, the geographically isolated, and the vulnerable, as well as providing expert recommendation for preventive care and screening for newborns up to age 21.
What is the Braidwood, Kelly Orthodontics, et al argument?
The plaintiffs – six individuals and two businesses – argued:
- The ACA preventive-care mandates violate the Appointments Clause of the U.S. Constitution.
- The ACA preventive-care mandates violate nondelegation doctrine of U.S. administrative law.
- The ACA preventive-care mandates violate the Vesting Clause of the U.S. Constitution.
- The ACA preventive-care mandates should apply only to the guidelines in place at the time Congress passed the ACA.
- Mandating PrEP coverage, as well as several contraceptive services and HPV prevention, is a violation of individual and business rights under the Religious Freedom Restoration Act.
The defendants – HHS Secretary Becerra, Treasury Secretary Janet Yellen, Labor Secretary Martin Walsh, and the U.S. government – argued: They’re wrong.
Some of this argument is procedural; asserting that the transfer of power from Congress and the president isn’t correctly handled. The key concern with the plaintiffs’ original points 1 through 4 is that the preventive care formulary is determined by medical experts who are members of the PSTF, ACIP, and HRSA, without approval or oversight by an elected official.
The other part of this argument, though, is personal. Which leads us to …
What is PrEP?
Pre-exposure prophylaxis, also known as PrEP, is a variety of medications that proactively prevent people from contracting HIV through sexual activity or shared-needle use, and prevents pregnant or nursing moms from passing on the virus. Some people take it as a daily medication while others do bimonthly injections. PrEP medications are highly effective: more than 90 percent effective in preventing HIV contraction through sexual contact and more than 70 percent effective in preventing HIV contraction through needle use. A prescription for PrEP medicine can also run $20,000 a year.
Which brings us to the personal aspect of this case. The plaintiffs, including Braidwood owner Steven Hotze, argued they shouldn’t have to pay for insurance coverage, either for themselves or for their staff, that includes PrEP coverage to prevent HIV. As the judge’s September 2022 ruling summarized, “Through the preventive-care mandates, ACA insurance policies must cover, among other things, PrEP drugs, the HPV vaccine, and screenings and behavioral counseling for STDs and drug use. Hotze objects to those services on both religious and non-religious grounds, claiming they facilitate and encourage homosexual behavior, intravenous drug use, and sexual activity outside of marriage between one man and one woman.”
Braidwood decision and remedy
In September, on the plaintiff’s five points, Judge O’Connor ruled that the PSTF’s role in deciding the preventive service formulary violates the Appointments Clause, but that HRSA and ACIP don’t. He also denied that the formulary violates the nondelegation doctrine or the Vesting Clause. But he agreed that the mandatory inclusion of PrEP violated the Religious Freedom Restoration Act, despite Becerra’s objection that Braidwood’s damages are hypothetical:
“Defendants point out that Braidwood has not provided evidence that it has paid for or will likely pay for PrEP drugs. In Defendants’ view, that makes Braidwood’s injury hypothetical.”
The judge disagreed, which is how we get to the remedy judgment that O’Connor put out in late March. While his initial ruling made a summary judgment for several pieces of the puzzle, it didn’t present a path forward for Braidwood or Becerra in terms of the PrEP coverage or Appointments Clause decision.
In his remedy, O’Connor ruled any “rating by the U.S. Preventive Services Task Force made on or after March 23, 2010 violates the Appointments Clause.” The judge’s interpretation is that mandatory coverage requirements don’t apply to any services the PSTF added after March 23, 2010.
Further, he dismissed the religious objections to contraceptive coverage, but maintained that mandated PrEP coverage violated Braidwood et al’s rights under the RFRA: “the Court ENJOINS Defendants and their officers, agents, servants, and employees from implementing or enforcing the PrEP mandate as against these Plaintiffs”
Braidwood Management, Inc. v. Becerra’s reception
This thing is headed to the Supreme Court.
And, until then, if Judge O’Connor’s ruling was the final word, then insurance carriers could drop PrEP (and lots of other preventive services) coverage. But there are a few realities that make this situation especially sticky.
For one thing, most carriers already have their coverage contracts in place, and they last for a year, period. (And if this ruling is particularly concerning to you, as a consumer, Kaiser Family Foundation did a spectacular breakdown of how this might affect consumers.)
Another barrier to insurance carriers making sweeping changes to their coverage: State DOIs.
While this piece has focused on a specific aspect of the ACA – federally regulated health insurance – let’s not forget that insurance is mostly the domain of the states. And each state department of insurance has its own take on the Texas ruling.
Washington, Connecticut, Maryland, and Michigan’s Commissioners of Insurance sent out news releases in early April to discuss their administrations’ approaches to the ruling.
Washington Commissioner Mike Kreidler implored insurance carriers in his state to continue coverage for all preventive services recommended by the PSTF despite the U.S. District Court decision. He also reminded carriers that, regardless of the ruling, Washington state enshrined provisions of the ACA in its insurance law, including the preventive care services as they stood in December 2016. All those services, insurers must still cover without cost-sharing in the state.
“I’ve urged the health plans doing business in Washington to continue covering all preventive services without cost-sharing for patients,” said Kreidler. “Millions of people rely on this benefit to get affordable coverage of early detection and prevention of serious medical conditions. After 13 years, this coverage has saved lives here in Washington and across the country.”
Connecticut Insurance Commissioner Andrew Mais warned consumers that the state doesn’t have the authority to regulate large employers’ self-funded plans, which are regulated by the Department of Labor and the Employee Retirement Income Security Act. But for those plans subject to state authority, Mais said his office would stand by the ACA.
“The Judge’s order specifically targeted the mandate for preventive care, such as drugs prescribed for Pre-exposure prophylaxis (or PrEP) to prevent getting HIV. The judge deemed this a violation of the religious rights of employers. However, this ruling will not impact Connecticut’s existing laws, which provide the same protections as those outlined in the ACA. Your rights in Connecticut will continue to be upheld.”
Maryland, similar to Connecticut, issued a consumer notice that employees with self-insured plans may be affected by the Braidwood decision, but, “This ruling does not affect you if you get your health coverage under an insurance policy (or HMO contract) issued by a health insurance company in Maryland. The ACA is a federal law. Maryland has its own health insurance laws and those state laws require Maryland health insurance companies to provide the same coverage for those recommended preventive services as the ACA provided.”
Michigan also alerted consumers on self-funded or self-insured plans that they should check to verify their coverage, and verify any coverage changes if their plan renews in the next year. Gov. Gretchen Whitmer announced that 100 percent of the fully insured market would retain their preventive care coverage thanks to the pledges of Michigan insurers. Michigan Department of Insurance and Financial Services Director Anita Fox lauded the agreement with insurers in a news release.
“These agreements provide certainty to consumers and ensure that coverage for no-cost preventive healthcare services is maintained despite the Texas court decision until the issues are finally and fully resolved during the appeals in this legal proceeding,” said Fox.
Potential repercussions of the Braidwood v. Becerra remedy
The HHS is very, very likely to appeal the District Court ruling, and it’s likely that this case will find its way to the Supreme Court. This particular bench has a varied track record of responses to ACA-relevant cases, so there’s no point in speculating exactly how things might shake out.
Under the current remedy as it stands, the aforementioned DOI statements are some indication of how this will play. As insurance contracts come up for renewal, carriers that underwrite employers’ self-funded ERISA plans may take a regressive approach to covering preventive care services, looking to the March 2016 rules for care. Individual state markets, however, will be split over their state laws and interpretations as to how they approach the results of the case, not unlike the current approach to insurance coverage for elective abortion procedures.
While HIV treatment and prevention has come a long way, the HHS in its arguments said limiting access to PrEP could see a return of new infections from this fatal disease. As this case pits religious liberty against public health, any outcome is sure to prove divisive and give the insurance industry one more layer of complexity to navigate.