District Court Blocks ACA Provision Mandating Coverage of Preventive Services

Health Highlights

The Affordable Care Act (ACA) requirement for commercial coverage of certain preventive services without cost sharing is unenforceable, according to a March 30 decision in Braidwood Management, Inc. v. Becerra by Judge Reed O’Connor in the U.S. District Court, Northern District of Texas. This decision has potential implications for nearly all commercial health plans, both individual plans sold on the Marketplace and employer-based plans (except the few remaining pre-ACA plans that are grandfathered). The decision may also have implications for Medicaid coverage of preventive services, although this is not discussed in the court’s rulings.

Background. This latest order gives legal force to the court’s September 2022 ruling that the ACA preventive services requirement was unconstitutional insofar as it required all commercial plans to cover, without cost sharing, all services that received an “A”- or “B”-level recommendation from the U.S. Preventive Services Task Force (USPSTF). Specifically, the court found that this ACA provision violates the appointments clause of the U.S. Constitution because although USPSTF’s volunteer members qualify as “officers” of the United States who wield significant federal power, they are not appointed by the President and confirmed by the Senate, nor are they appointed by the Secretary of Health and Human Services (HHS), nor are their decisions independently ratified by HHS before becoming binding on commercial plans.1 The court also previously held that the specific mandate to cover preexposure prophylaxis (PrEP) drugs, which are used by persons at elevated risk of HIV infection, violated the Religious Freedom Restoration Act (RFRA) insofar as a plan sponsor had religious objections to covering this drug.

Following the September 2022 ruling, the court requested additional briefing on various outstanding issues, including what type of remedy the court should order in light of the legal rulings described above.

The March 30 Order. The court rejected HHS’ request for a narrow remedy focused on the individual plaintiffs. Instead, the court broadly prohibited HHS from enforcing the ACA preventive services requirement with respect to any USPSTF recommendations issued on or after March 23, 2010 (the date of the ACA’s enactment).2 As a result of this order, commercial plans could potentially seek to limit coverage or add cost sharing for services that were more recently recommended by USPSTF. HHS estimates that the preventive services requirement governs coverage for 152 million people with private insurance.

Among other conclusions, the court also expanded its ruling with respect to PrEP and religious freedom. Whereas the court had previously ruled that a plan sponsor could potentially claim a religious exemption under RFRA from complying with the PrEP coverage mandate, the court’s latest order appears to conclude that individuals who purchase health coverage can also claim an RFRA exemption from the PrEP coverage requirement. It is unclear what effect this ruling will have, however, given that the preventive services coverage requirement applies to health plans, not to individual plan enrollees.

Potential Next Steps. HHS has already appealed the district court’s ruling to the U.S. Court of Appeals, Fifth Circuit. It is also expected that HHS will request a stay to prevent the order from taking effect while the appeal progresses. If a stay is denied, HHS may—in conjunction with the Departments of Labor and the Treasury—issue guidance advising health plans on the implications of this latest order.

Such guidance may also address the implications for Medicaid, which in many cases is required to cover USPSTF-recommended services.

Congress could theoretically correct the appointments clause issue in the ACA preventive services requirement by, for example, making USPSTF’s recommendations subject to ratification by the HHS Secretary. It is unclear whether such a proposal would garner sufficient bipartisan support, however. And any such fix would not necessarily address the court’s RFRA ruling regarding PrEP coverage. Meanwhile, states have the authority to require state-regulated insurance (i.e., commercial coverage other than self-insured private-employer plans) to continue covering all USPSTF-recommended services without cost sharing.

1 By contrast, the court rejected similar constitutional challenges to commercial coverage requirements relating to two other bodies—vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) and women’s health services recommended by Health Resources and Services Administration (HRSA)—that are subject to greater HHS oversight.

2 In a prior briefing, the plaintiffs conceded that by enacting the ACA preventive services requirement, Congress effectively ratified all existing USPSTF recommendations. As a result, the appointments clause defect discussed above applies only to post-ACA recommendations from USPSTF.



pursuant to New York DR 2-101(f)

© 2024 Manatt, Phelps & Phillips, LLP.

All rights reserved