Have We Seen the End of Cost-Free Preventive Care?

On March 30, 2023, the United States District Court for the Northern District of Texas issued a final judgment in the case, Braidwood Management, Inc. v Becerra.  The case was brought by a number of sponsors of group health plans challenging the provisions of the Patient Protection and Affordable Care Act, commonly known as the ACA, that require such plans to provide certain preventive care without cost-sharing to the plan participants.

The impetus for the lawsuit was the development of pre-exposure prophylaxis (“PrEP”) drugs to prevent HIV infection.  The plaintiffs, Christian-owned businesses, claimed that PrEP encouraged same-sex intercourse, which was contrary to their religious beliefs.

As a result, the plaintiffs claimed that the ACA’s requirement that their group health plans provide PrEP to plan participants infringed upon their religious freedom.  The Court agreed with the plaintiffs and enjoined the government from enforcing certain of the ACA’s preventive care provisions.

Background

The case specifically challenged section 2713 of the Public Health Service (PHS) Act, which was added by the ACA.  Section 2713 requires non-grandfathered group or individual health insurance plans to cover, without cost-sharing, certain preventive care.  Among the items or services covered by section 2713 are:

1. items or services that have received a rating of “A” or “B” from the United States Preventive Services Task Force (USPSTF);
2. immunizations for routine use in children, adolescents and adults recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention(CDC);
3. evidence-informed preventive care and screenings for infants, children and adolescents recommended by the Health Resources and Services Administration (HRSA); and
4. such additional preventive care and screenings for women not otherwise described in section 2317(a)(1).

The judge’s ruling in Braidwood is national in scope, and it effectively prevents the government from enforcing the ACA with respect to preventive care recommended by the USPSTF after March 23, 2010.  You may wonder how a lone, District Court judge in Texas could issue an order that affects every person in the country.  That is a good question, but one that is beyond the scope of this article.

The Government Responds

The Department of Labor, the Department of Health and Human Services, and the Treasury Department (collectively, the Departments) are charged with the implementation and enforcement of the ACA.  On April 13, 2023, the Departments jointly issued Frequently Asked Questions (FAQs) to address issues arising from the Court’s decision in Braidwood.  In addition, the Departments affirmed their disagreement with the Court’s order and stated that the Department of Justice has filed a notice of appeal in the case.

Q1: Which USPSTF-recommended items and services are affected by the Braidwood decision?

Only those items designated as “A” or “B” by the USPSTF on or after March 23, 2010, are covered by the Court’s order.  Any such item designated as “A” or “B” by the USPSTF before March 23, 2010, must still be provided by health plans without cost-sharing to plan participants.

Q2: After Braidwood, are plans required to continue providing coverage for items designated as “A” or “B” by the USPSTF after March 23, 2010?

No.  Plans are no longer required to provide such coverage without cost-sharing, and the Departments are no longer able to enforce such coverage requirements.  However, plans are not precluded from providing such coverage without cost-sharing, and the Departments “strongly encourage” plans to continue to provide such coverage without cost-sharing.  The Departments note that preventive care helps participants avoid acute illness and costly care and, further, that more people have sought such preventive care since the adoption of the ACA’s preventive care provisions.

Q3: Does the Braidwood decision affect immunizations recommended by ACIP or preventive care and screening for infants, children, adolescents, and women recommended by HRSA?

No.  The Court’s order only enjoins the enforcement of items and services  designated as “A” or “B” by the USPSTF.  It does not affect immunizations recommended by ACIP or preventive care and screenings recommended by HRSA.  These include such items as COVID-19 vaccines, contraceptive services, breastfeeding services and supplies, cervical cancer screening and pediatric care recommended by HRSA; all of which must continue to be provided without cost-sharing.

The Departments also noted that there may some overlap between items recommended as “A” or “B” by the USPSTF after March 23, 2010, and immunizations recommended by the ACIP or preventive care and screenings recommended by the HRSA.  In the event of any overlap, health plans are required to continue to provide such care and services without cost-sharing, notwithstanding the fact that they were designated as “A” or “B” by the USPSTF after March 23, 2010.

Q4: Can states require insurance to cover items designated as “A” or “B” by the USPSTF after March 23, 2010, without cost-sharing?

Yes.  The business of insurance is state regulated, and nothing in federal law restricts the right of the states to regulate insurance.  A state can require that an insurance company that issues health insurance cover preventive care without cost-sharing, even if that preventive care was designated as “A” or “B” by the USPSTF after March 23, 2010.

Q5: Can a plan sponsor make changes to its plan in the middle of the plan year?

The answer to that question is “it depends”.  As discussed above, the Court’s decision in Braidwood simply enjoins the Departments from enforcing the preventive care provisions of the ACA.  It does not require a plan sponsor to take any specific action.  There may be other federal or state laws that would prevent a plan sponsor from changing its plan during the plan year.  In addition, a plan sponsor may have certain contractual obligations, such as a collective bargaining agreement, that would prevent the plan sponsor from making any changes to its plan.

Q6: Must plan sponsors notify participants of any changes?

The Court’s decision is silent on the obligations of plan sponsors.  It simply enjoins the Departments from enforcing the preventive care provisions of the ACA.  However, there are other federal and state laws, such as ERISA, which require notice of changes to employee benefit plans. For example, ERISA requires that a plan sponsor provide 60 days’ notice of a material modification to a plan.

Q7: What effect does the Braidwood decision have on High-Deductible Health Plans?

High-Deductible Health Plans (HDHP) are governed by section 223(c) of the Internal Revenue Code (the Code).  That section provides that an HDHP may cover preventive care, without cost-sharing, even if the participant has not reached his or her deductible.  Nothing in the Court’s decision affects this provision of the Code.                

Q8: How does the Braidwood decision affect Coronavirus preventive services?

It has no effect.  The COVID-19 vaccines have been recommended by ACIP.  They do not have an “A” or “B” designation from the USPSTF.  The Braidwood decision does not change the requirement that such immunizations be provided without cost-sharing.

Where Do We Go From Here?

The best advice at this point is to do nothing.  While the Court’s decision prevents the Departments from enforcing the preventive care provisions of the ACA, it does not direct plan sponsors  to no longer provide such coverage.  A plan sponsor that acts prematurely could end up violating other provisions of the ACA, other federal or state laws or contractual obligations.

In addition, the Department of Justice has filed its notice of appeal.  So, the District Court’s decision is just the beginning, not the end of this matter.

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