Earlier this month the 5th Circuit Court of Appeals heard oral arguments regarding a case about the ACA’s preventive care services.
The case, Braidwood Management Inc. v. Xavier Becerra, previously known as Kelley v. Becerra, dates back to 2020 and involves Texas District Judge Reed O’Connor, the same judge who previously ruled the ACA unconstitutional without the federal Individual Mandate.
The court hearing, which took place on March 4, focused less on the substance of the case and more so on the events that transpired after O’Connor applied his ruling across the entire U.S. The Justice Department argued that the application of the ruling was inappropriate while some Circuit Court Judges felt the determination was the “default” choice.
What happens next remains unclear, but the future of the ACA’s preventive care services is at stake.
A Brief History of the Section 2713 Case
In Braidwood Management Inc. v. Xavier Becerra, the plaintiffs assert that Section 2713 of the ACA, often referred to as the preventive care clause that guarantees eligible individuals receive specific healthcare services without needing to pay a copayment, infringes numerous sections of the constitution, their conservative religious beliefs and violates the Religious Freedom Restoration Act.
And in the original 2020 statement, Braidwood Management argues that the costs associated with Section 2713 force them and other religious employers “to provide coverage for drugs that facilitate and encourage homosexual behavior, prostitution, sexual promiscuity, and intravenous drug use.”
Then, in September 2022, O’Connor ruled in favor of the plaintiffs and subsequently eliminated the requirement for insurers to cover select preventive care services as mandated by Section 2713 of the ACA.
O’Connor’s decision was then applied across the entire U.S., in a nationwide injunction issued in March 2023, to which the Biden administration filed an appeal and a stay so that the services would remain in effect until an appeals hearing.
The Constitutional Debate
The requirement for insurers to cover specific services comes from recommendations made by three government agencies; the Preventive Services Force (PSTF), the Advisory Committee on Immunization Practices (ACIP), and the Health Resources and Services Administration (HRSA).
O’Connor’s decision to strike down the ACA’s Section 2731 stems from the Appointments Clause of the Constitution, which essentially states that people must be officers of the U.S. to use government powers.
In the case, the plaintiffs assert that the PSTF, ACIP, and HRSA deciding the preventative care service recommendations were not properly appointed by the U.S. government, but rather, were assumed into positions of power due to the ACA’s verbiage.
What Happens Next?
If the case proceeds in favor of Braidwood, more than 150 million Americans stand to lose many free and low-cost healthcare services, including cancer screenings, substance abuse counseling, and vaccinations, such as COVID-19.
Appeal hearings will continue until a consensus can be reached. Circuit court judges will determine whether the case should apply strictly to Brentwood Management, the state of Texas, or the entire U.S.
While unlikely, if the Justice Department does not obtain the outcome it’s looking further, the case may be appealed again and find itself in front of the Supreme Court.
The good news, however, is that, unlike previous attacks on the ACA, if Section 2731 is struck down and applied across the entire U.S., it won’t dismantle the entirety of the law.
State of The ACA
As the Appeals Court determines the fate of the ACA’s preventive court services, the ACA continues to gain momentum leading up to the election later this year.
A recent report issued by the Kaiser Family Foundation finds that 6 in 10 Americans hold a favorable view of the now 14-year-old healthcare law.
ACA enrollment is on the rise as well. In fact, the most recent enrollment saw over 21 million sign-ups through both state and federal marketplaces, a notable increase from the 16 million enrolled the previous year.
Individual states are taking things into their own hands as well. Michigan, for example, codified a law last November that prohibits health insurers from denying coverage based on pre-existing conditions — a provision that mimics requirements of the federal ACA.
The Great Lakes state joined 15 others that have written similar legislation in law, including California, Maryland, and Hawaii.
ACA Compliance Remains a Top Priority
While the future of Section 2731 remains uncertain, the ACA remains a bedrock of U.S. healthcare. And that means organizations must still comply with the Employer Mandate portion of the law.
Under the ACA’s Employer Mandate, Applicable Large Employers, those with 50 or more full-time employees and full-time equivalent employees, must offer Minimum Essential Coverage that meets Minimum Value and affordability to at least 95% of their full-time employees and their dependents.
Failing to meet these requirements could earn you a Letter 226J penalty notice from the IRS.
To understand where organizations struggle the most with ACA compliance, we conducted a research report. To find out how organizations are fairing and where they’re focusing their efforts each year, you can access it below.
