Industry reacts with caution on Braidwood vs. Becerra ruling; patient, provider groups are worried

Employers will have the choice to increase costs for some preventive services, if a new ruling against the Affordable Care Act (ACA) continues to be upheld by courts. The case, Braidwood v. Becerra, was overseen by U.S. District Court Judge Reed O’Connor.

O’Conner has ruled against the legality of the ACA on a number of occasions, most notably in 2018 when he ruled that the entire act was unconstitutional. That ruling was overturned by the Supreme Court in 2021. O’Conner’s latest ruling against the landmark health care law might also end up before the Supreme Court.

The ACA requires that preventive services be provided at no cost to the consumer; the O’Conner ruling said that one body that defines what services are preventive has too much power and that such power is not allowed under the Constitution’s Appointments Clause.

In theory, this ruling could have a dramatic effect on health plans: insurers could drop the no-cost coverage of preventive services such as screenings for cancer, diabetes, HIV, and mental health. Increased cost-sharing could discourage enrollees from receiving important preventive services.

In practice, many in the insurance industry are signaling that no changes to such services are likely in the immediate future. Perhaps due to the possibility that the case will be overturned, or perhaps because insurers are leery of taking away services from consumers, the consensus is that the industry will take a wait-and-see approach.

Concern from patient, provider groups

The immediate reaction from patient groups and provider organizations outlined some serious concerns about the ruling. A coalition of 23 groups representing patients and providers released a statement pointing out that the ruling could affect the health of millions of American who rely on preventive services to stay healthy.

“Since the Affordable Care Act was signed into law in 2010, more than 150 million Americans – including those covered by employer-sponsored, ACA marketplace and Medicaid expansion plans – have benefitted from no-cost preventive services such as cancer screenings, help to quit smoking, HIV prevention, blood pressure tests and many other health care services,” the group says in a statement. “This has not only saved lives, but studies show that high-quality coverage, complete with preventive services, improves the health of individuals and our country, lowers overall health spending and reduces health disparities.

“This decision directly threatens these benefits and would result in a return to financial and other barriers proven to discourage Americans from obtaining lifesaving, preventive care.”

A second ruling by the court was also alarming to health groups. The court ruled that employers could refuse to cover HIV drugs because of their religious beliefs. Specifically, it allowed employers to stop covering a medication aimed at reducing the spread of HIV. The preventive medication, pre-exposure prophylaxis (PrEP) is nearly 100% effectively in preventing transmission of HIV.

“This broad and dangerous order will impact critical preventative care services that millions of Americans rely on, including cancer screenings, pregnancy-related screenings and preventative mental health care,” says Ben Klein, GLBTQ Legal Advocates & Defenders (GLAD) Senior Director of Litigation and HIV Law. “Today’s order in Braidwood v. Becerra will have direct and devastating consequences for efforts to combat the HIV epidemic.” Klein called on Congress and state governments to require that insurance plans cover the drug with no cost sharing.

Insurers say they will not raise costs for now

For most Americans, the impact of the decision is unlikely to be felt in the short term. Insurers quickly said they would not change policies, and others pointed to how recent labor shortages have led to expanded benefits, rather than restrictions.

The insurance industry’s association, AHIP, released a statement on March 30 saying its member groups would continue to provide coverage at the same level as the ACA requirements, and noted the matter was likely to be appealed.

“Every American deserves access to high-quality affordable coverage and health care, including affordable access to preventive care and services that help avoid illnesses and other health problems,” says Matt Eyles, President and CEO of AHIP. “As we review the decision and its potential impact with regard to the preventive services recommended by the United States Preventive Services Task Force, we want to be clear: Americans should have peace of mind there will be no immediate disruption in care or coverage.”

The Society for Human Resource Management (SHRM) quoted an insurance industry executive as saying that a hike in cost sharing is not on the table for now. “It’s not a trend we’re seeing or even hearing about,” says Debra J. Williams, chief sales and marketing officer at Blue Cross Blue Shield of Massachusetts. “Preventive care is crucial in our employer customers’ strategy, and they want to make that path affordable and accessible.”

But will rising health care costs force employers’ hand?

If the affected preventive services are safe from price hikes for now, it doesn’t mean they will always be, if O’Connor’s ruling is upheld. Employers are struggling year to year with keeping down premiums as health care costs continue to rise. The lure of an opportunity to shift some of that cost to consumers may be difficult to resist for some employers.

The Employee Benefit Research Institute (EBRI) notes that their polling showed 80% of large employers said they would continue to cover preventive services in full, despite the ruling. However, 20% said they would not, or that “it depends.” That 20% of large employers could represent millions of Americans.

And smaller employers, which often rely on fully-insured plans, could turn to cost-sharing to blunt the financial impact of rising costs. The SHRM article quoted Tim Jost, professor emeritus at Washington and Lee University School of Law in Lexington, Va., as saying that smaller employers are in a different situation from larger ones. “If you’re talking about insured employers, and in particular small employers, it might look rather different,” he says.

Lisa Jarvis, of Bloomberg Opinion, notes that many studies show that increasing co-pays often leads consumers to forgo medications or treatments. “For example, one study found that increasing the cost of a drug by just $10 resulted in a 23% drop in the drug’s use — and an estimated 33% increase in monthly mortality,” she writes. “A Morning Consult poll found that 40% of adults would not pay for most of the services offered by ACA, and half would forgo services like HIV screening, smoking cessation treatment, and depression screening.”

Read more: Texas judge strikes down ACA’s free preventive care requirement

The consensus among experts was that it will take at least another year to see where the ruling stands, as likely appeals play out. Time will tell if O’Conner’s ruling signals continued controversy over the ACA, or whether it represents one last charge against a well-established law.