Federal Judge in Texas Strikes Down ACA's Preventive Services Coverage Mandate

The Final Judgment

On March 30, 2023, the U.S. District Court for the Northern District of Texas issued a final judgment in Braidwood Management Inc. v. Becerra, invalidating a requirement in the Patient Protection and Affordable Care Act (ACA) that insurers cover all clinical preventive services granted an “A” or “B” rating by the U.S. Preventive Services Task Force (“USPSTF” or “Task Force”) without cost sharing.

The ruling takes effect immediately across the country, subject to a potential stay by Judge Reed O’Connor (the judge presiding over this case) or the U.S. Court of Appeals for the Fifth Circuit.

The ACA requirement under Section 2713 of the Public Health Service Act (“Section 2713”) applies to all commercial or private health coverage and Medicaid expansion programs in the 40 states that have expanded Medicaid (42 U.S. Code § 300gg–13). Thus, as of March 30, 2023, payors in these markets are no longer required to provide first-dollar coverage for certain preventive services.

While all preventive services recommended by the Task Force are affected by this ruling, perhaps most notably, plans will no longer be required to provide this coverage for pre-exposure prophylaxis (PrEP) for HIV, which was the specific requirement challenged under the Religious Freedom and Restoration Act (RFRA) (42 U.S. Code Chapter 21B). 

However, the opinion did not displace coverage of preventive services recommended by the Health Resources and Services Administration (HRSA) (women’s preventive health services and contraceptives) or immunizations recommended by the Advisory Committee on Immunization Practices (ACIP).

This final judgment was issued about six months after Judge O’Connor’s September 7, 2022, interim summary judgment decision, in which he held that it was unconstitutional for the USPSTF to make legally significant decisions about preventive services coverage and that the coverage mandate of PrEP for HIV violated the plaintiffs’ religious rights under RFRA. While his earlier opinion signaled an existential threat to both the Task Force and mandatory PrEP coverage, at the time of the interim summary judgment, Judge O’Connor did not rule on the scope of relief but instead called for additional briefing on the various plaintiffs’ standing in addition to the scope of relief. However, in his final ruling, Judge O’Connor dismantled a major, and overwhelmingly popular, component of the ACA. The nullification of the USPSTF’s role in ensuring coverage of preventive services will have widespread impacts on health care expenditures in the United States.

Case Background

The ACA incorporated the recommendations of three existing governmental entities—the USPSTF, HRSA, and ACIP—into its health insurance benefit requirements. This meant that these bodies, previously charged with making evidence-based recommendations, assumed the heightened responsibility of determining those preventive services that plans must cover.

The plaintiffs in the Braidwood case are employer-purchasers of health insurance coverage that sued the Department of Health and Human Services in 2022, alleging that the ACA’s requirement was unconstitutional and violative of RFRA because they are unable to purchase insurance that does not include coverage for preventive services. The plaintiffs made two legal arguments: (1) that Section 2713, as enacted by the ACA, violates the Appointments and the Vesting Clauses of the U.S. Constitution and (2) the mandated coverage of PrEP, which protects individuals against HIV transmission, substantially burdens the plaintiffs’ religious beliefs under RFRA.

To advance their constitutional claims, the plaintiffs argued that Congress’s delegation of authority to the Task Force violates the Appointments and Vesting Clauses of the U.S. Constitution because the Task Force is an independent agency that wields substantial executive power while being insulated from presidential control. Because USPSTF members are appointed solely by the non-confirmed director of the Agency for Healthcare Research and Quality, the plaintiffs argued that the powers conferred on the Task Force are unconstitutional under the Vesting Clause. Moreover, because Task Force members are not appointed and confirmed as federal officers but rather are independent experts, the plaintiffs argue that they cannot make certain consequential decisions, including mandating first-dollar coverage of certain preventive services.

The plaintiffs further argued that Section 2713 violates RFRA because the Task Force recommendation requiring coverage of PrEP for HIV prevention encourages “homosexual behavior, intravenous drug use, and sexual activity outside of marriage between one man and one woman,” all of which the plaintiffs religiously oppose. The federal government is prohibited by RFRA from “substantially burdening” an individual’s exercise of religion unless there is a compelling governmental interest and the burden is the least restrictive means of furthering that interest.

The Practical Effects of the March 30 Ruling

The extent to which a consumer is directly and immediately impacted by the March 30 ruling (which the Biden administration intends to appeal to the Fifth Circuit) will likely depend on the market through which that consumer receives health insurance coverage and the preventive services the particular consumer uses. For the individual market, open enrollment will begin on November 1, 2023, and for those currently receiving coverage through this market, their health insurance provider could choose to provide continuous coverage of these services through the end of the plan year. For those in the small group market, open enrollment does not necessarily coincide with open enrollment for the individual market. Many small employers that offer coverage through a health insurance marketplace may have a midyear open enrollment and plan year beginning. For these individuals, health insurers may have the opportunity to examine previously required preventive services and restrict full coverage of some. While Judge O’Connor’s ruling is in effect, those in the small group with midyear open enrollment periods will need to examine their specific plan’s benefit offerings.

Many plans allow for the unilateral modification of plan benefits during the year, but plans that choose to change their benefits are required by the ACA to provide notice of these changes to their enrollees at least 60 days before they become effective. While the March 30 ruling means that commercial insurers are no longer required to provide coverage for preventive services, unless the opinion is stayed during appeal, many might not change their coverage offerings simply because coverage of those preventive services is so popular and saves plans money in the long term. The consumers with the most significant loss of coverage at stake are those who seek PrEP for the prevention of HIV. Judge O’Connor’s ruling specifically acknowledges religious opposition to PrEP while broadly permitting non-coverage regardless of whether a particular plan or employer has religious objections.

What’s Next?

As stated above, the district court’s Braidwood decision will be appealed to the Fifth Circuit. In the meantime, defendants may seek to stay the final judgment from taking effect while the case is appealed. In December 2018, when Judge O’Connor invalidated the entire ACA in the case Texas v. U.S. (later California v. Texas), he also stayed his decision pending appeal, citing uncertainty Americans might experience in determining their health insurance needs while the case was under consideration.

It is unclear whether Judge O’Connor or the Fifth Circuit will do the same for the preventive services coverage mandate. Judge O’Connor’s ruling in Braidwood v. Becerra, eliminating the preventive services coverage mandate, is far narrower in scope than his ruling in Texas v. U.S. Further, in Texas, Judge O’Connor relied on statutory interpretation of the effect of Congress’s elimination of the ACA’s tax penalty for not purchasing insurance coverage, whereas Braidwood involves significant administrative law questions and allegations of burdens on religious liberty where the plaintiffs allege an ongoing harm. In the meantime, Americans who rely on preventive services coverage to cover the cost of PrEP, cancer screenings, pregnancy and infant-related care, cardiovascular disease prevention, and youth mental health screenings will be left with an uncertain future. 

Even if not raised by the plaintiffs on appeal, the Fifth Circuit could take the opportunity to strike down the coverage mandate in its entirety. The plaintiffs are likely to cross-appeal Judge O’Connor’s decision to exclude HRSA and ACIP from his enjoinment.

Regardless of how the Fifth Circuit might rule, this case is almost certain to reach the Supreme Court of the United States, marking the fourth time the ACA will be at issue in the nation’s highest court. This time, however, the ACA’s preventive services provisions will face a Supreme Court with a 6-3 conservative majority.

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This Insight was authored by Richard Hughes IV, Helaine I. Fingold, Devon Minnick, Erin Sutton, and William Walters. For additional information about the issues discussed in this Insight, please contact one of the authors or the Epstein Becker Green attorney who regularly handles your legal matters.