[Editor’s Note: On April 13, the U.S. Department of Justice requested a stay while it pursues an appeal of the Braidwood decision.)

By Sabrina Corlette

On March 30, 2023, a federal district court judge issued a sweeping ruling, enjoining the government from enforcing Affordable Care Act (ACA) requirements that health plans cover and waive cost-sharing for high-value preventive services. This decision, which wipes out the guarantee of benefits that Americans have taken for granted for 13 years, now takes immediate effect.

The US Department of Justice (DOJ) can and should ask the court to “stay” the decision—in lay terms, to stop it from going into effect—while they pursue an appeal. But such a stay is by no means a sure result, meaning that millions could, in very short order, lose access to no-cost early cancer screenings, mental health assessments, statins for heart disease, PreP to prevent HIV, and many more life-saving preventive services. And even before plans actually make changes to coverage for preventive services, uncertainty about such coverage could cause people to forgo life-saving procedures.

What’s At Stake: The ACA’s Preventive Services Benefits And The Braidwood Litigation

The ACA was enacted in 2010 and included new reforms and standards for health insurers designed to expand access to affordable, high quality insurance coverage. One of those reforms was a requirement that employer-based health plans and health insurers cover, without cost-sharing, high-value preventive services recommended by any one of three government panels, each composed of physicians and clinical experts. Coverage for more than 100 services has been mandated so far, including cancer screenings, childhood and adult immunizations, contraceptives, and mental health assessments.

Congress included the preventive services provision in the ACA because, when the law was enacted, many insurers did not cover critical preventive measures, or they imposed financial barriers, such as deductibles, copayments, or coinsurance, which limited their use. The preventive services coverage mandate is now one of the ACA’s most widely recognized, and popular, benefits, reaching 224 million people. It has led to the increased use of prevention, improved health outcomes, and reduced racial disparities in access to care.

In Braidwood Management v. Becerra, the plaintiffs challenged the constitutionality of the ACA’s preventive services provision. They argued that the three expert bodies charged with recommending the services to be covered were not constitutionally appointed given the amount of independence and discretion Congress gave them in the ACA. The district court agreed in part with these arguments, striking down any services recommended by the U.S. Preventive Services Task Force (USPSTF) since March 23, 2010, the date the ACA was enacted.

The Impact Of The Braidwood Ruling Will Depend On Your Source Of Insurance

The Braidwood decision affects primarily those with private health insurance. It throws Americans who obtain insurance either through an employer or directly from an insurer into a world of uncertainty. Some insurers may make reassuring promises now that they won’t discontinue coverage for preventive services, but it’s important to remember that, as mentioned above, the ACA included the requirement to cover preventive services without cost-sharing because many health plans did not do so at the time. Insurers’ number one job is to spend less on health care services. If some health insurers start rolling back benefits, it could become a competitive disadvantage for other insurers not to do the same. A press release, by itself, thus does not inspire confidence that, when given the chance, insurers won’t start to whittle away at these benefits.

In the short term, the security of preventive services coverage will vary based on the type of private insurance people have and how it is regulated. To (slightly) oversimplify, there are four types of private insurance people can have: self-funded employer-sponsored insurance (ESI), fully insured ESI offered by a large employer, fully insured ESI offered by a small employer, and individual insurance (both on and off-Marketplace). For each, the absence of the ACA’s mandated benefits could play out differently:

Self-Funded ESI:

This type of coverage is financed by the employer and regulated by the federal government. Many employers self-fund their health plans in order to escape state regulations, including state benefit mandates. A majority of U.S. workers (65 percent) are in self-funded plans. These plans get to decide whether they want to continue covering preventive services, or if they want to add cost-sharing. Any savings generated from reducing benefits go directly to employers’ bottom lines, an attractive prospect as many companies face pressure to reduce labor costs and maintain profit levels.

Further, these health plans can make benefit changes at any time (they do not have to wait for a new plan year) so long as they provide enrollees with a minimum of 60 days’ notice. This means that, as early as this summer, enrollees in self-funded ESI plans could lose coverage of critical preventive services, or face new cost-sharing charges when they receive them. Unfortunately, because these plans face few reporting requirements, it would be impossible to track whether and to what extent plans rolled back these benefits.

Fully Insured ESI (Large- And Small-Group):

These are policies that employers purchase from insurance companies that are subject to state and federal regulation. For many group plans that operate on a calendar-year basis, their benefits are mostly locked in through the end of 2023, after which insurers in most states could drop or impose cost-sharing for these services. However, while many state departments of insurance might restrict insurers’ ability to change benefits mid-year for plans sold to small employers, not all have the legislative authority to impose the same restrictions on plans sold to large employers. Further, many employer plans do not run on a calendar year cycle—they can renew at any point during the year. Insurers in most states have broad discretion to change their benefit designs when their plans are renewed.

Individual-Market Health Plans:

In contrast to the various flavors of ESI discussed above, individual-market policies are purchased directly through an insurance company or on the ACA Marketplaces. In the short term, people in individual-market plans are more likely to maintain access to free preventive services than those with ESI for three primary reasons. First, individual-market plans run on a calendar-year basis and material benefit changes are not permitted mid-year. The earliest individual-market insurers could drop benefits or add cost-sharing would be January 1, 2024. Second, at least 15 states have incorporated the ACA’s preventive services benefit into state law for individual-market plans, and these state laws are not at risk in the Braidwood case. Third, the federally run and many state-based Marketplaces could require, as a condition of certification, that participating health plans maintain the preventive services benefits.

Uncertainty Stemming From Braidwood Could Have A Chilling Effect

All Americans, regardless of their source of coverage, will likely be confused by the sweeping nature of the Braidwood decision: A single decision by a single judge in a Texas court has wiped out, nationwide, the ACA’s decade-old preventive service requirements. If the decision is allowed to stand, the result, as described above, will be a confusing patchwork of insurance benefit designs.

That means consumers will be uncertain about when and where they will have coverage or face cost-sharing. Providers will be similarly unsure about whether the preventive services they recommend will be cost-free for their patients, leading them to warn patients about potential cost-sharing. For many of those patients, the mere possibility that they will face cost-sharing for receiving a preventive service could cause them to delay or forego critical care.

The evidence is overwhelming that even a small amount of cost-sharing deters consumers from using services, including the proven, high-value services recommended by USPSTF. For example, the cost of a colonoscopy averages well over $1,000 in my home state of Virginia. Prior to the ACA, people with high-deductible plans could be required to pay that full amount. Even those without a deductible but with a modest coinsurance charge, such as 10 percent, would pay $100 or more out-of-pocket for a service, that, let’s be honest, most people don’t approach with great enthusiasm even when it is free. These kinds of out-of-pocket costs were–and could soon be again—a big deterrent to people obtaining this life-saving screening.

Looking Ahead

The DOJ will hopefully soon ask the district court for a stay of the judge’s decision. If it is granted, Americans can have peace of mind that their coverage will be maintained as the Braidwood decision is appealed. That would mean that 224 million Americans can continue to receive services that will help keep them healthy and, in many cases, save their lives.