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Legal challenges are threatening Trump administration changes to the ACA

HHS is facing an increasing number of challenges to its changes to the 2010 health care law

Health and Human Services Secretary Alex Azar testifies during a House Education and the Workforce Committee hearing on June 6, 2018. (Tom Williams/CQ Roll Call file photo)!
Health and Human Services Secretary Alex Azar testifies during a House Education and the Workforce Committee hearing on June 6, 2018. (Tom Williams/CQ Roll Call file photo)!

The Trump administration, which has already been defeated in a number of high-profile legal cases, is facing an increasing number of challenges to its changes to the 2010 health care law and women’s health issues.

Just last week, the Justice Department filed a brief arguing that the entire health care law should fall, a position that even some conservative legal scholars call risky. Two days later, on Wednesday, a federal judge struck down the administration’s rules requiring Medicaid recipients to report their work hours to keep their coverage. On Thursday, another judge blocked the administration’s expansion of association health plans, which let small businesses band together to buy insurance and do not have to meet all of the 2010 law’s requirements.

“Sometimes the strategy is mistakenly to go for too much, rather than take a partial win,” said Thomas Miller, a resident fellow at the right-leaning American Enterprise Institute. “It doesn’t get as loud a cheer from President Trump or folks at the rally. But it accomplishes some degree of change in the right direction. There’s on occasion been a tendency to overshoot that mark and that’s where they run into trouble.”

The Department of Health and Human Services has already faced separate challenges on its limits to a health care law mandate to cover contraception, its redefinitions of who can apply for funds to prevent teen pregnancy, and its expansions of other health plans that do not comply with the 2010 law.

Litigation is also still ongoing on changes to a federal family planning program and risk-corridor payments intended to temporarily stabilize health care plan premiums.

“In general, they have really exercised the bounds of their administrative authority and because of this sort of absence of legislative reform on health care, it certainly makes sense that we’re seeing some of the more controversial aspects of what was in the legislative efforts tried to be applied by the administration,” said Tricia A. Beckmann, director of Faegre Baker Daniels Consulting and who was part of a suit that challenged the federal government over yet another issue, its end to payments to insurers to reduce consumers’ out-of-pocket costs.

Recent rulings

The trend of negative courtroom outcomes for the administration was on display last week.

U.S. District Court Judge James E. Boasberg, an Obama appointee, ruled against work requirements in Arkansas and for the second time in Kentucky for individuals who qualify under the health care law’s Medicaid expansion.

Republican Govs. Asa Hutchinson of Arkansas and Matt Bevin of Kentucky have both since urged HHS and the Justice Department to appeal. Centers for Medicare and Medicaid Services Administrator Seema Verma in a statement to CQ said the agency will “continue to defend our efforts to give states greater flexibility to help low income Americans rise out of poverty.”

But the Boasberg ruling may spark other similar Medicaid lawsuits. Eight states are currently pursuing work rules through approved waivers.

“We have health law partnerships in the states with approved waivers similar to the Kentucky and Arkansas waivers and are actively considering the enforcement and litigation options in each of them,” said Mara Youdelman, managing attorney at the National Health Law Program, one of the plaintiffs in the cases and a similar suit in New Hampshire.

In the other decision last week, District Judge John D. Bates, a George W. Bush appointee, blocked association health plans after 11 states and the District of Columbia filed suit in 2018.

Bates found that the plans were designed to “avoid the most stringent requirements of the ACA,” using the health law’s acronym.

Association health plans, or AHPs, are touted by Republicans as a less expensive option to plans in the law’s marketplaces. Democrats argue that they will attract younger, healthier individuals away from marketplace plans — which could increase costs for older or sicker individuals.

Miller of AEI expects the health plan decision to get reversed on appeal, but says a path forward for Medicaid work requirements is more complicated.

“They had plenty of warning signs on that one,” he said, referring to the Kentucky Medicaid decision. “They have to think about a more creative, narrower, nimbler way to do it.”

A decision also is likely this year in a case involving short-term plans — cheaper options that the Trump administration extended.

Republicans note that during part of the Obama administration, consumers were allowed to use short-term plans for almost a year before new three-month limits were added. The Trump administration restored the prior duration, with renewals for up to three years.

Miller expects these plans to fare better than AHPs in court.

“The short-term plan challenge is probably one of the least strong challenges to date in terms of there is kind of a lack of prescription in the statute of what a short-term limited duration plan should be,” said Beckmann. “The court there has already expressed some skepticism in oral arguments. You can kind of see a little bit the writing on the wall.”

It’s also unclear how the ongoing battle on risk corridor payments — which the federal government said it would pay insurers to temporarily stabilize premiums — will play out. It’s currently pending before the Supreme Court.

Beckmann doubts the administration will win.

“It’s as much as about being a good business partner as it is about health care or Obamacare per se,” she said. “A lot of the amicus briefs point out that allowing the government to basically avoid paying $12 billion in money that the statute arguably requires them to pay will damage the government’s reputation.”

Women’s health

Advocates also challenged, often successfully, the Trump administration’s proposals to change abortion and contraception access.

Two weeks ago, the administration quietly stopped defending its changes to the Teen Pregnancy Prevention grant program after losing six different lawsuits on issues such as the duration of grants and who could qualify for them.

The administration also lost on its contraception policy changes.

In January, a federal judge issued a nationwide injunction blocking two rules from going into effect that would limit employer-sponsored coverage of birth control.

The 2010 law required most health plans to cover contraception, though courts subsequently allowed some exceptions. Trump’s rules would allow any employer to seek a religious or moral exemption to covering birth control.

Alliance Defending Freedom, a conservative legal group, is optimistic about future legal challenges on other Trump policies. The group successfully challenged the health care law’s contraceptive mandate in 2014 in the Supreme Court case Burwell v. Hobby Lobby, which ruled that closely-held for-profit corporations do not have to cover contraception if its owners oppose it on religious grounds.

Denise Burke, ADF’s senior counsel, said that each court case should be considered separately. She predicted the administration will likely defeat challenges to changes to the federal family planning program known as Title X.

The Trump administration issued a rule set to take effect in May that would bar organizations that provide abortions or abortion referrals from applying for federal family planning grants. About a half dozen separate lawsuits are challenging these changes.

Burke says there is a growing consensus that family planning money should not flow to centers that inform patients about abortion in order to avoid violations of an annually renewed law banning federal funds from being used for abortion in most cases.

Chuck Donovan, president of the Charlotte Lozier Institute, a conservative organization, agreed that the administration will likely prevail in the challenges to Title X changes.

Donovan cited precedent set in Rust v. Sullivan, a 1991 Supreme Court case that ruled in favor of similar changes — though federal law has changed since then. Since 1996, annually renewed appropriations language has said patients must receive neutral counseling on family planning options.

“We think [the case is] a very strong precedent for what’s happening now,” said Donovan, adding that Attorney General William Barr was a deputy at DOJ when that case was heard and is familiar with the details. “It’s almost déjà vu all over again. It wasn’t a particularly conservative court then that found the HHS’s changes and judgment on this was well within the parameters of the requirements.”

Miller of AEI is more skeptical.

“It looks like an arbitrary singling out and that’s going to be hard to pull off,” he said.

FDA’s record

Sometimes the courts have ruled in the administration’s favor on health-related issues. Outgoing Food and Drug Administration Commissioner Scott Gottlieb on Friday touted the agency’s courtroom record.

“One of the things about FDA is when we develop policy we go through very careful processes, we develop a very firm administrative record, so we win in court,” he said at an Alliance for a Stronger FDA event.

He mentioned lawsuits over rules on e-cigarettes, including the liquid nicotines that fuel the devices — rules originally promulgated by the Obama administration but backed by the Trump administration. Numerous e-cigarette manufacturers and pro-vaping interest groups challenged the FDA’s finding that e-cigarettes and liquid nicotine should be regulated as tobacco products when they don’t actually contain tobacco. In 2017, a district court judge found that the FDA acted within the scope of its authority, though a federal appeal is still pending.

While the FDA was criticized for the nearly seven years it took to craft that rule, Gottlieb argued that taking time on rules makes them more durable.

“That’s the importance of going through, I think, a very careful policy-making process and making sure you have a very firm administrative record,” he said. “What you do hangs around.”

Andrew Siddons contributed to this report.

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