ACA Round-Up: Latest Uninsured Data, Preventive Services Litigation Updates, And More

There have been several new developments related to the Affordable Care Act (ACA) and the No Surprises Act. This article discusses the latest data on marketplace enrollment and the uninsured rate; updates on litigation over the preventive services mandate; a request for information on implementation of the advanced explanation of benefits (AEOB) requirement; and state updates from Wisconsin and Vermont.

Latest Data On Marketplace Enrollment And Uninsured Rate

On September 16, 2022, the Centers for Medicare and Medicaid Services (CMS) issued new data showing continued increases in effectuated marketplace enrollment (meaning an individual selected a plan and paid their premium). In total, 13.8 million people were actively enrolled in marketplace coverage as of February 2022, a 23 percent increase from the 11.2 million consumers who effectuated their coverage in February 2021. This means that 95 percent of the record-high 14.5 million consumers who selected a plan during the 2022 open enrollment period remained enrolled as of February 2022. Effectuated enrollment increased in 13 states but fell in four states.

Of the 13.8 million enrollees in coverage as of February 2022, about 90 percent (12.5 million consumers) received premium tax credits. This is a 29 percent increase from February 2021. Enrollment also increased significantly among lower-income people: there was a 25 percent increase in the number of consumers receiving cost-sharing reductions from February 2021 (5.4 million consumers) to February 2022 (6.8 million consumers). Average total monthly premiums were up slightly over this same period, rising from about $577 to about $586 even as the amount that consumers paid in out-of-pocket premiums fell by about 19 percent (more than $30).

The same report shows that an average of 11.7 million consumers were enrolled in marketplace coverage each month for the entire 2021 plan year. This too is a significant year-over-year increase: effectuated enrollment was up by 13 percentage points from 10.3 million in the 2020 plan year.

CMS credits the significant increase in enrollment and reduction in out-of-pocket premiums to its six-month COVID-19 special enrollment period in 2021 and the availability of enhanced marketplace subsidies under the American Rescue Plan Act (ARPA). The enhanced ARPA subsidies have now been extended through 2025, meaning continued savings and likely continued enrollment gains.

Census Bureau Confirms Stable Uninsured Rate For 2021

The Census Bureau’s latest report on health insurance coverage shows that more people were insured in 2021 than in 2020. In 2021, 8.3 percent of people (27.2 million people) were uninsured, down from 8.6 percent (28 million people) in 2020.

More than half of the population had employer-sponsored coverage (54.3 percent), followed by Medicaid (18.9 percent), Medicare (18.4 percent), individual market coverage (10.2 percent), and military coverage (3.5 percent). (People can be covered by more than one type of health insurance during the year.) There was a 1.2 percentage point increase the number of people covered through public programs; this uptick was driven largely by enrollment via Medicaid which increased by 0.9 percentage points.

Consistent with prior years, coverage rates among adults increased as age increased. More children (those under age 19) were insured in 2021 relative to 2020. Young adults remained the least likely to be insured in 2021, and those aged 19 to 25 had the highest uninsured rate (14.9 percent) of any age group. Hispanic people had the highest uninsured rate (18.3 percent), followed by Blacks (9.0 percent), Asians (6.2 percent), and non-Hispanic Whites (5.2 percent). People of color had higher rates of enrollment in public coverage while non-Hispanic Whites had higher enrollment in private coverage.

Coverage rates generally increased as income increased. Households with income at or above 400 percent of the federal poverty level had the highest coverage rates while those with income below 399 percent of the federal poverty level had double-digit uninsured rates. Uninsured rates for low-income people would be lower if more states expanded their Medicaid program—in 2021, the uninsured rate was 9.0 percent for expansion states versus 16.7 percent for non-expansion states.

Latest In Preventive Services Mandate Litigation

Briefing Schedule In Braidwood Management

On September 7, a federal district court judge in Texas, Reed O’Connor, held that one of the ACA’s key components—the requirement that plans and insurers cover evidence-based services recommended by the U.S. Preventive Services Task Force—violated the Appointments Clause and was thus unconstitutional. He also ruled that the requirement to cover an HIV prevention medication known as preexposure prophylaxis, or PrEP, violated one employer plaintiff’s rights under the Religious Freedom Restoration Act.

Judge O’Connor did not, however, reveal how far his ruling in Braidwood Management v. Becerra will extend or who it will affect and instead asked the parties for additional briefing. On September 28, Judge O’Connor set a briefing schedule to resolve 1) the scope of relief; 2) the standing of the plaintiffs other than Braidwood Management; and 3) any outstanding claims related to the contraceptive mandate. Briefs will be due beginning on October 24 with deadlines that will extend through mid-January 2023. From there, Judge O’Connor might schedule a hearing. Regardless, the major outstanding issues in Braidwood Management will not be resolved until at least January 2023.

After that, any ruling will presumably be appealed to the Fifth Circuit Court of Appeals and perhaps the Supreme Court in what would be a multi-year process. As we await the next wave of briefs and a future decision, the ACA’s preventive services requirement remains in effect, and coverage is not disrupted. But this timeline extends the uncertainty surrounding this decision.

Other Texas Court Orders Continued Coverage Of Natural Family Planning

Turning to a separate district court in Texas, Judge Jeremy D. Kernodle recently vacated the Biden administration’s would-be elimination of the coverage, without cost sharing, of fertility awareness-based methods of family planning (i.e., natural family planning) from the ACA’s contraceptive mandate. (Regular readers might recognize Judge Kernodle from his two prior decisions over implementation of the No Surprises Act; he manages to cite both those decisions in this latest decision.)

This lawsuit was filed in May 2022 by Cami Jo Tice-Harouff, a nurse practitioner in east Texas, who challenged guidelines on women’s preventive services issued by the Health Resources and Services Administration (HRSA) in December 2021. Under the ACA, insurers and group health plans must cover, without cost sharing, women’s preventive services as set forth in HRSA guidelines. The 2016 version of the guidelines included a sentence that acknowledged that fertility awareness-based methods are “less effective” but should be provided for women who want an alternative to FDA-approved contraceptives. That sentence was eliminated in the December 2021 version of the guidelines, leaving no explicit reference to fertility awareness-based methods of family planning. An initial notice about changes to the guidelines—along with a request for comment—was published in the Federal Register October 2021. This was followed by a subsequent notice of the updated guidelines in January 2022.

Tice-Harouff provides fertility awareness-based counseling to patients and believes the revised guidelines will prevent her from being reimbursed by insurers and employers for these services at her current rate of up to $450 per session. She argues that HRSA’s actions violated the Administrative Procedure Act by 1) failing to provide public notice and an opportunity to comment before deleting the sentence; and 2) being arbitrary and capricious because the change was not explained. Tice-Harouff requested a temporary restraining order, injunctive relief on a nationwide basis to prevent disruption for 2023 plans, and reinstatement of the deleted sentence.

The complaint acknowledges the October 2021 notice but argues that HRSA did not suggest it would eliminate the reference to fertility awareness-based methods. Tice-Harouff also criticized the comment process as not allowing comments to be submitted directly to HRSA, although HRSA has long relied on the Women’s Preventive Services Initiative (WPSI) to recommend updates to the relevant guidelines. The complaint also acknowledges that organizations such as the Catholic Medical Association did in fact submit comments to WPSI on the potential removal of the sentence on this topic.

Judge Kernodle agreed with Tice-Harouff, concluding that the deletion in the December 2021 rule likely violates the Administrative Procedure Act and that she is entitled to a nationwide preliminary injunction and temporary restraining order. Tice-Harouff has standing because she faces both a procedural injury (because HRSA failed to satisfy notice-and-comment requirements) and a financial injury (because HRSA’s decision could prevent her from keeping and attracting new patients). On the merits, he agrees that she is likely to show that HRSA violated the APA by failing to 1) give prior notice and the ability to comment on the change to the guidelines; and 2) offer any rationale to explain the change.

In reaching this conclusion, Judge Kernodle rejected arguments made by the government on standing and the merits. On the merits, federal officials had argued that the deletion did not actually eliminate the requirement to cover these services without cost sharing. Why? Because the guidelines still require coverage for education and counseling. But Judge Kernodle disagreed. He also did not credit other recent changes to the guidelines—including a new footnote on the guidelines to explicitly affirm that education and counseling included fertility-based awareness methods.

Federal officials also argued that they complied with notice-and-comment requirements by issuing the October 2021 notice (which reflected a deletion of the relevant sentence). And stakeholders did submit comments consistent with Tice-Harouff’s concerns, suggesting that there was both notice and an opportunity for public comment. But Judge Kernodle disagreed because the notice did not specifically mention that the sentence on fertility awareness-based methods had been deleted, and there is no indication that HRSA or WPSI considered the comments. He found the change to be arbitrary and capricious for similar reasons: HRSA did not even mention counseling for fertility awareness-based methods and thus failed to acknowledge a change, provide a reason for the change, acknowledge reliance interests, or explain why this approach was preferred.

What does the ruling mean? HRSA must reinstate the sentence that was previously removed from the December 2021 guidelines. As such, plans and insurers must continue to cover, without cost sharing, instruction in fertility awareness-based methods for women who want an alternative to FDA-approved contraceptives. Judge Kernodle also makes clear that federal officials cannot enforce the would-be change from the December 2021 guidelines without first issuing a final rule following notice and comment rulemaking procedures. Briefing will continue on the original complaint.

Federal Officials Solicit Comment On Advanced Explanation Of Benefits

On September 14, four federal agencies—the Departments of Health and Human Services, the Treasury, and Labor alongside the Office of Personnel Management—issued a new request for information to solicit public comment on implementation of AEOB requirements under the No Surprises Act. Comments are due by November 15.

The No Surprises Act entitles consumers to receive a good faith estimate of expected charges and an “advanced” explanation of benefits. This requirement is triggered when an individual schedules health care services (or requests the information) and went into effect on January 1, 2022.

If the patient is uninsured, the provider or facility must notify the patient of an estimate of expected charges for those services with expected billing and diagnostic codes. If the patient is insured, the provider or facility must provide this estimate to the patient’s plan or insurer. The plan or insurer, in turn, must send the patient an AEOB within 1 business day of receiving the good faith estimate. (If the scheduled care is at least 10 business days away, the AEOB must be provided within 3 business days of receiving the good faith estimate or the patient’s request.) The AEOB must explain whether the provider is in-network (or not); disclose the contracted rate for the item or service (or explain how to find an in-network provider); include the provider’s good faith estimates of costs; note the patient’s estimated cost sharing and progress towards meeting their out-of-pocket maximum and deductible; identify any medical management techniques that apply to care; and make certain disclaimers. It must also be written in clear and understandable language.

HHS implemented this requirement for uninsured patients in an interim final rule from fall 2021 and has issued additional guidance since then. However, this requirement has not been implemented for insured patients. After concluding that compliance by plans, insurers, and providers likely was not possible by January 1, 2022, federal officials deferred enforcement until after future rulemaking. In doing so, federal officials cited stakeholder concerns about technical challenges related to data transfer standards and infrastructure needed to transmit information between providers and payers.

New Request For Information

The request for information solicits public comment on these challenges and more to inform implementation of the AEOB requirement. Some of the questions are highly technical while others focus on the economic impact of requiring AEOB and good faith estimates for insured individuals, including time and cost burdens.

Among other topics, regulators pose questions regarding data transfers between providers and payers; opportunities to leverage interoperability tools and existing transparency requirements; privacy concerns; burdens on small, rural, or other providers; whether plans and insurers should have to provide a copy of the AEOB back to a provider or facility; interactions with secondary or tertiary payers where the AEOB and good faith estimate requirements do not apply (e.g., for Medicare or Medicaid beneficiaries); which items or services have sufficiently low utilization or significant cost variation such that the AEOB timing requirements should be modified; whether a diagnosis code is required to prepare an AEOB; whether entities should have to first verify a patient’s coverage before sending an AEOB or good faith estimate; and unique barriers and challenges for underserved and marginalized communities and those with disabilities or limited English proficiency.

Federal officials also ask about how the AEOB and good faith estimate requirements should interact with other No Surprises Act requirements. Examples include how providers should coordinate the timing of notice and consent requests with AEOB and good faith estimate requirements—or how out-of-network providers should inform a plan or insurer about a waiver or a good faith estimate. There are also a series of questions about whether state level protections (e.g., cost-sharing protections) and waivers should be incorporated into the AEOB and reflected in the patient’s cost-sharing estimates.

Wisconsin Requests Waiver Extension; Vermont Amends EHB Benchmark Plan

October 1 marked the end of the federal comment period on Wisconsin’s request for an extension of its state-based reinsurance program. Wisconsin has asked to extend its current program (which would otherwise expire at the end of the 2023 plan year) by an additional five years through the end of 2028. The extension, combined with improvements in the risk pool, is estimated to reduce premiums by about 12 percent (relative to what premiums would have been in the absence of the waiver). Federal officials deemed Wisconsin’s application complete on September 2 and opened a 30-day federal comment period.

Vermont received approval to amend its essential health benefits benchmark plan to ensure that, beginning in 2024, individual and small group plans will cover one set of prescription hearing aids every three years as well as annual hearing exams. Additional information about Vermont’s updated benchmark plan can be found here.