Tom and Mary Jo York are a health-conscious couple, going for annual physicals and periodic colorectal cancer screening exams. Mary Jo, whose mother and aunt had breast cancer, also gets regular mammograms.
York, who lives in New Berlin, Wisconsin, is enrolled in Corus Community Health Plan, which, like most health plans in the country, is required by the Affordable Care Act to pay for those preventive services, and more than 100 others, without deductibles or Copying charges.
Tom York, 57, said he appreciates the law’s mandate because until this year his plan had a $5,000 deductible, which would have meant that without the ACA provision, he and his wife would have had to pay full price for those services until the deductible. “A colonoscopy can cost $4,000,” he said. “I can’t say I would have avoided it, but I had to think hard about it.”
Now health plans and self-insured employers—those who pay medical expenses for employees and dependents themselves—can consider cost-sharing for preventive services among their members and employees. A Texas lawsuit filed by conservative groups stems from a federal judge’s Sept. 7 ruling that the ACA’s mandate that health plans pay the full cost of preventive services, often called first-dollar coverage, is unconstitutional.
US District Judge Reid O’Connor agreed with them. He ruled that members of one of the three groups recommending coverage, the US Preventive Services Task Force, were not legally appointed under the Constitution because they were nominated by the president and not confirmed by the Senate.
If the preventive services coverage mandate is partially eliminated, the result could be a confusing patchwork of health plan benefit designs offered in different industries and different parts of the country. Patients who have serious medical conditions or are at high risk for such conditions may have a difficult time finding a plan that fully covers preventive and screening services.
O’Connor also held that paying the plaintiff for HIV prevention drugs violated the Religious Freedom Restoration Act of 1993. He’s also considering throwing out the first-dollar coverage mandate for contraceptives, which plaintiffs also challenged under that law. O’Connor deferred judgment and legal remedies on the matter until Sept. 16 when additional briefs from the litigants are received. Whatever the judge does, the case could be appealed by the federal government and reach the Supreme. the court
If O’Connor orders an immediate end to the no-cost coverage mandate for services approved by the Preventive Services Task Force, nearly half of the preventive services offered under the ACA would be in jeopardy. These include screening tests for cancer, diabetes, depression and sexually transmitted infections.
Many health plans and self-insured employers will likely respond by imposing deductibles and copays for some or all of the services recommended by the task force.
“Larger employers will evaluate what they cover first-dollar and what they don’t cover,” said Michael Thompson, CEO of the National Alliance of Healthcare Purchaser Coalitions, a nonprofit group of employers and union health plans that work together to help lower prices. by . He thinks employers with high employee turnover and health insurance companies are most likely to share costs.
That could destabilize the health insurance market, said Kathryn Hempstead, senior policy adviser at the Robert Wood Johnson Foundation.
Insurers will design their preventive services benefits to attract the healthiest people so they can lower their premiums, he predicts, as sicker and older people skimp on coverage and have higher out-of-pocket costs. “It reintroduces the chaos that the ACA was designed to fix,” he said. “It becomes a race to the bottom.”
The most likely services targeted for cost-sharing are HIV prevention and contraception, said Dr. Jeff Levine-Scherz, population health leader at WTW (formerly Willis Towers Watson), which advises employers on health plans.
Studies have shown that eliminating cost sharing increases the use of preventive services and saves lives. According to a 2017 study published in the Journal of Health Affairs, after the ACA required Medicare to cover colorectal cancer screening without cost-sharing, early-stage colorectal cancer diagnoses increased by 8% each year, extending life expectancy for thousands of adults.
Adding cost-sharing can mean hundreds or thousands of dollars in out-of-pocket costs for patients because many Americans are enrolled in high-deductible plans. In 2020, the average annual deductible in the individual insurance market was $4,364 for single coverage and $8,439 for family coverage, according to eHealth, a private, online insurance broker. For employer plans, it was $1,945 for an individual and $3,722 for a family, according to KFF.
O’Connor has upheld the constitutional authority of two other federal agencies to recommend preventive services and vaccinations for women and children, so first-dollar coverage for those services is apparently not at risk.
If the court overrules the recommendations of the Preventive Services Task Force, health plan executives will face a difficult decision. Mark Rakowski, president of the nonprofit Corus Community Health Plan, said he strongly believes in the health value of preventive services and favors making them more affordable for enrollees by waiving deductibles and copays.
But if the mandate is partially lifted, he expects competitors to set up discounts and copays for preventive services to help lower their premiums by about 2%. Then, he said, he would be forced to do the same to keep his plans competitive in Wisconsin’s ACA marketplace. “I hate to admit that we have to strongly consider the following cases,” Rakowski said, adding that he can offer no-cost preventive coverage and other plans with higher premiums.
The ACA’s coverage rule for preventive services applies to individual plans in the individual and group markets, which cover more than 150 million Americans. It is a popular provision of the law, favored by 62% of Americans, according to a 2019 KFF survey.
Spending on ACA-mandated preventive services is relatively small but not insignificant. According to the Health Care Cost Institute, a nonprofit research group, that’s 2% to 3.5% of the total annual cost of private employer health plans, or about $100 to $200 per person.
Several large commercial insurers and health insurance trade groups did not respond to requests for comment or declined to comment on what payers would do if the court ends preventive services orders.
Experts fear that cost-sharing for preventive services will undermine growing efforts to reduce health disparities.
“If private plans and employers are left to make these decisions about cost sharing, black and brown communities benefiting from the removal of cost sharing will be disproportionately harmed,” said Dr. A. Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design, who helped draft the ACA’s preventive services coverage section.
One service of particular concern is pre-exposure prophylaxis for HIV, or PrEP, a highly effective drug regimen that prevents high-risk individuals from acquiring HIV. Plaintiffs in the Texas lawsuit claim that paying for PrEP forces them to subsidize “homosexual behavior” to which they have religious objections.
Starting in 2020, health plans are required to fully cover PrEP medication and associated lab tests and doctor visits that would otherwise cost thousands of dollars a year. According to the Centers for Disease Control and Prevention, of the 1.1 million people who could benefit from PrEP, 44% are black and 25% are Hispanic. Many are low income. Before the PrEP coverage rule went into effect, only 10% of eligible black and Hispanic individuals started PrEP treatment because of its high cost.
O’Connor, despite citing evidence that PrEP drugs reduce the transmission of HIV through sex by 99% and through injection drug use by 74%, feels that the government has not shown a compelling public interest in mandating free coverage of PrEP.
“We’re trying to make it easier to get PrEP, and there are already a lot of barriers,” said Carl Schmidt, executive director of the HIV + Hepatitis Policy Institute. “If first-dollar coverage goes away, people won’t take drugs. This would be extremely damaging to our efforts to end HIV and hepatitis.”
Robert York, an LGBT activist who lives in Arlington, Virginia, who is not related to Tom York, has taken a brand-name PrEP drug called Descovi for about six years. Paying cost-sharing for drugs and related tests every three months under her employer’s health plan will force her to change her personal expenses, she said. The retail price of the drug alone is about $2,000 a month.
But York, who is 54, stressed that reinstating cost-sharing for PrEP would hit low-income and marginalized people more.
“We’re working hard with the community to get PrEP into the hands of people who need it,” he said. “Why is anyone targeting it?”
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