Appeals court weighs nationwide freeze of Obamacare’s coverage mandate

A federal appeals court panel appeared skeptical on Tuesday of calls to impose a nationwide freeze on Obamacare’s rules for no-cost coverage of preventive care while litigation continues — a move the Biden administration warned would threaten access to a range of services for millions of people on employer-sponsored insurance and Obamacare’s individual market.

Both sides in the case agreed that the individual Texas businesses that sued over the mandate should be shielded from it while the case makes its way through the courts. But they split on whether more harm would be caused by keeping the current coverage rules intact for everyone else in the country or by suspending them nationwide.

Attorneys representing the Texas employers and individual workers challenging the policy argued that because the United States Preventive Services Task Force is made up of outside experts who are not Senate-confirmed or overseen by Senate-confirmed government employees, their recommendations of what preventive services should be covered by insurance — from syphilis tests to depression screenings — must be “set aside” and can’t be enforced.

Their suit also claims the Obamacare requirement for insurance to cover the pre-exposure prophylaxis pill used to prevent transmission of HIV — known as PrEP — violates the religious rights of the challengers. In their legal briefs, they equated covering the highly effective medication with encouraging homosexuality and promiscuity.

The merits of those legal arguments didn’t come up in Tuesday’s hearing before the 5th U.S. Circuit Court of Appeals in New Orleans, which focused squarely on whether the nationwide freeze of the Obamacare mandate a lower court ordered in March went too far.

That ruling, Justice Department attorney Alisa Klein told the court, was a “legal error” that “extinguished the rights of about 150 million people who are not parties to the case.”

Klein urged the appeals court judges to consider the “balance of equities,” arguing that there would be no harm done to the already-protected plaintiffs by putting the nationwide injunction on hold, but great harm done to everyone else if they failed to do so.

“It can’t be overstated how important the guarantee of cost-free access is when patients go to get their mammograms and colonoscopies,” she said. “We’re talking about 50 different types of care.”

The attorney for the conservative challengers, Jonathan Mitchell, responded that the nationwide ruling was appropriate because “agency actions must be set aside if they are unlawful.”

Mitchell — the architect of the six-week abortion ban Texas imposed before Roe was overturned — attempted to reassure the judges that imposing a nationwide injunction wouldn’t cause harm because insurers are unlikely to drop coverage of preventive care services while the case is still in process.

The judges on the appeals court panel seemed unconvinced.

Leslie Southwick — an appointee of former President George W. Bush — called that assertion “speculative” and said it was “very unusual” to be asked to rule on “our sense of how insurance companies would react.”

“I’m not sure what we have to go on,” he said.

The judges also grilled Mitchell on whether a win for his side would solve his clients’ problem — a legal threshold known as “redressability.” When Mitchell argued that individual workers he represents who are refusing to buy insurance because of the PrEP coverage requirement would be able to get covered if the mandate were lifted, Judge Stephen Higginson noted that the workers’ own affidavits “don’t say that.”

Higginson — an appointee of former President Barack Obama — pointed out that only one of the four workers came anywhere close to making that claim, and that he expressed “a desire to buy insurance, not a specific intent.”

Mitchell acknowledged that there’s no “iron-clad guarantee” his clients would buy health insurance if courts blocked the Obamacare mandate.

In closing, the judges urged both him and the DOJ to try to broker a compromise that would more narrowly tailor the nationwide ruling without infringing on the rights of the plaintiffs.

Tuesday’s hearing was the latest in a months-long saga over the preventive care mandate that’s been in place for more than a decade.

Texas District Court Judge Reed O’Connor — the author of several rulings against pieces of Obamacare — issued a nationwide ruling in March for the challengers, striking down all of the decisions made by the United States Preventive Services Task Force since 2010 about what insurers must cover without cost sharing.

In May, the 5th Circuit Court issued an administrative stay of that lower court ruling — keeping the current coverage rules in place while the case proceeds.

Public health groups warn of serious consequences if O’Connor’s ruling is upheld — citing research showing that even small out-of-pocket costs deter many people from seeking preventive care, leading to sicker patients and more costly treatments. Medical experts are particularly worried that coverage rollbacks would exacerbate already record rates of sexually transmitted diseases by making testing and treatment services unaffordable for vulnerable populations.

Many major insurers have pledged to maintain preventive care at no cost to patients for the time being no matter what courts decide, but experts fear that patients could eventually be hit with out-of-pocket charges should the 5th Circuit and Supreme Court side with the challengers.

The case also throws more than two-dozen new recommendations the federal task force is currently weighing in jeopardy, rules that could expand coverage of everything from prenatal care to speech therapy to osteoporosis.