How Federal Judge’s Ruling on Obamacare Could Change Health Insurance

On Thursday, a federal judge in Texas struck down a crucial Affordable Care Act policy: the mandate that private health insurers fully cover preventive care services at no cost to patients.

The ruling took effect immediately and applies nationwide. It affects dozens of potentially lifesaving preventive health care services that the federal government recommends, including drugs that prevent H.I.V. transmission and screenings for adolescent depression.

Health policy experts describe free preventive care as one of Obamacare’s most transformative policies because it took away a financial barrier to needed care for tens of millions of Americans. It is also one of the law’s more popular provisions, with 62 percent of the public recently saying it is “very important” that it stay in place.

The new court ruling has already brought the Affordable Care Act back into the political fray, as Democrats quickly vowed to protect the law. The Biden administration plans to appeal the ruling, setting up the possibility of yet another presidential election cycle with a potential Supreme Court challenge to Obamacare looming.

For now, even though the ruling has wide reach, most people aren’t likely to see their health benefits change overnight. Here is what consumers need to know about how the ruling could change health insurance in the United States.

What did the judge find?

The Affordable Care Act relies on three panels of health care experts to advise the government on what preventive services insurers must cover.

Judge Reed O’Connor of the Federal District Court for the Northern District of Texas ruled that one of those panels, the United States Preventive Services Task Force, did not have constitutional authority to dictate what benefits health insurers must cover.

Judge O’Connor had ruled in 2018 that the entire Affordable Care Act was unconstitutional, but the Supreme Court later overturned that decision and upheld the law. In this new case, Judge O’Connor found that having a panel of outside experts determine which preventive services should be covered violated the Constitution’s appointments clause, which says that legally significant decisions must be made by people who are part of a chain of authority up to the federal government.

“The argument is that this is a body of private experts who serve in a volunteer capacity, who are not federal officers and are not properly appointed,” said Nicholas Bagley, a professor of law at the University of Michigan who has followed the Texas case closely.

Who is affected by the ruling?

The Affordable Care Act’s preventive services mandate potentially affects all Americans with private health coverage, not just those who get insurance through the Obamacare marketplaces.

That is roughly 150 million people, most of whom get their health benefits through their jobs. The ruling does not appear to affect people with public insurance such as Medicare or Medicaid.

What health benefits are at stake?

The Texas ruling means that insurers no longer have to provide free coverage for any care the United States Preventive Services Task Force has recommended since 2010.

In that time, the federal task force has endorsed at least four new types of preventive care. This includes three new type of screenings: one for anxiety in children, another for unhealthy drug use and a third for weight gain in pregnant women. It also includes a recommendation for PrEP, a daily pill that is highly effective at preventing the transmission of H.I.V.

The task force has also updated much of its older guidance. For example, it has repeatedly updated its recommendations on heart disease to endorse the use of statins in certain adult populations. Under the Texas ruling, insurers would not have to follow the newer guidance and could instead provide free coverage for whatever recommendations were made in 2009 or earlier.

The ruling does not affect all preventive care. Insurers are still required to cover all types of birth control, for example, and all recommended vaccines (including the Covid-19 vaccine) at no cost to patients. They are also still required to cover mammograms, pap smears and other common screenings the task force had recommended before 2010, but they will not have to follow any of its newer guidance on when those tests are appropriate.

Will health insurance plans change immediately?

Since the ruling took effect immediately and applies nationwide, health insurers could legally start applying co-payments and deductibles to the newer types of preventive health care. But health policy experts and insurance plans say they do not expect many consumers to experience an immediate change to their benefits.

That is because health plans typically have policies that span a full year, and it is unusual for them to change member benefits in the middle of a contract, especially when the court case is still ongoing. Insurers may be reluctant to immediately take away a popular benefit that, in some cases, saves them money by preventing serious disease later on.

Matt Eyles, the president of AHIP, the trade group representing health insurers, said in a statement on Thursday that “there will be no immediate disruption in care or coverage.”

The Biden administration plans to appeal the decision, according to a court filing made Friday afternoon. Experts also expect the federal government to pursue a stay of the ruling while the appeals process plays out, although the White House has not yet commented on when it will do so.

Democrats have recently found political success in defending the Affordable Care Act, particularly since Republican efforts to repeal the law in 2017 failed. Obamacare has steadily become more popular, and this new lawsuit could make it a more prominent issue in the 2024 presidential campaign.