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Analysis

Let's Unpack Last Week's 3 Major Developments in Health Policy Lawsuits

By Steven Porter  
   April 01, 2019

Judges have repeatedly blocked the Trump administration's efforts to bypass the ACA, as the DOJ declares all-out war on the sprawling Obama-era law.

As anyone who closely watches the interplay between federal court cases and healthcare policy will tell you, last week was noteworthy, to say the least.

As if the Trump administration switching its position in the high-stakes dispute over the Affordable Care Act weren't significant enough for one week, two federal judges chimed in with headline-grabbing actions of their own, each blocking policies the administration has advanced with much fanfare.

All three cases in which these three major developments took place are subject to further appeals, so it could be a long while before we know precisely how they shake out. But last week's developments, taken together, offer some clues about where we're headed and what to expect next.

1. Trump Asks Court to Wipe ACA Slate Clean.
 

The U.S. Department of Justice had argued in court proceedings last fall that most of the ACA should remain intact, even if its individual mandate were to be struck down. But the DOJ signaled in a filing at the appellate level last Monday evening that its position has shifted.

Rather than continuing to argue that only three ACA provisions—i.e., its individual mandate, community-rating, and guaranteed-issue provisions—should be struck down, the DOJ will now argue that the entire law should fall. That would have far-reaching consequences, even undermining some of Trump's own healthcare policy agenda.

The DOJ's shift, which was criticized by hospital groups and others, was advanced by the White House over objections from Health and Human Services Secretary Alex Azar and Attorney General William Barr, according to reporting by Politico's Eliana Johnson and Burgess Everett. Azar had reportedly noted that Republicans lack an ACA replacement.

In other words: As judges in the Fifth Circuit review a lower court's decision, the Trump administration has asked the judiciary for a clean repeal of the massive Obama-era law, so Republicans can start from scratch with their own healthcare legislation—after a similar feat failed on Capitol Hill.

In a letter to Barr on Monday, Sen. Susan Collins, R-Maine, urged the White House to reconsider its new position. "The Administration should not attempt to use the courts to bypass Congress," Collins wrote.

Democrats responded to the shift last week by introducing legislation to bolster the ACA and undo certain healthcare policy actions taken by the Trump administration, as Health Affairs' Katie Keith explained.

The case is widely expected to be decided by the Supreme Court.

2. Medicaid Work Requirements Blocked—Again.
 

Nine months after he blocked Medicaid work requirements from taking effect in Kentucky, U.S. District Judge James Boasberg issued twin opinions Wednesday blocking such requirements a second time in Kentucky and a first time in Arkansas.

While the administration has argued work requirements help to improve Medicaid beneficiaries' lives, Boasberg ruled that the HHS secretary had been advancing objectives not found in the Medicaid Act and failing to thoroughly consider how such requirements would affect coverage. Even so, proponents of the requirements say they are undeterred.

Sally C. Pipes, president and CEO of the Pacific Research Institute, says she expects Boasberg's decision to be appealed and ultimately decided by the Supreme Court.

"With the makeup of the court now, I would think they would tend more to support the idea of Medicaid work requirements," Pipes tells HealthLeaders, arguing that states can justify Medicaid work requirements because they have a responsibility to keep their spending under control while prioritizing coverage for those in greatest need.

Related: 3 Dos and Don'ts for Hospitals in States With Medicaid Work Requirements

"I don't think it's about booting people off Medicaid at all. I think it's about having Medicaid there, under the expansion and the old program, there for the people who need it," Pipes says. "Why should the federal and state governments be supporting people that actually could go out and work and contribute to the economy?"

Other than Kentucky and Arkansas, there were six states for which the Trump administration had approved waivers to allow work requirements for certain Medicaid beneficiaries: New Hampshire, Ohio, Indiana, Arizona, Michigan, and Wisconsin. Then the administration approved a waiver for Utah on Friday as part of a partial Medicaid expansion in that state, as Politico's Rachana Pradhan reported. (Many of the work requirements apply only to certain beneficiaries who gained coverage through Medicaid expansion under the ACA, but some states' requirements apply to traditional Medicaid beneficiaries as well.)

Pipes says these states with approvals in-hand "are not going to be cowed" by Boasberg's decision. But there's a similar lawsuit challenging New Hampshire's Medicaid work requirements, also in Boasberg's court. And officials in Ohio say they're assessing last week's decision to see whether it affects their plans moving forward.

3. Judge Blocks Association Health Plans Rule.
 

U.S. District Judge John D. Bates blocked the Trump administration's final rule on Association Health Plans (AHP) on Thursday, saying the policy had been devised to bypass the ACA's market requirements.

Bates ruled that the U.S. Department of Labor had unreasonably stretched the definition of "employer" and ignored the language and purpose of both the ACA and the Employee Retirement Income Security Act (ERISA). He vacated key provisions of the final rule and sent the rest back to DOL for further consideration.

This is far from the first time the Trump administration has been accused of devising healthcare policies that seek to offer more ways around the ACA's requirements. In addition to AHPs, the administration has expanded access to short-term limited-duration plans that are not required to abide by the ACA's consumer protections.

Centers for Medicare & Medicaid Services Administrator Seema Verma invited states last fall to sidestep provisions of the ACA with more flexible Section 1332 waiver concepts. Those waivers could be used to subsidize short-term coverage, which has ACA proponents concerned.

A separate lawsuit challenging the short-term plans is pending before U.S. District Judge Richard Leon.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

Trump administration officials have advanced policies designed to ease the burden of ACA compliance. Critics say they're undermining a law they dislike.

Two federal judges ruled last week that two of the Trump administration's healthcare policies have run afoul of the law.

Trump's DOJ now says it agrees with another federal judge's ruling invalidating the ACA in its entirety.


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