National

A federal judge in Texas who struck down an Obamacare provision that requires employers to cover certain preventive services has repeatedly sought to undermine the landmark law.

The big picture: U.S. District Judge Reed O'Connor's ruling last month — which the Justice Department said Wednesday it will appeal — has far-reaching implications for millions of Americans' health plans.

The ruling could put millions of Americans on the hook financially for certain skin and lung cancer screenings, statins for heart disease, medications that prevent HIV and other services recommended by the U.S. Preventive Services Task Force, Axios' Adriel Bettelheim reports.

Last September, O'Connor ruled that Affordable Care Act's PrEP mandate violated the Religious Freedom Restoration Act, which is a law that "ensures that interests in religious freedom are protected."

What's happening: The Department of Justice on Wednesday told Axios' Oriana González that it will request a stay to block the Texas ruling.

"As we've said before, for over a decade, the Affordable Care Act has ensured that millions of Americans have access to critical preventative health care," the DOJ said.

"In order to protect Americans who have come to rely on the preventative health care measures at issue, the Department of Justice will request a stay in this case."

O'Connor is a native of Houston, Texas, and a graduate of the University of Houston and South Texas College of Law.

In 2007, he was nominated by former President George W. Bush to serve as a judge on the U.S. District Court for the Northern District of Texas.

O'Connor, who has contributed to the conservative Federalist Society, previously worked at a Texas-based private law practice, as an assistant district attorney for the Northern District of Texas and as a counsel to the Senate Judiciary Committee.

O'Connor has been a critic of the ACA and issued previous rulings targeting the health care law, including one in 2018 that declared the entire Affordable Care Act unconstitutional.

He ruled that the individual mandate requiring people to have health insurance "can no longer be sustained as an exercise of Congress's tax power." He said the entirety of the law was invalid because he viewed the individual mandate as unconstitutional.

The Supreme Court ultimately rejected O'Connor's argument and reversed his ruling.

Zoom out: In 2018, Josh Blackman, a law professor at South Texas College of Law in Houston, told the Dallas Morning News that O'Connor was often the go-to judge for Republicans for cases surrounding health care and transgender rights.

"Without question, Judge O’Connor has had a fairly high-profile docket, in that he gets a lot of these hot-button issues," Blackman said at the time.

O'Connor has targeted laws that guarantee or expand LGBTQ protections. In 2015, he blocked federal protections for same-sex couples in Texas under the Family and Medical Leave Act.

And in 2016, he issued an injunction temporarily blocking an Obama-era directive ordering public schools to allow transgender students to use bathrooms and locker rooms that match their gender identity.

The Texas judge in 2015 also struck down a U.S. ban on the interstate sales of handguns by federal firearms dealers. He said the law violated the Second Amendment and Fifth Amendment, per the Dallas Morning News.

The Biden administration's expected appeal will set off a legal process that could end up at the Supreme Court.

If a stay is granted, the ruling would be put on hold as appeals work their way through the court, Axios' Tina Reed reports.

Go deeper... Obamacare ruling gives Democrats new political ammo 

Obamacare ruling gives Democrats new political ammo

How a federal judge in Texas became an Obamacare boogeyman

Last month's ruling is not the first time the Texas judge has weighed in on a major ACA case. The DOJ said it will appeal.

A demonstrator holds a sign in front of the Supreme Court in 2020. Photo: Nicholas Kamm/AFP via Getty Images

Texas

Affordable Care Act

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Inflation and higher health spending helped drive monthly premiums for Affordable Care Act coverage up an average of 3.4% between 2022 and 2023, reversing a trend of recent declines, according to a new report from the Urban Institute and the Robert Wood Johnson Foundation.

Why it matters: Some of the increase was also attributed to uncertainty over whether Congress would extend or make permanent premium subsidies, which complicated insurers' decision making. Extending subsidies would incentivize healthy people who choose to buy coverage previously deemed unaffordable.

What they found: There were considerable regional variations, with consumers in smaller cities and rural areas having to pay the price.

The average silver plan benchmark premium increased from $438 to $453 in the last year for a 40-year-old nonsmoker.

Markets with a single insurer had premiums that were $128 more than in markets with five or more insurers.

States like West Virginia and Wyoming had the highest average benchmark premiums in 2023, at over $800.

The intrigue: More major commercial insurers, like UnitedHealth and Aetna, entered the marketplace in 2023, and Medicaid insurers were almost always offering the cheapest plans in each market.

More than 16 million Americans enrolled in marketplace plans in 2023.

Inflation will likely play a role in 2024 rates, said John Holahan, an Urban Institute fellow, since labor costs are not showing any signs of decreasing.

But in inflation-adjusted terms, premiums are still going down, with pressure most felt in competitive markets, he added.

Inflation helped drive ACA premiums up 3.4%

After four years of decline, ACA Marketplace plan premiums increased on average in 2023.

Illustration of red cross surrounded by concentric circles of dollar symbols.

Health care costs

President Biden's State of the Union address will include calls for insulin cost caps for privately insured patients and a renewed bid to close the Medicaid coverage gap in Republican-controlled states that haven't accepted the Affordable Care Act's Medicaid expansion.

The big picture: Neither proposal has much of a chance, but the speech gives Biden a chance to draw contrasts with Republicans and highlight policy successes in the Inflation Reduction Act, according to Larry Levitt, executive vice president of health policy at the Kaiser Family Foundation.

Between the lines: Biden will revive ideas that were rejected during negotiations over the IRA. The White House frames this as part of ongoing efforts to lower health care costs for working families and to "give more families the peace of mind of affordable prescriptions and health care."

Reality check: Many Americans have to ration insulin because of the cost. The IRA limited monthly out-of-pocket insulin costs to $35 for Medicare beneficiaries starting this year but didn't extend the cap to the private market. Many Republicans view such a move as interfering with the market.

The push to expand health coverage to millions of low-income people in 11 red states by closing the Medicaid coverage gap is costly and could trigger legal challenges. Supporters have cast it as a referendum on universal health coverage, as well as racial equity, noting that people of color make up the majority of those in the gap.

Biden also is expected to use the address to call for extending enhanced Affordable Care Act subsidies that his administration says lowered premiums by an average of $800 per person per year.

He'll tout the IRA's prescription drug provisions that allow Medicare to negotiate drug prices, and an FDA rule that allowed hearing aids to be sold over the counter.

The speech is also expected to reference the surprise billing law — the object of continued legal challenges from providers over the method for deciding who picks up the tab in disputes over out-of-network care.

Biden to push for expanded insulin caps, Medicaid coverage in SOTU

President Biden's State of the Union address will include calls for insulin cost caps for privately insured patients.

Photo: Andrew Caballero-Reynolds/AFP via Getty Images

White House

ACA sign-ups begin with millions likely to duck big premium hikes

Illustration of a red cross on a billboard with a "SALE" sticker.

Black and Latino Americans saw surges in enrollment in the federal government's health care marketplace between 2020 and 2022, according to a new report released by the Department of Health and Human Services.

Why it matters: Black and Latino communities have historically had higher uninsured rates despite facing greater risks of worse health outcomes.

Details: The report, which analyzed race and ethnicity for HealthCare.gov enrollment data from 2015 to 2022, found that all racial groups other than multiracial people experienced boosts in enrollment between 2020 and 2022.

American Indian and Alaska Native enrollees saw a 32% increase.

Asian American, Native Hawaiian and Pacific Islander enrollees saw a 6% increase.

What they're saying: "[E]nrollment growth of Black and Latino populations exceeded all other groups during this time period and grew by nearly 40 percent for both groups between 2021 and 2022, building on more modest gains that occurred between 2020 and 2021," the report states.

"It's the combined effort of more outreach and more affordable coverage that has led to a game changer here in these communities," Ben Sommers, one of the lead researchers, told Axios.

When the Affordable Care Act was first implemented, data indicated that Black and Hispanic populations were not enrolling at high rates, in part due to historical distrust of the federal government, according to Nadereh Pourat, the associate director of the UCLA Center for Health Policy Research.

"Sustainability always is important," Pourat added. "So these lessons about what kind of approach works, how you talk to people, what messages you should give, who should give the message ... They should be embedded into [the federal government's] routine" to ensure all communities benefit.

The report's findings also highlight the continuing need for more comprehensive data collection on race and ethnicity — which remains incomplete and inconsistent — to better address health inequities. 

The big picture: ACA enrollment underwent a boost in recent years in part because of COVID-driven job losses.

Worth noting: Because enrollees are not required to report their race, researchers used validated imputation techniques for missing data, which involved inputting values for missing race and ethnicity information based on an Improved First Name Surname Geocoding method that was developed by the nonprofit global policy think tank RAND Corporation.

The report did specify that the method has high overall predictive accuracy but is less predictive for American Indian, Alaska Native and multiracial individuals. 

HHS reports significant increase in Black, Latino ACA health care enrollment since 2020

Black and Latino communities have historically had higher uninsured rates despite facing greater risks of worse health outcomes.

Photo of Xavier Becerra speaking from a podium with the HHS seal behind him

U.S. Secretary of Health and Human Services Xavier Becerra speaks during a news conference on June 28, 2022 in Washington, D.C. Photo: Alex Wong via Getty Images

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

For the second election cycle in a row, a Republican-appointed federal judge in Texas has given Democrats an opening to campaign on saving the Affordable Care Act — an opportunity they relish.

Why it matters: Weaponizing the GOP's 2017 attempt to repeal and replace the ACA was hugely successful for Democrats in the 2018 midterms. Republicans have been eager to talk about anything but the ACA since then, but Judge Reed O'Connor has twice now issued decisions that put key tenets of the law at risk.

Driving the news: O'Connor yesterday ruled the federal government cannot require a Christian-owned company to cover HIV preventative medication because it violates their religious rights under federal law.

He also found that the ACA's requirement that insurers cover care recommended by the U.S. Preventive Services Task Force is unconstitutional, although he upheld the law's requirement about the recommendations of two other agencies.

"If today's ruling stands, colonoscopies, Pap smears, PrEP, and a broad range of preventive pregnancy-related services may no longer be covered w/o cost sharing," KFF's Alina Salganicoff tweeted.

Flashback: O'Connor is the same judge that sided with GOP state attorneys general in a case that argued the ACA is unconstitutional and should be struck down. 

The case went to the Supreme Court, which heard arguments in 2020 but ultimately upheld the law.

What they're saying: "This extreme MAGA ruling comes just months after the Republican-controlled Supreme Court discarded precedent and privacy in overturning Roe v. Wade," House Speaker Nancy Pelosi said in a statement hours after the decision was released.

"As extreme MAGA Republicans work to rip away life-saving drugs, Democrats are fiercely defending health freedom, protecting access to health care and lowering the cost of prescription drugs," she added.

Be smart: The Supreme Court's decision to overturn the federal right to abortion this summer arguably gave Democrats their most effective campaign message of the cycle, ahead of what was expected to be a red wave this fall.

If Pelosi's statement is any indication, the party will eagerly tie that decision to yesterday's and make November's election even more about health care. 

Between the lines: Democrats have been trying to make the case that Republicans support undoing popular health care policies — like their recently-passed prescription drug law that allows Medicare to negotiate directly with manufacturers — in addition to highlighting the party's support for abortion bans.

"Don't get it twisted: the GOP does have a health care agenda, and it includes cutting Social Security and Medicare and banning abortion with no exceptions for rape or incest," the DNC wrote in an email earlier this week.

But Democrats' case that the GOP will try again to repeal and replace the ACA or to repeal the drug law hasn't been particularly convincing, and has been based mostly on stray comments from not-particularly-relevant lawmakers. 

In reality, vulnerable Republicans have mostly been silent on health care.

What we're watching: O'Connor has yet to say how broadly the decision applies, and the preventive services requirements are still in place for now. He's asked both parties to submit proposals for the "scope of the relief," or the implementation of the decision.

And even if he ends up blocking the enforcement of those requirements, the decision will almost certainly get appealed. 

Democrats get another chance to campaign on health care

There's not much more that they'd rather do.

Illustration of a donkey with a gavel in its mouth

The Affordable Care Act is once again being challenged in federal court, this time with big implications for the private insurance market that dovetail with concerns about contraception access in the post-Roe world.

Why it matters: A pending federal case takes up whether part of the law requiring coverage of preventive services is unconstitutional. If the plaintiffs are successful, millions of people could lose access to free services like cancer screenings, immunizations and contraception.

Driving the news: The plaintiffs of Kelley v. Becerra and the federal government will each make their case this morning in a federal district court hearing before Judge Reed O'Connor.

If that name sounds familiar, it should. O'Connor is the same Texas judge who sided with the plaintiffs of the last major ACA court case, ruling that the law is unconstitutional and should be struck down.

That case ultimately went to the Supreme Court, where the justices last summer ruled 7-2 against the GOP plaintiffs.

What's at stake: The ACA requires most private insurers — not just those participating in the ACA marketplaces — to cover a set of preventive services without cost-sharing, a measure intended to get more enrollees to use them.

Specifically, the law outlines four categories of preventive care that must be covered, including recommendations and guidelines from the U.S. Preventive Services Task Force, the Advisory Committee on Immunization Practices and the Health Resources and Services Administration.

These recommendations include more than 100 services, per The Commonwealth Fund. 

What we're watching: If the plaintiffs ultimately win, the ACA's preventive services requirement would become voluntary, and insurers could either drop coverage of these services altogether or start charging enrollees for them. 

If O'Connor sides with the plaintiffs after today's hearing, a critical question will be whether the decision is effective immediately or put on hold during the appeal process. 

If O'Connor makes the ruling immediately effective and the 5th U.S. Circuit Court of Appeals or the Supreme Court doesn't put the decision on hold, there could be “draconian effects," Andrew Pincus, a visiting lecturer at Yale Law School, told reporters yesterday.

The case could ultimately follow the same trajectory as the last ACA lawsuit that O'Connor ruled on, and put the law's fate once again in the hands of SCOTUS.

Affordable Care Act lawsuit threatens contraception access

The case will be argued in a hearing today in federal court.

Illustration of a caduceus and question mark.

As Democrats enter a crucial week in their bid to pass a huge health care bill without Republican votes, they have yet to decide how to target hundreds of billions of dollars in spending — a call heavily dependent on politics and Senate rules.

Why it matters: The party seems willing to do whatever it takes to lower prescription drug prices and prevent massive Affordable Care Act premium hikes in the fall. What else — if anything — can be included in the package will depend on how much money they have available, and how much of that Sen. Joe Manchin is willing to spend.

The big picture: This is the closest that Democrats have come yet to allowing Medicare to negotiate drug prices, a goal the party has had for decades. 

But the reconciliation measure being considered has gone from a huge catch-all package of domestic policy priorities to a watered-down version of just the health care portions of last year's legislation, which is all Manchin has said he'll accept for now. 

For example, a plan that would have filled the coverage gap in states that didn't expand Medicaid isn't part of the deal.

Passing something now is obviously much better for Democrats than doing nothing before the midterm elections, and it's widely understood that no one wants to upset what is already a very delicate balance.

However, the coming days will likely reveal whether there's any wiggle room for some party priorities to be slipped in. 

State of play: The agreement Manchin has made with Senate Majority Leader Chuck Schumer is straightforward: He'll accept reconciliation legislation that includes prescription drug pricing reforms and extends the enhanced ACA subsidies for another two years, and that's it.

The prescription drug provisions, which were hashed out last year, could save the federal government hundreds of billions of dollars. Extending the subsidies will cost tens of billions. 

Manchin wants whatever money that isn't spent to go towards reducing the deficit — which means Democrats can't spend the prescription drug savings in all of the ways they had originally planned. 

What we're watching: The Senate parliamentarian is expected to rule this week on whether the legislation complies with reconciliation rules, and analysts say she could very well strike some major drug pricing components. 

Once a ruling is made, Democrats will know how much money they're working with. But they'll still need to figure out how much of that Manchin is willing to spend.

By the numbers: Extending the ACA subsidies for two years will cost around $34 billion, according to a Congressional Budget Office analysis released last week.

CBO said earlier this month that the prescription drug provisions, if they're all included, would save the federal government nearly $287.6 billion over 10 years. 

That means that Democrats could have to decide what to do with as much as $250 billion, depending on how much of the legislation survives the parliamentarian. 

Between the lines: There's no shortage of things Democrats would like to use that money for. 

At the top of the list is more COVID funding, which the White House has been saying it needs for months in order to buy more treatments, tests and vaccines. 

Some skeptics also question the wisdom of extending the ACA subsidies for only two years, which would have them expire right before the 2024 presidential election. There are murmurs about extending them for another year, which would cost an additional $23 billion, per CBO.

There's also a push to use some of the money to respond to Roe v. Wade being overturned. Last week, the GOP blocked Democratic legislation that would roughly double funding for Title X over the next decade, making this a measure to watch.

Exclusion of the original Medicaid coverage gap fix bodes especially bad for Sen. Raphael Warnock, whose seat is one of the most at-risk this fall.

The bottom line: Democrats want to pass a big health care bill before they leave town for most of August. No one knows yet exactly how big it will be. 

Democrats' high-stakes math game

Illustration of a donkey surrounded by mathematical formulas. 

Drug prices

Colorado is reviving an old progressive health care goal with a new twist, creating a public health insurance option that could be a model for other states trying to expand affordable coverage as they move past the pandemic.

Why it matters: Using flexibilities the Biden administration granted on Thursday, the state is trying to prove a government-run health plan can attract more consumers and save money while avoiding the political pitfalls associated with single-payer systems.

Driving the news: Colorado on Thursday became the first state to get a federal waiver to create a plan called the "Colorado Option" that will be offered on the state's Affordable Care Act exchange starting in 2023.

The plan would compete with private plans on the exchange with premiums that are on average 22.3% lower. 

That's projected to save the federal government $214 million in spending on premium tax credit subsidies next year.

Colorado would also expand a state subsidy program to lower costs for people who aren't eligible for ACA subsidies.

An estimated 32,000 residents could gain coverage through the option by 2027, when the waiver expires. 

The big picture: Washington state is the only state with a public option, but Nevada, Oregon and Connecticut are weighing whether to follow suit.

"We encourage all states to consider innovative ways to use section 1332 waivers in the future to expand and improve coverage and lower costs for their residents," CMS administrator Chiquita Brooks-LaSure said in a statement.

Yes, but: Washington's plan, which dates to 2019, has run into snags, including hospitals unwilling to voluntarily participate because of low payments and policies that tie reimbursements to Medicare rates. 

Private insurers have also balked at contracting with the state and participating in the plan, in part because hospitals were wary.

Washington officials are trying to fill coverage gaps in some underserved areas and set rates for next year to ensure every county in the state will have a public option plan.

Data from the Washington Health Benefit Exchange show that more Washington residents chose public option plans, called Cascade Care, in 2022 than in 2021.

In 2021, just 12% of people with plans on the exchange chose a Cascade Care plan, but in 2022, nearly a third of exchange plan customers chose a state-designed plan.

The intrigue: Colorado is trying to avoid some of the biggest problems that Washington encountered hit.

The biggest difference is insurers that offer ACA exchange plans in a county will also have to offer a Colorado Option for both individual and small-group coverage at the outset. 

"That means everyone essentially will have a Colorado Option which makes their presence more significant," Krutika Amin, associate director of the ACA program at the Kaiser Family Foundation, told Axios.

Colorado public options plans will also need to meet network adequacy requirements, to ensure there are enough providers.

Flashback: Centrist Democrats in Congress rejected putting a public option in the Affordable Care Act more than a decade ago.

The idea began to enjoy a revival before the pandemic, and Colorado Gov. Jared Polis signed legislation last year to set in motion his state's version of a government-run plan. 

President Biden touted a public option during his 2020 campaign, to build on the coverage gains of Obamacare.

What we're watching: The end of the COVID-19 public health emergency could alter prospects for state-based health plans, as thousands of people who have stayed on Medicaid plans throughout the pandemic might no longer qualify. 

It remains to be seen whether that population can find affordable coverage on state marketplaces.

States like Colorado are hoping to bridge that gap with subsidies for those at certain income levels who enroll in the Colorado Option.

The bottom line: Other states will be closely watching the experience in Colorado and Washington as the nation transitions away from the public health crisis and the uninsured population is expected to grow.

Colorado bets on a public option to grow health coverage

CMS approved Colorado's waiver to offer a 'Colorado option' state health plan, starting in 2023.

Illustration of a stethoscope in the shape of a Colorado flag

Health insurance marketplaces

Vitals

Axios Vitals

Medications that prevent HIV — along with the necessary doctor's visits and lab tests — are supposed to be fully covered by most insurance plans under the Affordable Care Act.

Patients and advocacy groups tell Axios they're often not.

Why it matters: Studies show HIV pre-exposure prophylaxis, often called PrEP, is more than 90% effective in preventing the transmission of HIV.

But the brand-name version of the daily pill costs upward of $20,000 a year, and billing problems that shift costs to patients lead many who would benefit to opt out, advocates say.

 "You hear stories all the time," Jeffrey Crowley, director of the Infectious Diseases Initiative at the O’Neill Institute and a former director of the White House Office of National AIDS Policy, told Axios.

"They've been on PrEP and then all of a sudden, there's a new obstacle," he said. "They need to get prior authorization or they used to get their meds for 90 days and now they can only get them for 30 days. All of these hassle factors cause people to fall off."

Or as in the case of patients like Cambridge, Massachusetts resident Michael Brazile, they get fully covered PrEP treatments — along with a surprise bill for lab services required to obtain the drug.

A quick primer: The FDA in 2012 made Gilead's Truvada the first approved drug for HIV prevention in uninfected adults. There's now a generic version, plus another form of PrEP known as Descovy.

Since they are intended for those who are HIV-negative but at high risk of acquiring the virus, lab testing is a prerequisite, usually in person. 

In 2019, the U.S. Preventative Services Taskforce recommended PrEP as an effective method of preventing HIV, meaning health plans had to make it available at no cost to patients under the Affordable Care Act starting in January 2021. 

What's happening: Even so, patients are often hit with bills for the drug itself, for office visits, or lab work. 

Anthony Cantu, 31, who works in a health clinic in San Antonio where he counsels patients about PrEP, started the drug himself last summer. He got billed $374 for lab services connected with PrEP in October 2021 by Blue Cross Blue Shield of Texas. It was the first of several bills. 

After months of appeals and filing a complaint with the Texas Department of Insurance, his case was resolved. That is, until he recently got another bill for $187 for PrEP-related lab services. 

In a statement, the insurer said it "is committed to providing its members with equitable health care, including access to PrEP medication and clinical support related to PrEP," but did not specifically address concerns about instances where it wasn't covered

As Axios reported earlier this year,  Peter Sacco, 28, of Washington, D.C., was billed for copays for clinic visits and lab work associated with monitoring his health for a generic Truvada prescription and had difficulties appealing.

By the numbers: There isn't good data about how often this happens, Carl Schmid, executive director at HIV + Hepatitis Policy Institute, told Axios. 

But "I'm helping six people right now and we have to go to insurance commissioners every time?" Schmid said. "There really is a problem. With the ACA it's supposed to be seamless and that's not what's happening."

More federal enforcement and penalties for non-compliance are needed to make a meaningful change rather than state-by-state complaints, Schmid said. 

The other side: Insurers say the problem often is physicians aren't properly coding their visits as preventative, but when that happens it can be fixed on the backend, said AHIP Spokeswoman Kristine Grow.

Some plans are engaged in education campaigns with providers to appropriately submit claims, Grow said. And "health insurance providers are engaging with patients and their providers who have questions or concerns when they receive an unexpected bill and are working swiftly to address them," she said. 

HIV PrEP is supposed to be covered, but often isn't

HIV prevention still comes with unexpected costs

All Affordable Care Act stories