The Skinny on Skimpy Health Plans: Judge Says ‘No’

Trump administration fails in attempt to allow plans to bypass ACA essential benefits.

Judge John Bates of the U.S. District Court for the District of Columbia yesterday struck down a rule that he said “is clearly an end-run around the ACA.” That rule, by the U.S. Department of Labor (DOL), enables millions of Americans to buy skimpy health insurance plans that do not have to cover what the ACA considers 10 essential benefits.

Those benefits are:

  • maternity and newborn services
  • ambulatory patient services
  • emergency services
  • hospitalization
  • mental health and substance use disorder services, including behavioral health treatment
  • prescription drugs
  • rehabilitative and habilitative services and devices
  • laboratory services
  • preventive and wellness services and chronic disease management
  • pediatric services, including oral and vision care

Reuters reports that “health providers, insurers and medical groups had warned that skimpy plans could drive up premiums and make insurance unaffordable for some people by siphoning off healthy consumers who want cheaper coverage, leaving behind a sicker patient pool with higher medical costs in Obamacare plans.”

The ruling comes in the wake of the Trump administration’s all-out attempt to kill the ACA. On Monday, the Department of Justice (DOJ) filed a notice to the U.S. Court of Appeals for the Fifth Circuit arguing that the entire ACA should be eliminated.

In the case being appealed, Texas v. Azar, Federal Judge Reed O’Connor of the Northern District of Texas had ruled that the ACA is unconstitutional because the individual insurance mandate penalty was no longer in effect.

The notice is a reversal of the Trump administration’s stance up until then when the DOJ had argued just the opposite: that the repeal of the individual mandate doesn’t make the rest of the law unconstitutional, including such popular items as guaranteed issue.

Bates ruled yesterday that the DOL’s rule “relies on a tortured reading of the ACA’s statutory text that undermines the market structure that Congress so carefully crafted. DOL’s regulatory interpretation sows discord among the [rule], ERISA, and the ACA, which serves as further evidence that the [rule] unreasonably interprets ERISA and fails to carry out congressional intent.”