How a major health insurance ruling could affect Colorado

A federal judge in Texas threw health insurance for more than 100 million Americans into disarray last week when he ruled that certain preventive coverage requirements were unconstitutional.

That decision — if it survives pending appeals — could reverberate in Colorado, but its impact here is likely to be more muted than elsewhere in the country. That’s because Colorado lawmakers have written many of the same coverage requirements into state law, where at least most of the judge’s ruling won’t apply.

Depending on how they get insurance, however, potentially over a million people in Colorado could see an impact on the services they currently receive at no additional cost.

There’s a lot to untangle here, so let’s get into the details.

What did the Texas judge do now?

Last week, Federal District Court Judge Reid O’Connor issued a very technical ruling regarding federal preventive coverage requirements. The Affordable Care Act, also known as Obamacare, requires health insurers to cover preventive services at no additional cost to patients—i.e. you don’t have to pay a deductible or copay for them.

To decide which services meet this requirement, the federal government looks to several expert groups, including one called the US Preventive Services Task Force, which makes recommendations about important preventive services.

A number of employers sued, saying they didn’t want to pay extra for insurance that covered things they didn’t want, which is how the matter came before O’Connor. The judge ruled that because he believed USPSTF experts were not properly appointed to this policy-making role, it was unconstitutional for federal law to rely on their recommendations to determine the preventive services insurers must cover.

But O’Connor also ruled out is it is constitutional to rely on decisions made by other groups—including the Advisory Committee on Immunization Practices, which makes recommendations on vaccines, and another that makes recommendations on women’s and children’s health.

(To be clear, O’Connor is a different federal judge than the Texas judge whose upcoming ruling on a widely used drug could throw reproductive health nationwide into disarray.)

Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, a nonpartisan health care think tank, said preventive services are among the most popular and least controversial provisions of the Affordable Care Act. And he said O’Connor’s decision was based largely on an error in the wording of the federal law. However, since everything related to the Affordable Care Act is contentious in Congress, he is not optimistic about a legislative solution.

“It doesn’t take a lot of words to fix this in legislation,” he said, “but it potentially requires very difficult policy.”

What preventive services are we talking about?

The Affordable Care Act, relying on expert recommendations, now requires dozens of preventive services to be covered at no additional cost. And even after O’Connor’s decision, many of them will still be needed.

Some of them were recommended by groups that O’Connor accepted. And in another wrinkle, O’Connor’s decision invalidating the USPSTF recommendations only applies to recommendations made after 2010.

In this Jan. 29, 2015 file photo, pediatrician Charles Goodman vaccinates 1-year-old Cameron Fierro with the measles-mumps-rubella vaccine, or MMR vaccine, at his practice in Northridge, California. (AP Photo/Damian Dovarganes)

That means many preventive services — things like baby and maternal health exams, vaccinations, mammograms and colorectal cancer screenings — will still be covered at no extra cost. But newer recommendations, such as screenings for lung cancer or cholesterol-lowering drugs like statins, won’t be.

Cynthia Cox, director of the Kaiser Family Foundation’s ACA Program, said about 100 million people use ACA-required preventive services each year. But she said many of the most popular services will remain covered at no additional cost to patients.

“I think the ones that will be lost will be relatively less used than the ones that stay,” she said.

The decision also does not mean that these more recently recommended services will no longer be covered by insurance at all. And employers and insurance companies may choose to continue to offer plans where these services are covered at no additional cost. But that means some people may end up paying extra for them.

How does this affect Colorado?

The O’Connor decision is statewide, but only applies to federal law. However, Colorado lawmakers have written the ACA’s protections and requirements into state law for years.

So, Colorado law now says that insurers must cover the total cost of services recommended by the USPSTF. Colorado is one of 15 states nationwide with such a provision in state law.

Colorado Insurance Commissioner Michael Conway said his office will continue to use all the tools at its disposal to insist that insurers cover recommended preventive health care at no extra cost.

“This decision puts very important health services for the entire country at risk,” Conway said. “Obviously, we think this is a step in the wrong direction.”

Michael Conway speaks with Colorado Gov. Jared Polis at Red Rocks Community College on Thursday, Dec. 12, 2019, about a stop on his listening tour. (Jesse Paul, The Colorado Sun)

But there is a catch here. State law’s power to regulate health insurance only goes so far. Applies to insurance plans sold in the individual, small group and large group markets. They are all plans purchased from an insurance company where the insurer bears the risk.

Many large employers prefer to self-fund their plans, meaning they pay their employees’ medical claims themselves. These plans are authorized by federal law and are beyond the purview of state regulatory authority.

The Department of Insurance estimates that approximately one-third of Coloradans who have some form of health coverage are covered by self-funded employer plans. That applies to more than 1 million people whose coverage in Colorado could be affected by O’Connor’s decision.

For this reason, some experts, such as Levitt of the Kaiser Family Foundation, believe that state legal protections will not be enough to soften the blow.

“There are real limits to what states can do here,” he said. “I think states can and will take action to fill some of the gaps that this decision leaves. But there are still big gaps.”

Self-funded employer plans often use insurance companies to administer them, so people may not even realize it’s their coverage. The Department of Insurance says to check your health insurance card to be sure. If you see “CO-DOI” written anywhere on it, you are covered by a plan regulated by the department and subject to the protections of state law.

Conway, the insurance commissioner, said he is optimistic that employers who self-fund their health insurance plans will choose to continue to have full coverage of preventive services.

“It’s a source of competition for talent,” Conway said of health insurance benefits. “So removing something that these employees have come to rely on and expect for the better part of a decade is probably going to be a step too far.”

What does this mean for HIV prevention?

Among the services affected by O’Connor’s ruling are HIV prevention drugs called pre-exposure prophylaxis, or PreP. These fall into the category of preventive services recommended after 2010 by the USPSTF.

But O’Connor also dealt a blow to HIV prevention in another way: He found that requiring plaintiffs to provide insurance that covers PreP was a violation of religious freedom.

Truvada for PrEP, an antiretroviral HIV drug taken by HIV-negative people in at-risk communities. (Tony Webser, via Creative Commons)

Colorado law requires full coverage for PreP. (Again, self-funded employer plans in Colorado are exempt from this requirement.)

But O’Connor’s religious freedom ruling — while not currently binding in Colorado — could open up Colorado’s law to legal challenges in the same way, especially if the ruling is ultimately upheld by the U.S. Supreme Court.

If patients have to start paying for PreP themselves, it can quickly become expensive. Lindsay Dawson, the Kaiser Family Foundation’s director of LGBTQ health policy, said generic PreP pills cost several hundred dollars a year. But brand-name drugs can run up to $20,000 a year. And that doesn’t include the associated costs of clinic visits and lab tests.

“We can expect that when we lose a prevention modality in the HIV prevention toolkit, we will see new infections as a result,” Dawson said.

What next?

The impact of O’Connor’s decision is not likely to be felt immediately.

On the one hand, the insurance contracts for 2023 are already locked. So the earliest impacts can be seen here will be in 2024.

There is also the matter of appeals. Both sides are likely to appeal, with the federal government overturning the decision on the USPSTF’s recommendations and the plaintiffs seeking to invalidate even more preventive health care requirements.

Those appeals could put O’Connor’s decision on hold while it moves through the courts. But that also means the end result can be even more dramatic.

Said Lori Sobel, the Kaiser Family Foundation’s associate director of women’s health policy: “All the preventive services are kind of done as we go through the appeals process.”

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