Employer-sponsored health insurance plans would no longer have to comply with a federal health nondiscrimination law following the Trump administration’s move to curtail Obamacare protections for LGBT people and those who have had or are seeking abortions.
The rule—which lets health-care workers, hospitals, and insurance companies that receive federal funding refuse to provide or cover any services to those people—has wider implications, impacting those with disabilities, living with HIV/AIDS, and others with extensive health needs or chronic conditions.
Section 1557 of the Affordable Care Act prohibits discrimination on the basis of race, color, national origin, sex, age, or disability by entities that primarily provide health care and receive federal funding.
The rule, released June 12, says that employer plans that don’t receive federal funding and aren’t principally engaged in providing health care “would not be covered entities.”
The change could enable insurance companies to design plans that make it more difficult for patients to get treatment for certain conditions, Matthew Cortland, a disability rights attorney and advocate, said. For example, insurers could move medications for migraines like Imitrex to a level of coverage that requires a higher co-payment, so that they don’t have to cover more expensive, newer medications like Aimovig.
Insurers could also require doctors and other health-care providers to submit a request for coverage of a medication before a patient can get it. Or they could request that patients try the least costly drugs first, and then cover more expensive drugs only after the first proves ineffective, Cortland said.
Those practices could target people with certain illnesses and try to force them out of an insurance plan, he said.
Legal Back and Forth
The majority of Americans, about 156 million people, get their insurance through their employers. Most employers rely on health insurance companies to process their claims and administer their plans as a third-party administrator, Cortland said.
However, the question of how it applies to insurers has been a conflict over the past four years.
The Obama administration issued a rule in 2016 that said those protections applied to employer-sponsored plans that relied on insurance companies receiving federal funds as a third-party administrator, Katie Keith, a health-care policy research professor at Georgetown University, said.
The 2016 rule was “clearly intended” to reach the third-party administrators of the employer-sponsored plans, Cortland said. However, the employer-sponsored plan insurance industry made clear it didn’t want the nondiscrimination law to apply to third-party administrators, and the 2020 rule reversed that.
The 2020 rule says that health insurers aren’t bound by the ACA’s nondiscrimination provisions because they don’t provide health care, and it doesn’t address comments in disagreement, Wayne Turner, a senior attorney at the National Health Law Program, said.
The policy change means that the only plans subject to Section 1557 are Medicare, Medicaid, and plans sold through the Affordable Care Act individual marketplace, Turner said.
Six legal and advocacy organizations have already said they plan to challenge the rule.
The 2016 rule was partially struck down by the U.S. District Court for the Northern District of Texas in October 2019, and was appealed to the U.S. Court of Appeals for the Fifth Circuit in January. That leaves the legality of both rules in limbo.