On March 30, the US District Court for the Northern District of Texas issued a ruling in Braidwood Management v. Becerra, which struck down the Affordable Care Act (ACA) preventive services coverage mandate. Under the ACA, most commercial health plans are required to cover—with no cost-sharing—services recommended by the US Preventive Services Task Force (USPSTF) with a grade of A or B. The district court ruled the Department of Health and Human Services (HHS) can no longer enforce this requirement because the USPSTF’s member appointments do not meet the requirements of the Constitution’s appointments clause.

The Advisory Committee on Immunization Practices and Health Resources and Services Administration membership was not found to be in violation of the Appointments clause, making the ruling inapplicable to vaccines and contraceptives. This aspect of the ruling was confirmed in frequently asked questions released by the Department of Labor. However, if the scope of the ruling is expanded following appeal, vaccines and contraceptives could be implicated. The court also ruled that requiring employers to provide insurance that covers pre-exposure prophylaxis (PrEP) for HIV prevention violates the rights of employers under the Religious Freedom Restoration Act. This provision of the ruling applies only to the plaintiffs in the case.

Following the decision, the Biden administration appealed the court’s ruling to the US Court of Appeals for the Fifth Circuit, which may hear oral arguments this summer. The Department of Justice has requested a stay in the ruling as the decision is appealed. The court of appeals may uphold the nationwide injunction; grant a stay and allow HHS to enforce the preventive services mandate until a judgment in the appeal is issued; overturn the district court’s ruling; or, if the plaintiffs cross-appeal, expand the scope of the ruling to other products.

Braidwood v. Becerra affects a broad array of USPSTF-recommended preventive services, including PrEP, tobacco cessation therapy, and cancer, diabetes, and mental health screenings provided by self-funded plans and non-grandfathered individual and small group plans sold on and off the exchanges. The breadth of the ruling, both in the number of preventive services and covered lives affected, gives it the potential to reshape the preventive services coverage landscape. As such, all segments of the healthcare industry will need to consider stakeholder-specific implications and responses.

Impact on Patients

Following the ruling, a coalition of patient groups filed an amicus brief arguing that this ruling will worsen patient outcomes, lead to preventable deaths, and create higher long-term medical costs.  In the absence of federal law, regulation of preventive services coverage in these markets will be at the state level. This may create a patchwork of health coverage across states that could further exacerbate disparities among patients. Additionally, $0 cost-sharing increased access to and utilization of preventive services. The elimination of $0 cost-sharing will result in decreased utilization, particularly among lower-income patients.

Considerations for Providers

If patients are responsible for cost-sharing for USPSTF-recommended preventive services, fewer patients may seek or accept those services, reducing patient volume for providers administering those services. Additionally, patients who delay or avoid preventive care may present themselves to providers in worse health, potentially requiring more invasive and costly interventions for some individuals. This may exacerbate the trends observed during the onset of the COVID-19 pandemic, in which many patients missed preventive services. Additionally, provider administrative burdens may increase, as they will spend more time counseling on preventive care and determining cost-sharing in addition to delivering preventive services. Providers can focus on advocacy opportunities and legislative or regulatory changes to ensure coverage for patients.

Effects on Health Plans

In the absence of federal guidance, state-regulated health plans may come to rely on state regulations dictating preventive service coverage requirements. These differing requirements and guidance may create varying coverage across the country. While preventive service coverage has been shown to lead to long-term healthcare savings, some preventive services have high short-term costs that plans may reevaluate under the ruling.

The annual Notice of Benefits and Payment Parameters for plan year 2024 was finalized in April. If the ruling is upheld on appeal, interim federal guidance on required coverage of preventive services will be needed.

Implications for Manufacturers

As barriers to preventive care increase, fewer patients will likely receive preventive care, screenings, or other services that can lead to missed or late diagnoses that can be treated by drugs and medical devices manufactured by life sciences stakeholders. For example, manufacturers of devices used to detect colorectal cancer, breast cancer, and cervical cancer could be particularly at risk.  Manufacturers of PrEP will be particularly affected by the ruling and should consider whether patient support offerings will need to expand to accommodate patients unable to pay for their medication.

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