States Act to Ensure Coverage Protections in Advance of ACA Decision

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The majority of 2020 state legislative sessions are either approaching crossover deadlines or adjournment. In 2019 and 2020, at least 15 states (CT, DE, FL, HI, IN, LA, MD, ME, NH, NJ, NM, NV, OR, VT, and WA) have enacted laws to create or study coverage protections against pre-existing condition exclusions or coverage of all essential health benefits (EHB) provided for in the Affordable Care Act (ACA).

The Texas v. Azar litigation raised questions on the constitutionality of the ACA, given that Congress set the individual mandate penalty to $0. In January, the US House of Representatives and Democratic AGs filed motion asking the Supreme Court of the United States to review the 5th Circuit’s ruling. While the Supreme Court denied a motion to expedite the case in late January, it decided to review Texas v. Azar. Oral arguments in the case could be held as early as October 2020, but they are more likely to occur in late 2020 or early 2021—after the 2020 election. The Supreme Court will be required to issue a decision in the case by June 2021.

Following passage of the ACA, many states had taken steps to extend its protections to their insurance markets. However, states vary widely as to which protections they have codified in their laws. Importantly, how some states have codified these protections (e.g., by referencing federal law in state law) may be impacted if the ACA is ultimately invalidated.

Given the ongoing litigation, some states have recently sought to enact their own state-level protections that are specifically designed to guard against the possibility that the ACA is invalidated by Texas v. Azar. Protections focus on pre-existing condition exclusions, requirements for first dollar coverage of preventive services, and coverage for certain currently protected EHB, such as prescription drug coverage, and mental health and substance use disorder services.

State Action to Ensure Coverage Protections

Stakeholders remain concerned about the potential for coverage disruption due to potential invalidation of the federal law. While some of the ACA’s market reforms apply to self-insured employer-sponsored plans, any changes to state law will apply only to individual and group insurance in the state. Notably, under the ACA, EHB does not apply to self-insured employer-sponsored plans.

Lawmakers in several states have already introduced/approved legislation to maintain the ACA’s protection and coverage requirements. At least 15 states (CT, DE, FL, HI, IN, LA, MD, ME, NH, NJ, NM, NV, OR, VT, and WA) enacted laws implementing coverage protections for individuals with pre-existing conditions or requiring coverage of all or some EHB outlined in the ACA. The states of CA, MD, MN, NY, and RI are currently considering legislation that would similarly codify these protections, with many removing reference to the ACA. By defining these coverage requirements in statute and removing reference to the ACA, states could maintain the authority to regulate coverage of essential health benefits and other provisions provided for in the ACA, whether or not it is invalidated by the Supreme Court. These efforts parallel other legislative trends across the country intended to ensure access to and affordability of coverage, such as the public option efforts in CO and WA and individual mandate in CA. Notably, some of these enacted laws and bills under consideration are written such that the protections would only become effective if the ACA is invalidated.

As many state legislative sessions have only reached their midpoint, it is possible that additional states will introduce legislation on these issues. While the future of the ACA plays out in the Supreme Court and 2020 election, state action to shore up their laws could ultimately expand healthcare access across states.

ACA Protections Map

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