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States Taking Action to Ensure Coverage Protection Should the ACA Be Overturned

Summary

While the majority of state legislative sessions have adjourned for 2019, at least 11 states (CT, FL, LA, IN, MD, ME, NH, NM, NV, VT, and WA) have enacted laws to create or study coverage protections against pre-existing condition exclusions and coverage of all essential health benefits (EHB) provided for in the Affordable Care Act (ACA).

The ongoing Texas v. Azar litigation raises questions on the constitutionality of the ACA, given that Congress has now set the individual mandate penalty to $0. While the federal government had partially supported the ACA at the district court level, the Justice Department altered the administration’s position and now argues that the law should be declared unconstitutional. Oral arguments were held July 9.

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 recent federal regulations and legislation have promoted coverage flexibility, including alternative coverage that may not be available to all persons and may not cover all necessary services or drugs/devices, some states have sought to counter the potential impacts of those changes through state regulatory or statutory changes. However, it is important to note that 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 introduced legislation to maintain the ACA’s protection and coverage requirements. At least 11 states (CT, FL, LA, IN, MD, ME, NH, NM, NV, VT, and WA) enacted laws implementing coverage protections for individuals with pre-existing conditions and requiring coverage of all or some EHB outlined in the ACA. A bill in DE awaits action from the governor and state legislators in NJ, NY, and WI are considering legislation that would similarly codify these protections. While a similar bill was considered in IL, it was ultimately vetoed. These efforts parallel other legislative trends across the country intended to ensure access to and affordability of coverage, such as the public option in WA and individual mandate in CA. Notably, some of these enacted laws are written so that the protections would only become effective if the ACA is invalidated.

As most 2019 legislative sessions have adjourned, further action in other state legislatures may not occur until 2020. While the future of the ACA plays out in the courts and 2020 election, state action to shore up the law could ultimately widen healthcare access across states.

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