“Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link.
Trump DC Circuit judge Greg Katsas cast the deciding vote to uphold a federal rule, which was promulgated at the express direction of President Trump, that substantially expands the ability of health insurance companies to sell policies that cover only healthy individuals and offer none of the protections of the Affordable Care Act (ACA), seriously undercutting the ACA. The July 2020 decision was Association for Community Affiliated Plans v. United States Department of the Treasury.
Since 1996, insurance companies have sold short term limited duration insurance (STLDI) plans that are exempt from federal rules governing health insurance and have been intended primarily to fill gaps in coverage when a person makes a transition like changing jobs. Originally, the plans had an initial term of less than one year. To prevent allowing such plans to undermine the ACA by selling them only to healthy people and without any ACA protections and requirements, the government in 2016 capped the length of such plans at three months.
After President Trump’s election and his failure to convince Congress to repeal the ACA, he issued an executive order in October 2017 directing that the length of STLDI plans be expanded as an “alternative” to the ACA. The Department of the Treasury and other agencies complied and issued a new rule that allows the sale of STLDI plans that last up to three years without complying with any of the ACA’s requirements.
An association of community health plans challenged the new rule, which was upheld by a district court. On appeal, in a 2-1 decision by Judge Thomas Griffith in which Katsas cast the deciding vote, the court of appeals affirmed the lower court.
In his opinion, Griffith acknowledged the “prudential” objections to STLDI plans because they “aren’t good for consumers.” But he maintained that there were no statutory limits on how long STLDI plans could last and that the agencies had thus “acted within the bounds of their statutorily delegated authority” so the judgment was “theirs to make.” Griffith noted that according to government estimates, some 600,000 people would sign up for STLDI plans in 2019, including many who would drop out of ACA- compliant plans to do so, and that this number could increase to 1.5 million by 2028, a smaller impact than projected by the Congressional Budget Office.
Judge Judith Rogers strongly dissented. She explained that because STLDI plans are exempt from the ACA, insurers selling them can deny “basic benefits”, commit price discrimination “based on age and health status,” and even refuse coverage “to older individuals and those with preexisting conditions.” As a result, she went on, they leave people “without benefits that Congress deemed essential” and draw “young, healthy individuals” out of the broad risk pool that “Congress deemed critical to the success” of the ACA. The rule thus “flies in the face” of Congress’ plan by creating “an alternative market for primary health insurance that is exempt from the ACA’s comprehensive coverage and fair access requirements” and improperly conflicts with the ACA’s operation.
The plaintiffs in the case have already stated that they will seek rehearing of the case by the full DC Circuit. But until and unless that happens and the rule is invalidated, the result of Katsas’ vote is to seriously undermine the ACA.