Challengers of a Trump administration final rule expanding market access to short-term limited duration health insurance may be facing an uphill battle with Judge Richard Leon of the U.S. District Court for the District of Columbia, who is skeptical of many of their arguments.
The judge was particularly wary of linking the short-term limited duration insurance (STLDI) rule to dips in enrollment in Affordable Care Act-complaint health insurance plan during a Tuesday hearing in the case.
Plaintiffs in the case include named plaintiff the Association for Community Affiliated Plans (ACAP), the National Alliance on Mental Illness, Mental Health America, the American Psychiatric Association, AIDS United, the National Partnership for Women & Families and Little Lobbyists. They sued the administration to invalidate the STLDI plan rule the government issued in August.
They argue, among other things, the plans are being marketed as primary coverage and are destabilizing insurance markets. They want the rule rescinded, claiming it's illegal.
Unlike ACA-compliant insurance, STLDI plans have low premiums but aren't required to offer comprehensive coverage or the ten essential health benefits. These types of plans are allowed to deny people coverage for pre-existing medical conditions and can impose lifetime and annual coverage limits.
The groups claim the Trump administration's 2018 final rule, which expanded access to short-term plans and allowed them to be extended for up to 36 months, undermines access to quality, affordable coverage and has significantly disrupted insurance markets in states across the country. In contrast, the government said the rule is clearly within the government's authority and doesn't contravene the ACA.
The plaintiffs submitted an affidavit from the ACAP showing member plans lost 100,000 subscribers since the rule went into effect in August. ACAP represents 62 safety net health plans, which provide health coverage to more than 21 million people in 29 states.
But Leon wasn't convinced.
By themselves, those numbers don’t prove cause and effect, Leon said. "Does ACAP break down its numbers by demographics and health?," the judge asked, noting the dip could be due to cost.
"Linking those numbers to the rule isn't necessarily established by the statistics they rely on," Leon said. "Wouldn't the court have to have evidence of a nexus between these numbers and the STLDI rule in order to grant the summary judgment motion?"
Justice Department lawyer Serena Orloff said the ACAP numbers reflect trends that predate the STLDI rule and any losses are probably linked to the end of ACA's individual mandate penalty and not the rule.
But the rule flouts Congress' intent, Mayer Brown's Charles Rothfeld argued. "People who would otherwise be covered by ACA insurance are instead getting short term duration plans as their primary form of insurance."
But Leon pointed out that short-term plans have been around since 1997, and for six years after the ACA's enactment. It was only the Obama administration's 2016 rule that restricted the operation of those plans, limiting short-term plans to no more than three months in duration (with no ability to extend coverage) and required such plans to display a prominent disclaimer they weren't compliant with the ACA's minimum essential coverage requirements.
"What's going on here is nothing more than a return to what had been the status quo before," Leon said.
The government's lawyer told the court the dispute was essentially one of policy not law. "At bottom here, they think it's bad insurance," Orloff said. "This is a quintessential policy dispute. If they want to seek relief from Congress, certainly they can do that."
But the judge couldn't promise a date by which he'd issue a ruling in the STLDI matter. "There’s a lot to chew on here," he said, adding he hoped to issue a ruling by summer.
Short-term insurance plans are not only facing a legal challenge, but they're also facing scrutiny from Congress.The plans, which opponents deride as "junk" insurance, are also the subject of a House Committee on Energy and Commerce probe. Critics of the plans argue consumers are often unaware the plans offer only bare-bones coverage.
Leon has another high-profile health care related case pending. He's presiding over the CVS-Aetna merger agreement, where he is reviewing whether the government's settlement in the case sufficiently protects consumers.
"I've got this CVS-Aetna thing," he said. "It's got pretty thorny issues and difficult questions in its own right."
Leon is set to decide whether the DOJ settlement with CVS over its acquisition of Aetna is in the public interest under the Tunney Act, which gives courts the power to review DOJ decisions. That battle in Leon's court room has continued even though CVS has already closed on its acquisition of Aetna.
Leon will convene a three-day hearing starting June 4 in which he will hear witness testimony from a total of six experts he picked from a pool of potential witnesses submitted by critics of the CVS-Aetna deal and DOJ.