New Rule Modifies Some ACA Protections

Although the United States spends more on healthcare than other high-income countries, it has the lowest life expectancy and highest suicide rate.[1] No doubt, the quest to improve healthcare has been a hot topic in recent years. President Obama, in one of his signature pieces of legislation, signed The Patient Protection and Affordable Care Act (ACA) into law into 2010. This sweeping new law sought to improve the healthcare system. It provided for government subsidies for health insurance, expanded the federal Medicaid program, and instituted protections for certain groups of Americans. This latter change has been in the courts recently, as the current Administration seeks to reverse or limit these protections.

Before the ACA was passed, it was perfectly legal for an insurance company to deny someone coverage, charge someone more for insurance coverage, or delay access to care simply because they had a certain characteristic. The ACA put a stop to this practice and mandated that insurance companies could no longer discriminate on the basis of race, color, national origin, sex, age, or disability in health programs that received federal financial assistance. Discrimination against those with limited English proficiency (LEP) was also prohibited.

Why did the government feel the need to step in and protect these classes of folks? Racial and ethnic minorities made up 23% of older adults in 2016; this number is expected to rise to 28% by 2030. [2] Research shows that there are differences in the kind and quality of care received by different racial groups.[3] Nearly 3 million folks over age 50 identify as lesbian, gay, bisexual, transgender, queer, plus (LGBTQ+).[4] A recent study found that the rate of suicide amount LGBTQ+ individuals decreased by as much as 50% in states that prohibited gender identity discrimination by private health insurance companies.[5] Patients who have LEP experience higher rates of medical errors, resulting in worse clinical outcomes than those patients who are English proficient. [6]

In 2016, the Department of Health and Human Services (HHS) completed a three-year study and issued a final rule that implemented Section 1157 of the ACA. That section prohibited discrimination on the basis of race, color, national origin, sex, age, or disability. Women could not be treated differently than men in the healthcare they received. For disabled folks, the rule ensured that all programs and activities be provided in an accessible format, buildings were physically accessible, and non-discrimination practices were in place. This 2016 rule also clarified the obligations of health care providers with respect to transgender and LEP patients. At the time, HHS proffered "that a fundamental purpose of the ACA is to ensure that health services are available broadly on a nondiscriminatory basis to individuals throughout the country," and that "[e]qual access for all individuals without discrimination is essential to achieving this goal." This 2016 rule applied to any health program or activity that received federal funding, any health program that HHS administered, and health insurance companies and marketplaces.

Now, the Centers for Medicare & Medicaid Services (CMS) and HHS have issued a new final rule that may undermine some protections for these protected classes under the ACA. Here are a few of the changes, as outlined in the new 2020 final rule:

  1. The ACA rule defined discrimination "on the basis of sex" to encompass discrimination on the basis of gender identity. The new 2020 rule removes that assumption and lets states decide whether gender identity is included in the definition of "sex," in accordance with the plain meaning of federal statutes. In essence, the new rule removes protections for transgender patients.
  2. The new 2020 rule also limits whom the ACA non-discrimination provisions apply to. A covered entity must comply with the ACA and new rule. However, the new rule limits the scope of what entities are considered covered. A covered entity is one that is "principally engaged in the business of providing healthcare." The new rule confirms that this does not include health insurance companies. This means that private health insurance companies can discriminate against patients and not be in violation of the law.
  3. Covered entities must "take reasonable steps to provide meaningful access to each individual with limited English proficiency." Under the 2016 rule, covered entities must notify patients of certain information, including information regarding the entity's non-discrimination policies, the entity's requirement to provide interpreters to those who have LEP, and how to file a complaint that alleged a violation of the law. The new 2020 rule removed these requirements; a covered entity must no longer notify patients with LEP of these things.
  4. The new 2020 rule eliminated the requirement that a covered entity with 15 or more employees must have a compliance coordinator and a grievance process to address complaints about violations of the law.

Of the new rule, CMS and HHS state that it "will better comply with the mandates of Congress, address legal concerns, relieve billions of dollars in undue regulatory burdens, further substantive compliance, reduce confusion, and clarify the scope of Section 1557 in keeping with pre-existing civil rights statutes and regulations prohibiting discrimination based on race, color, national origin, sex, age, and disability."[7]

The new rule was supposed to become effective on August 18, 2020. However, litigation has ensued. A coalition of LGBTQ+ organizations filed suit a few weeks after the final rule was published.[8] One of the advocates, Lambda Legal, stated "The proposed rule would carve-out LGBTQ people from the Affordable Care Act's non-discrimination protections, and invite health care workers, doctors, hospitals, and health insurance companies that receive federal funding to refuse to provide or cover health care services critical to the health and wellbeing of LGBTQ people, such as gender-affirming and reproductive care. The proposed rule would also limit the remedies available to people who face health disparities, limit the access to health care for people with Limited English Proficiency (LEP), and dramatically reduce the number of health care entities and insurance subject to the rule."

Interestingly, the Supreme Court of the United States, just a few days prior to the issuance of the new 2020 rule, issued an opinion concluding that Title VII of the Civil Rights Act of 1964 prohibited discrimination against LGBTQ+ employees.[9] The court interpreted "sex" in that statute as encompassing more than just biological sex; it encompassed gender identity. Meaning, transgender employees were covered under Title VII and couldn't be discriminated against in the workplace. The new rule issued by CMS and HHS seems to run counter to this Supreme Court decision and their analysis of "sex" in federal statutes.

Early on, two transgender women filed suit against HHS. The women claimed that they had previously been discriminated against. The District Court for the Eastern District of New York issued a preliminary injunction staying the new rule. This means that the new rule would not become effective, pending the lawsuit.

Thereafter, 23 Attorneys General filed another lawsuit. The states and districts listed as plaintiffs in the suit include California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington D.C., and Wisconsin. The Complaint states, "The 2020 Rule also guts the robust language access provisions of the 2016 Rule, including eliminating requirements that covered entities notify LEP individuals of their rights and reducing entities' obligations to ensure that LEP individuals are afforded appropriate language access services while seeking and obtaining health care."[10] The State of Washington has also filed a lawsuit to keep the new rule from becoming effective.[11]

While the various lawsuits will likely draw on for the foreseeable future, advocates can rest knowing that the new rule may not immediately take effect. Whether one is for or against the new rule, the courts will analyze the law and issue their conclusion. The new rule may stand in its entirety, be struck down and later modified by CMS and HHS, or scrapped altogether.