ACA Preventive Care Provision Deemed Unconstitutional

On March 30, 2023, a Texas federal court released a ruling that challenges the constitutionality of the ACA’s requirement for health plans to cover certain preventive care with no cost sharing. Judge Reed O’Connor’s decision invalidates certain provisions of the Affordable Care Act’s preventive care mandate (indicating those provisions were unconstitutional). The ruling prevents the government from enforcing the ACA requirement that insurers cover certain preventive care services on a zero-cost basis.

The preventive care provision of the ACA is arguably one of the most popular provisions of the ACA. It is also long-heralded as one of the best and most cost-effective investments in American health.


The lawsuit stems from the desire to curb payment for certain preventive care services, not a general dislike of the concept of paying for preventive care services in general. However, in order to make the legal argument work, the lawsuit had to use a broad brush and challenge the requirement to all preventive care services.

The lawsuit was filed in Texas by Dr. Steven Hotze, who owns a wellness center that employs about 70 people. Dr. Hotze is a Christian and, because of his religious beliefs, is opposed to the ACA requirement that the insurance that he offers to his employees cover preventive care services, specifically pre-exposure prophylaxis (PrEP) drugs that prevent transmission of HIV. In his view, the drugs “facilitate behaviors such as homosexual sodomy, prostitution, and intravenous drug use.” Because this conflicts with his religious beliefs, it is a violation of the Religious Freedom Restoration Act.

Following is a summary of some interesting facts about the case and the circumstances surrounding it:

  • Judge O’Connor is the same judge who previously issued the ruling that the ACA was unconstitutional on the grounds that the then-zeroed-out individual mandate penalty was not a tax. That ruling was later overturned by the Supreme Court.
  • Hotze’s lawyer is Jonathan Mitchell. Mitchell is the legal mastermind behind S.B. 8, the Texas law that effectively banned abortion in Texas even before the U.S. Supreme Court overruled Roe v. Wade.
  • Hotze filed suit before Judge O’Connor in the name of the management company, Braidwood, that employs his workers. Thus, the case name is Braidwood v. U.S. Department of Health and Human Services.
  • PrEP is a daily pill that has proven effective in helping to prevent HIV. The annual cost runs between $13,000–$20,000 per person. The U.S. Preventive Services Task Force (USPSTF) has given it a grade of “A.” This means it is “Strongly Recommended” as a preventive care measure and that health plans must cover it without any cost share under the ACA.

What is the legal argument?

Braidwood’s main legal claim rests on an obscure but significant provision of the U.S. Constitution called the Appointments Clause. In simple terms, the Appointments Clause says that legally significant government decisions must be made by federal officers who are appointed by the president or by a department head. This legal challenge argues that the members of the U.S. Preventive Services Task Force aren’t appointed and therefore are not federal officers. As such, the decisions they make on which treatments qualify as preventive care under the ACA aren’t valid.

Effectively, the judge found the members of the USPSTF were unlawfully appointed, which then voided any of their recommendations over the past 10+ years.

Following are some additional facts that are interesting:

  • The U.S. Preventive Services Task Force is the entity that “grades” medical treatments. A grade of A or B determines that the service must be covered by insurance companies under the no-cost preventive care services under the ACA.
  • It is true that the members of the U.S. Preventive Services Task Force are not federal officers appointed by the president or a department head.
  • In September, Judge O’Connor sided with Braidwood, holding that it was unconstitutional for the Task Force to make legally significant choices about free preventive services.
  • However, he held off on issuing a final ruling until he could get a further briefing on the proper scope of relief.

This happened in Texas. Why does it matter to me?

In the final ruling, Judge O’Connor held that the decision reaches across the entire country. It should not be limited just to Braidwood and not just to Texas.

This determination is effective immediately and retroactive to March 23, 2010.

What about mammograms and well-baby exams?

The ruling was limited to only preventive care recommendations made by the U.S. Preventive Services Task Force, which dates back to March 23, 2010. Any care deemed preventive prior to the Task Force making decisions would not be impacted. While the vast majority of preventive care items have been added since 2010, age-old preventive care services such as mammograms, contraception, immunizations, and well-baby/child exams were adopted prior to 2010 and, therefore, would not be negatively impacted.

Why are people concerned about contraception?

Pundits have pondered that the lawsuit may be expanded to threaten a related part of the ACA that requires coverage of preventive services for women, including contraception. In an earlier ruling, Judge O’Connor held that the contraception mandate passed constitutional muster because a properly appointed federal officer (Secretary of Health and Human Services Xavier Becerra) approved it.

However, that argument is not airtight, and the Fifth Circuit, the very conservative appeals court that covers Texas, could go further and challenge that element of the mandate, as well.

What does the future hold?

This is a significant lawsuit and an important challenge to the ACA. The ultimate outcome of this decision remains to be seen. In the meantime, it will certainly create some confusion for employers sponsoring group health plans. Following is a short summary of some potential actions we may see:

Future Appeal: The ruling will most certainly be appealed by the HHS.

Interim Request for Stay to Judge: The HHS will appeal and request that Judge O’Connor enter a stay while the case is on appeal. If the judge denies the stay, a request can be made directly to the Fifth Circuit Court.

Interim Request for Stay to Fifth Circuit Court: The Biden administration has already filed a Notice of Appeal and will presumably seek a stay of this decision from the Fifth Circuit Court. A stay would prevent the decision from going into effect until a decision on the case’s merits is issued by the Fifth Circuit or potentially the U.S. Supreme Court.

Supreme Court Appeal: It is very likely that this case will be appealed and make its way all the way to the Supreme Court.

Potential Congressional Action: Congress could act and pass legislation to ensure access to preventive care services. The legislation would be relatively straightforward and redirect final authority for preventive care services to HHS Secretary Becerra. This solution would require a bipartisan effort.

From a timing perspective, an appeal is likely to take at least a year. If the case moves to the Supreme Court, it will likely be two years before an ultimate decision is made. In the interim, we can expect uncertainty and unrest while the issue plays out in the courts.

Action Items

Many Employers Won’t Make Changes: Many, if not most, employers will not implement changes to how preventive care is covered under their health plans, regardless of the ruling that indicates it is no longer required to be covered at 100%.

HDHP Coverage: Employers sponsoring HDHP plans will want to consider the impact of maintaining no cost-sharing coverage for the USPSTF-mandated preventive care benefits. The concern here is that if previously covered preventive care services continue to be covered at 100%, this could potentially compromise participants’ ability to contribute to their HSAs. Recall that a requirement of HDHP plans is that “only” preventive care can be covered on a first-dollar basis, and the ruling now brings into question what constitutes federally approved preventive care. For reference, the IRS has previously interpreted the definition of preventive care for HSA purposes to include any preventive health services mandated by the ACA. This ruling obviously changes what is included under that definition.