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5th Circuit Court of AppealsAttorney General Andy Beshear is currently engaged in three national health care lawsuits to preserve essential protections for Kentucky families provided by the Patient Protection and Affordable Care Act (ACA), including the nearly 800,000 Kentuckians with pre-existing conditions.

​The Office of the Attorney General is opposing national efforts that would stop Medicaid expansion and end tax credits that help working families afford insurance. Some of these efforts would strip away key ACA protections for newborn, maturity and pediatric services, seniors' prescription drug discounts, oral and vision care, and substance abuse treatment.

A major provision of the Affordable Care Act allows significant and critical assistance for drug treatment, providing coverage to an additional 2.8 million Americans suffering from addiction. It requires both private plans and Medicaid to cover certain drug treatment. That treatment could be under threat.
 

Constitutionality of the Affordable Care Act

Texas and other states sought a ruling that the entire ACA is unconstitutional, thus threatening to completely erase the ACA along with the coverage and protections it provides, including coverage for pre-existing conditions and coverage for treatment of essential health benefits like mental health and substance abuse treatment. It would also eliminate seniors' prescription drug discounts and allow companies to charge seniors and women more for their coverage.

Attorney General Beshear and the attorneys general of 15 other states and the District of Columbia intervened in State of Texas, et al v. USA, et al  in U.S. District Court in the Northern District of Texas to protect the healthcare coverage of hundreds of thousands of Kentuckians because the federal government chose not to defend the ACA in the case.

In December 2018, the District Court ruled in favor of Texas, agreeing that the ACA is unconstitutional. Attorney General Beshear and the coalition of attorneys general have appealed the District Court's wrongful ruling. Our coalition of attorneys general asked for an expedited briefing schedule, which the court denied. The court did grant the U.S. House of Representatives the right to intervene in support of the ACA.

Current status: On appeal at the U.S. Court of Appeals for the Fifth Circuit. A briefing schedule has been set that is similar to the expedited schedule proposed by the appellees.

Next steps: The brief by our coalition of attorneys general is due on March 25, 2019.
 

U.S. Department of Labor's Association Health Plan Rule

Beshear and 11 other attorneys general have asked a federal court to reject the U.S. Department of Labor’s Association Health Plan (AHP) Rule that allows critical changes to the nation’s health care landscape. The federal government's new Rule illegally manipulates a 1974 law – the Employment Retirement Income Security Act or ERISA – to allow the creation of association health care plans by employment groups. These plans would offer fewer protections for Kentuckians currently in the individual and small group health insurance plans, and would threaten the stability the ACA provided to employer-sponsored coverage. The Rule could also threaten an employee's eligibility for health care tax incentives that keep premiums affordable.

Current status: Oral argument occurred in U.S. District Court for the District of Columbia on January 24, 2019.

Next steps: Awaiting a decision.
 

Reimbursement of Cost-Sharing Reduction Subsidies to Insurance Companies

The Affordable Care Act created subsidies to make premiums and out-of-pocket expenses more affordable in local health markets, known as exchanges. A central feature of the exchanges was federal cost-sharing reduction (CSR) subsidies. CSRs make health insurance more affordable for low- and middle-income Kentuckians by reducing out-of-pocket costs such as deductibles and co-pays. Under the CSR provisions, insurance companies pay a portion of a covered patient's out-of-pocket expenses upfront, with a promise that the insurance company will be reimbursed for those costs by the federal government.

CSR subsidies are backed by a mandatory payment provision of the ACA. That provision requires the Secretaries of Health and Human Services and the Treasury to make “periodic and timely payments” directly to insurance companies that are “equal to the value of the reductions.” It also provides a permanent appropriation that authorizes the Secretaries to reimburse insurers for CSR costs without further appropriations from Congress.

In October 2017, the Trump administration decided that the ACA’s permanent appropriation does not apply to CSR payments and refused to make the required federal payments to Insurance Companies.

Attorney General Beshear and the attorneys general of 17 other states and the District of Columbia sued to compel the U.S. Department of Health and Human Services to continue these federal payments to insurance companies that reduce monthly insurance premiums for eligible individuals who purchase polices off ACA exchanges.

Current status: This case is currently being held in abeyance by agreement of the parties. The federal government is allowing "silver loading" by insurance companies as a workaround to the loss of CSR payments.

Next steps: If the federal government ends "silver loading" by insurance companies, plaintiffs will take action again.

​What's at stake?

Coverage for preexisting conditions. It is estimated that 50% of Kentuckians under the age of 65 suffer from a pre-existing condition. Insurance companies would be able to deny coverage to all of these individuals and cancel coverage when a Kentuckian gets sick without the protections of the Affordable Care Act (ACA).

Expanded Medicaid. Eliminating the ACA would wipe out Medicaid expansion entirely, which has provided coverage to more than 500,000 Kentuckians. These families would lose coverage, and the state would lose nearly $50 billion in funding, which cycles through Kentucky’s economy, resulting in a loss of tens of thousands of health care and related jobs.

Children under the age of 26 on their parents’ insurance plans. The ACA requires insurance companies to let children under the age of 26 remain on their parents’ insurance plans. Those protections would be gone, leaving Kentucky families at risk. This provision is among the most popular in the law because it allows parents to cover their children during their college and early working years.

Seniors and prescription drug prices. The ACA closed the so-called “donut hole” – the coverage gap in Medicare Part D prescription drug coverage over time. Without the ACA, seniors would be forced to incur thousands of dollars in additional prescription drug costs.

Women charged more than men. The ACA eliminated gender discrimination in health care. Without the ACA, insurance companies can charge women more than they can charge men for health care based solely on their gender.

Guaranteed pregnancy coverage. Before the ACA, it was virtually impossible to access quality pregnancy coverage in the private market. Insurers would charge astronomical sums for special, separate policies that imposed lengthy waiting periods before they would go into effect. The result was that women didn’t get vital prenatal care and their babies were more likely to be born too early or suffer from preventable complications.

Substance Use Disorder Treatment. The ACA has been a vital tool to help Kentucky fight the opioid epidemic because the law requires insurance plans to cover substance abuse treatment on par with other services. The Foundation for a Healthy Kentucky reported a 740% increase in substance abuse services for Medicaid expansion beneficiaries, and a 400% increase in the number of Kentuckians with traditional Medicaid receiving substance abuse treatment from 2014 to 2016.

Rural hospitals. Studies have repeatedly shown that rural hospitals are more likely to close in states that have not expanded Medicaid. Kentucky hospitals have received billions from Medicaid expansion, and without that critical funding, many would find themselves in dire financial straits, jeopardizing thousands of good-paying jobs in the neediest areas of the Commonwealth.

No-cost immunizations and well-child visits. The ACA guarantees that parents can ensure their children receive life-saving immunizations free of charge. Those protections would be gone, and parents could have to pay staggeringly high sums for vaccines.

Older Kentuckians charged vastly more than younger ones. The ACA guarantees that older Kentuckians can never be charged more than three times as much as younger ones for health insurance. Those protections would be eliminated, making it virtually certain that insurance costs for older Kentuckians, particularly those in the 55-64 age range, would skyrocket making insurance essentially unavailable to older, hard-working Kentuckians whose jobs don’t provide it.

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