New York Attorney General Letitia James (Photo: David Handschuh/ALM) New York Attorney General Letitia James (Photo: David Handschuh/ALM)

A federal magistrate judge has blocked a Trump administration Affordable Care Act (ACA) rule change related to abortion billing, declaring it without “reasoned explanation” and giving state Attorney General Letitia James and others in her coalition of states a hard-fought victory.

“In sum, agencies can change their policies when they provide a reasoned explanation for the change,” wrote U.S. District Magistrate Judge Laurel Beeler of the Northern District of California in addressing a Department of Health and Human Services (HHS) change to the ACA that would have required separate abortion-based insurance billing.

“But here, HHS — by requiring two [insurance] issuer bills [one for abortion coverage and one otherwise] and two consumer transaction-payments, at substantial transactional cost to states, issuers and enrollees and without any corresponding benefit  —  does not advance a reasoned explanation for deviating from its prior rule and industry practice.”

“The new rule is arbitrary and capricious,” wrote Beeler in setting aside the new rule, which was set to go into effect this summer. Her decision, issued on Monday night, granted summary judgment to James and a coalition of seven state attorneys general and one from the District of Columbia who had asked that the rule be vacated because, among other reasons, it violated the federal Administrative Procedure Act and was contrary to the ACA.

Resources

  • A copy of the ruling is available here.
  • An article about an ACA birth control mandate case that involved interpretations of the Administrative Procedure Act is available here.

James and California Attorney General Xavier Becerra led the coalition of states and the District of Columbia. Their efforts involved launching a 73-page, declaratory-based federal lawsuit in California in January seeking to stop the rule’s implementation; a 43-page motion for summary judgment lodged in March in the action; and issuing detailed public letters sent to HHS secretary Alex M. Azar II in both April and July asking the Trump Administration to withdraw, suspend indefinitely or delay the rule. James and other state A.G. offices also issued numerous news releases about their actions.

The other states involved in the legal actions and letters were Colorado, Maryland, Oregon, Vermont and Maine.

One of the key arguments made by James and the coalition of attorneys general has been that if the rule, which would affect qualified health plans participating in state health care exchanges, would “increase consumer confusion because those who do not understand the purpose of the two separate bills and payments may inadvertently fail to make complete premium payments on time,” according to the coalition’s January-filed complaint.

“This confusion may result in premium increases or loss of coverage, affecting almost 2.6 million enrollees who receive abortion coverage through a qualified health plan in the 11 impacted state-based exchanges,” according to the complaint. “In the States alone, the Rule puts the coverage of over 2.2 million enrollees in the individual market at risk of coverage termination,” and the “rule will have a disparate impact on women and their access to abortion care — a critically time-sensitive and women-specific procedure.”

HHS could not be reached for comment Tuesday, and it was unclear if the agency intends to appeal Beeler’s summary judgment ruling.

In a news release Tuesday, James declared victory.

“From the beginning, this rule was an egregious attempt by President Trump and his administration to control women, and make it harder for those struggling financially to exercise their constitutional right to access an abortion,” James said. “This decision will immediately stop the Trump Administration’s anti-choice assault on women’s reproductive choices and will allow millions of women across New York and the rest of the nation to retain control over their bodies.”

Officials in her office also stated that the rule “would have made it more difficult for women in New York and across the nation to access abortion services under the Patient Protection and Affordable Care Act (ACA),” and said that it “threatened to potentially kick millions of women off their health plans if they failed to comply with a technical billing issue related to abortion coverage.”

Beeler, in her 15-page opinion, wrote in part that the new rule, which would have changed an Obama-era rule affecting Section 1303 of the ACA, would have necessitated substantial “transactional costs to states, issuers, and enrollees.” And she noted that “HHS does not identify any transactional benefit.”

— Read House Avoids Abortion-Related ACA Premium Subsidy Fighton ThinkAdvisor.

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