Inside Braidwood v. Becerra: Will Payers Waffle?

Court filings from labor and health plan organizations raise the question: Who might blink first if the Preventive Services Mandate is eliminated.

What is actual value of no-cost preventive services: Are they indispensable or optional? Does the answer change as mandates and cost-sharing do? And are short- or long-term benefits the true priority?

You can find arguments for either side in the Court filings for Braidwood v. Becerra — including health plan and employee union briefs that support the Preventive Services Mandate but acknowledge how perverse incentives may leave them no choice but to reconsider no-cost coverage.

This part three of HealthLeaders’ Inside Braidwood v. Becerra series explores healthcare’s if/then problem and the role mandates play in these dilemmas. Reread part one and part two here.

The difference a few months make

One month after the March 2023 District Court ruling, House and Senate Democratic committee leaders asked 12 of the largest U.S. health insurers and trade association how they intended to respond.

Their response in April? “The overwhelming majority do not anticipate making changes to no-cost-share preventive services and do not expect disruptions in coverage of preventive care while the case proceeds through the courts” states a letter signed by such groups as AHIP, the Blue Cross Blue Shield Association (BCBSA) and the American Benefits Council (ABC). “By responding together, we wish to make clear our strong support for continued access to preventive health care for millions of Americans who rely on it” (BenefitsPro).

Of these three organizations, the BCBSA was the only one — and only payer — to file an amicus brief appeal in Braidwood.

The BCBSA response in June?

• “Preventive services without cost-sharing has improved health outcomes”
• “Preventive services reduce long-term costs for patients and the health care system overall”
• “The District Court’s decision would be tremendously disruptive to healthcare delivery in the United States and detrimental to the public interest.”

The other part? “. . . those health insurers and health plans that continue to offer coverage for preventive services without cost-sharing may pay a competitive price for doing so.”

A payer tug-of-war: Insurers and employers

In its brief, BCBSA cites Employee Benefit Research Institute (EBRI) data that “8% of the employers it surveyed would impose cost-sharing for preventive services if the Preventive Services Mandate were lifted. A further 12% equivocated on the point.” The EBRI survey included 25 HR executives representing mostly mid- to large-sized firms representing nearly 600,000 employees and 1.2 million covered lives.

The BCBSA brief continues: “If even a small percentage of the nation’s employers elected to impose cost-sharing for preventive services or cease covering preventive services for their employees, it would detrimentally impact millions of Americans. In addition, once a significant segment of the marketplace reimposes cost-sharing for preventive services or eliminates coverage, it could create perverse competitive incentives for others to follow suit.”

Note that it’s the significant segment that would drive the marketplace to reimpose cost-sharing — not the small percentage. In the EBRI research, 80% of surveyed employers responded that they would not impose preventive services cost-sharing if allowed by law.

The BCBSA brief also states that reducing short-term costs might be a motivator for employers to reinstate cost-sharing. Conversely, a number of employers commented in their EBRI survey response that covering preventive services in full . . . “is insignificant in costs and saves money in the long term” — in addition to incentivizing use, improving health, and preventing serious conditions.

The only employer-focused organization to file an amicus brief holds insurers accountable for the potential impact to preventive services.

The Service Employees International Union (SEIU), the 2 million-member labor union, writes: “If the district court’s judgment is allowed to stand, there is a significant risk that insurance providers will cease covering these key preventive care services at no cost . . . [it] will throw the employment-based insurance industry into chaos and result in employees being denied coverage for, or being reluctant to use, life-saving preventive services.”

Healthcare’s “If/Then” problem

What employers and payers say and what they will actually do if cost-sharing is reinstated may be two different things.

When noting that competitive pressures may force insurers to reinstate cost-sharing, the BCBSA amicus brief cites Health Affairs. But the full context reads: “Insurers’ number one job is to spend less on health care services. If some health insurers start rolling back benefits, it could become a competitive disadvantage for other insurers not to do the same. A press release, by itself, thus does not inspire confidence that, when given the chance, insurers won’t start to whittle away at these benefits.”

“If they decide not to offer/cover no-cost preventive services, then we may be forced to follow suit.”

Healthcare’s us/them problems create many if/then problems.

• If Medicare negotiates drug prices, then manufacturers will raise costs elsewhere.
• If health plan costs continue to escalate, then employers will direct contract with more providers.
• If telehealth flexibilities expire permanently, then multiple stakeholders may abandon its broader use.

Aetna (a CVS Health company) has already announced that its commercial plans will no longer cover audio-only and asynchronous text-based telehealth services. The company stated that the modifications “are in line with the industry as a result of the expected PHE ending in May 2023" and that its other telehealth commercial services “are actually more extensive than what was provided pre-pandemic.”

But will this remain true after 2024, when a host of temporary Medicare telehealth policies are set to expire (e.g., “If Medicare, then everybody else”).

The need for “sticky floors”

Industry critics have long cited the influence of healthcare’s perverse incentives. It’s another matter when the association whose health plans cover one in three Americans cites them as well.

This is where regulations and the “sticky floors” they create can help. While some sticky floors may limit or slow innovation, others mandate requirements that healthcare stakeholders — including patients — can’t or won’t implement on their own. Required, no-cost preventive services are one of them.

“[I]t’s important to remember that . . . the ACA included the requirement to cover preventive services without cost-sharing because many health plans did not do so at the time.”

There are many reasons why it took a mandate to make health prevention a habit in the U.S. — cost barriers, provider and coverage access, the human propensity to progress more in times of crisis than calm. Whatever the reasons, source after source in the Braidwood filings demonstrate that the Preventive Services Mandate has saved and bettered lives.

Up next? The Plaintiffs’ reply brief in Braidwood Management, Inc. et al. v. Xavier Becerra et al. is due November 3. See Parts one and part two for Braidwood background and innovation implications.