In 2010, Congress passed the Patient Protection and Affordable Care Act (ACA) to increase the number of Americans covered by health insurance, decrease the costs of health care, and provide important protections to health care consumers. Over the last two years, the Trump Administration has repeatedly taken steps to undermine Congress’s goal of expanding coverage. For instance, in 2018, the Trump Administration issued a rule that redefines the permissible duration of short-term limited duration insurance (STLDI) plans. STLDI plans are supposed to be temporary plans that consumers can purchase when they are without insurance for a short period of time, such as when they are between jobs. These plans do not need to comply with individual market regulations that the ACA imposes, such as the prohibition on insurers discriminating against consumers with preexisting conditions, and the requirement that plans provide essential health benefits. The Trump Administration’s 2018 rule allows consumers to purchase STLDI plans that last nearly an entire year, and can be extended for up to three years.

In August 2018, a group of associations and organizations that provide individual health insurance coverage, provide various medical services, and purchase health insurance filed a lawsuit challenging the rule in the United States District Court for the District of Columbia. The lawsuit alleged that the 2018 rule allows insurers to market short-term plans as alternatives to ACA-compliant policies even though they do not comply with ACA consumer-protection and essential benefits requirements, undermining the markets the ACA created to provide comprehensive health care to as many Americans as possible. In July 2019, the district court upheld the rule, and the plaintiffs appealed the case to the D.C. Circuit.

CAC, along with the General Counsel of the House of Representatives, filed a brief on behalf of the U.S House of Representatives as amicus curiae in support of those challenging the rule. The brief made three points. First, our brief explained why Congress passed the Affordable Care Act, focusing on the state of the health insurance market at the time the ACA passed and the serious difficulties the prior system had in providing quality, affordable health insurance to all Americans. Second, the brief described the reforms that the ACA put in place in an effort to increase the number of Americans with health insurance and to provide critical protections to those with insurance.  Finally, the brief explained how the Administration’s rule undermines the ACA in two ways. First, it allows consumers to purchase years-long STLDI plans instead of comprehensive plans on the individual market, thereby reducing the number of individuals in the individual market risk pools, driving up costs and destabilizing that market.  Second, the Rule permits insurers to market STLDI plans without adequately disclosing that such plans do not abide by the consumer protections the ACA’s drafters believed were critical to the Act’s reforms: prohibiting discrimination based on a consumer’s preexisting medical condition, and providing comprehensive insurance that covers all essential medical needs.  Thousands of consumers are then left, knowingly or unknowingly, without comprehensive coverage when they need it—contrary to Congress’s goal in passing the Affordable Care Act.

The D.C. Circuit upheld the rule.  Specifically, the Court rejected plaintiffs’ argument that the STLDI rule is irreconcilable with the structure and plan of the ACA.  Because Congress created the STLDI exception before the ACA was passed, the Court concluded that the Treasury Department was acting lawfully when it defined which insurance policies fall into that exception.  Furthermore, the Court concluded that the new STLDI rules were justified based on a reasonable assumption that they would uphold the stability of the ACA’s health insurance exchanges.