U.S. District Court District of Maryland (Baltimore) CIVIL DOCKET FOR CASE #: 1:18-cv-02364-DKC

Create an Alert for This Case on RECAP

City of Columbus et al v. Trump et al Assigned to: Judge Deborah K. Chasanow Cause: 05:702 Administrative Procedure Act - Right of Review

Date Filed: 08/02/2018 Jury Demand: None Nature of Suit: 899 Other Statutes: Administrative Procedures Act/Review or Appeal of Agency Decision Jurisdiction: Federal Question

Plaintiff City of Columbus

represented by Adam Grogg 219 Cannon House Office Building Washington, DC 20515 2022259700 Fax: 2022261360 Email: adam.grogg@mail.house.gov TERMINATED: 08/12/2019 PRO HAC VICE

Charles Campisano Columbus City Attorney's Office 77 North Front St. 4th Floor Columbus, OH 43215 6146457385 Fax: 6146456949 Email: cpcampisano@columbus.gov PRO HAC VICE ATTORNEY TO BE NOTICED

Javier M Guzman Democracy Forward Foundation 1333 H St. NW Washington, DC 20005 2024489090 Email: jguzman@democracyforward.org TERMINATED: 12/06/2019 PRO HAC VICE

Jennifer Shea Columbus City Attorney's Office

77 North Front St. 4th Floor Columbus, OH 43215 6146457385 Fax: 6146456949 Email: jlshea@columbus.gov PRO HAC VICE ATTORNEY TO BE NOTICED
John T Lewis , III Democracy Forward Foundation PO Box 34553 Washington, DC 20043 2024489090 Email: jlewis@democracyforward.org PRO HAC VICE ATTORNEY TO BE NOTICED
Lara Baker Morrish Columbus City Attorney's Office 77 North Front St. 4th Floor Columbus, OH 43215 6146457388 Fax: 6146456949 Email: lnbaker-morrish@columbus.gov PRO HAC VICE ATTORNEY TO BE NOTICED
Richard N Coglianese Columbus City Attorneys Office 77 N Front St. Columbus, OH 43215 6146450818 Fax: 6147246503 Email: rncoglianese@columbus.gov PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev Democracy Forward Foundation 1333 H St. NW Washington, DC 20005 2024489090 Email: slev@democracyforward.org PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Mayor and City Council Of Baltimore

Stephen William Miller Harris, Wiltshire & Grannis LLP 1919 M Street NW Eighth Floor Washington, DC 20036 2027301300 Email: smiller@hwglaw.com ATTORNEY TO BE NOTICED
Zach Klein Columbus City Attorney's Office 77 North Front St. 4th Floor Columbus, OH 43215 6146457385 Fax: 6146456949 Email: zmklein@columbus.gov PRO HAC VICE ATTORNEY TO BE NOTICED
Sara Kropf Kropf Moseley PLLC 1100 H Street NW Suite 1220 Washington, DC 20005 2026276900 Email: sara@kmlawfirm.com ATTORNEY TO BE NOTICED
represented by Suzanne Sangree City of Baltimore Law Department Senior Public Safety Counsel City Hall Room 109 100 N Holliday St Baltimore, MD 21202 14433882190 Fax: 14105390536 Email: suzanne.sangree2@baltimorecity.gov TERMINATED: 11/12/2020 LEAD ATTORNEY ATTORNEY TO BE NOTICED
Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE

Andre M Davis Baltimore City Department Of Law 100 N. Holliday Street, Suite 101 Baltimore, MD 21202 4103968393 Fax: 4106594077 Email: andre.davis@baltimorecity.gov TERMINATED: 03/23/2020
Elizabeth Ryan Martinez Baltimore City Law Department 100 N Holliday St Baltimore, MD 21202 14103963268 Fax: 14105471025 Email: liz.martinez@baltimorecity.gov ATTORNEY TO BE NOTICED
Jane Hannah Lewis Baltimore City Law Department 100 N Holliday Street City Hall - Room 107 Baltimore, MD 21202 410-396-0165 Email: jane.lewis@baltimorecity.gov ATTORNEY TO BE NOTICED
Javier M Guzman (See above for address) TERMINATED: 12/06/2019 PRO HAC VICE
John T Lewis , III (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Stephen William Miller (See above for address) ATTORNEY TO BE NOTICED

Plaintiff City of Cincinnati
Plaintiff City of Chicago

Sara Kropf (See above for address) ATTORNEY TO BE NOTICED
represented by Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE
Javier M Guzman (See above for address) TERMINATED: 12/06/2019 PRO HAC VICE
John T Lewis , III (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Stephen William Miller (See above for address) ATTORNEY TO BE NOTICED
Sara Kropf (See above for address) ATTORNEY TO BE NOTICED
represented by Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE
Javier M Guzman (See above for address) TERMINATED: 12/06/2019 PRO HAC VICE
John T Lewis , III

Plaintiff Stephen Vondra
Plaintiff

(See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Stephen William Miller (See above for address) ATTORNEY TO BE NOTICED
Sara Kropf (See above for address) ATTORNEY TO BE NOTICED
represented by Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE
Javier M Guzman (See above for address) TERMINATED: 12/06/2019 PRO HAC VICE
John T Lewis , III (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Stephen William Miller (See above for address) ATTORNEY TO BE NOTICED
Sara Kropf (See above for address) ATTORNEY TO BE NOTICED

Bonnie Morgan
Plaintiff City of Philadelphia

represented by Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE
Javier M Guzman (See above for address) TERMINATED: 12/06/2019 PRO HAC VICE
John T Lewis , III (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Sean A Lev (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Stephen William Miller (See above for address) ATTORNEY TO BE NOTICED
Sara Kropf (See above for address) ATTORNEY TO BE NOTICED
represented by John T Lewis , III (See above for address) LEAD ATTORNEY PRO HAC VICE ATTORNEY TO BE NOTICED
Adam Grogg (See above for address) TERMINATED: 08/12/2019 PRO HAC VICE
Sara Kropf (See above for address) ATTORNEY TO BE NOTICED
Sean A Lev (See above for address)

PRO HAC VICE ATTORNEY TO BE NOTICED

V. Defendant Donald J. Trump TERMINATED: 04/21/2020
Defendant Alex M. Azar, II

represented by Kathryn L Wyer U.s. Department Of Justice Civil Division 1100 L St. NW Washington, DC 20005 2026168475 Fax: 2026168470 Email: kathryn.wyer@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED
Daniel Mauler U.s. Department Of Justice 1100 L St. NW Rm. 11206 Washington, DC 20005 2026160773 Fax: 2026168470 Email: dan.mauler@usdoj.gov TERMINATED: 05/07/2019
Tamra Tyree Moore US Department of Justice 1100 L Street NW Washington, DC 20005 2023058628 Fax: 2026168470 Email: tamra.moore@usdoj.gov ATTORNEY TO BE NOTICED
represented by Kathryn L Wyer (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Daniel Mauler (See above for address) TERMINATED: 05/07/2019
Tamra Tyree Moore

Defendant
United States Department of Health and Human Services

(See above for address) ATTORNEY TO BE NOTICED
represented by Kathryn L Wyer (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Daniel Mauler (See above for address) TERMINATED: 05/07/2019

Defendant Seema Verma

Tamra Tyree Moore (See above for address) ATTORNEY TO BE NOTICED
represented by Kathryn L Wyer (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Daniel Mauler (See above for address) TERMINATED: 05/07/2019

Defendant
Centers for Medicare and Medicaid Services

Tamra Tyree Moore (See above for address) ATTORNEY TO BE NOTICED
represented by Kathryn L Wyer (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Daniel Mauler (See above for address) TERMINATED: 05/07/2019

Amicus

Tamra Tyree Moore (See above for address) ATTORNEY TO BE NOTICED

State of California
Amicus United States House of Representatives

represented by Jimmy Rock District of Columbia Office of Attorney General 441 Fourth Street NW Suite 600-S Washington, DC 20001 2027410770 Email: jimmy.rock@dc.gov ATTORNEY TO BE NOTICED
Michael K Addo Office of the Attorney General for the District of Columbia 441 Fourth St NW Washington, DC 20910 2027246539 Fax: 2027410585 Email: michael.addo@dc.gov ATTORNEY TO BE NOTICED
Nimrod Pitsker Elias California Department of Justice 1515 Clay St. Oakland, CA 94612 5108790012 Fax: 5106222270 Email: Nimrod.Elias@doj.ca.gov PRO HAC VICE ATTORNEY TO BE NOTICED
Valerie M. Nannery 2208 Good Hope Road SE Washington, DC 20020 2025774436 Email: valerie.nannery@dc.gov TERMINATED: 10/14/2019
represented by Douglas Letter 219 Cannon HOB Washington, DC 20515 2022259700 Fax: 2022261360 Email: douglas.letter@mail.house.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED

Amicus Montgomery County, Maryland
Amicus County of Santa Clara, California
Amicus City of Berkeley, California
Amicus Cook County, Illinois
Amicus

Brianne J Gorod Constitutional Accountability Center 1200 18th St. NW Ste. 501 Washington, DC 20036 2022966889 Email: brianne@theusconstitution.org ATTORNEY TO BE NOTICED
Megan Barbero 219 Cannon HOB Washington, DC 20515 2022259700 Fax: 2022261360 Email: Megan.Barbero@mail.house.gov ATTORNEY TO BE NOTICED
represented by Edward Barry Lattner Office of the County Attorney for Montgomery County MD 101 Monroe St Third Fl Rockville, MD 20850-2580 12407776735 Fax: 12407776705 Email: Edward.Lattner@MontgomeryCountyMD.gov ATTORNEY TO BE NOTICED
represented by Edward Barry Lattner (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED
represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

City of Dayton, Ohio

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus
City of Los Angeles, California represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus
City of Minneapolis, Minnesota

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus City of Oakland, California

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus City of Saint Paul, Minnesota

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus
City and County of San Francisco, California

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus City of Seattle, Washington

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus Shelby County, Tennessee

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus Travis County, Texas

represented by Edward Barry Lattner (See above for address) ATTORNEY TO BE NOTICED

Amicus Families USA

represented by Peter R Kolker Zuckerman Spaeder LLP

1800 M St NW Ste 1000 Washington, DC 20036 12027781812 Fax: 12028228106 Email: pkolker@zuckerman.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Margaret M Dotzel Zuckerman Spaeder LLP 1800 M St. NW Ste. 1000 Washington, DC 20036 2027781800 Fax: 2028228106 Email: mdotzel@zuckerman.com PRO HAC VICE ATTORNEY TO BE NOTICED

Amicus Community Catalyst

William B Schultz Zuckerman Spaeder LLP 1800 M St Ste 1000 Washington, DC 20036 2027781800 Fax: 2028228106 Email: wschultz@zuckerman.com ATTORNEY TO BE NOTICED
represented by Peter R Kolker (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Margaret M Dotzel (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Amicus
National Health Law Program represented by Peter R Kolker (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED

Margaret M Dotzel (See above for address)

Amicus Service Employees International Union
Amicus Henry J. Aaron
Amicus Joshua Peck

PRO HAC VICE ATTORNEY TO BE NOTICED
William B Schultz (See above for address) ATTORNEY TO BE NOTICED
represented by Peter R Kolker (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Margaret M Dotzel (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
William B Schultz (See above for address) ATTORNEY TO BE NOTICED
represented by Jonathan G Cedarbaum WilmerHale LLP 1875 Pennsylvania Ave NW Washington, DC 20006 12026636315 Fax: 12026636363 Email: Jonathan.Cedarbaum@wilmerhale.com LEAD ATTORNEY ATTORNEY TO BE NOTICED
Paul Reinherz Q Wolfson Wilmer Cutler Pickering Hale and Dorr 1875 Pennsylvania Ave. NW Washington, DC 20006 2026636390 Fax: 2026636363 Email: paul.wolfson@wilmerhale.com PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Alexander Galicki Cleary Gottlieb Steen and Hamilton LLP

Amicus
Russell Paul Hanser Shriver Center on Poverty Law, Planned Parenthood Federation of America, the National Health Law Program, the Asian & Pacific Islander American Health Forum, the Association

2112 Pennsylvania Ave. Ste. 1000 Washington, DC 20037 2029741655 Fax: 2029741999 Email: agalicki@cgsh.com TERMINATED: 07/30/2019 PRO HAC VICE
Alexis Collins Cleary Gottlieb Steen and Hamilton LLP 2112 Pennsylvania Ave. Ste. 1000 Washington, DC 20037 2029741519 Fax: 2029741999 Email: alcollins@cgsh.com PRO HAC VICE ATTORNEY TO BE NOTICED
Jessica Hollis Cleary Gottlieb Steen and Hamilton LLP 2112 Pennsylvania Ave. Ste. 1000 Washington, DC 20037 2029741637 Fax: 2029741999 Email: jhollis@cgsh.com PRO HAC VICE ATTORNEY TO BE NOTICED
Matthew David Slater Cleary Gottlieb Steen and Hamilton LLP 2112 Pennsylvania Ave NW Suite 1000 Washington, DC 20037 12029741500 Fax: 12029741999 Email: mslater@cgsh.com ATTORNEY TO BE NOTICED

of Asian Pacific Community Health Organizations, and Families USA

Amicus

Shriver Center et al.

represented by Russell Paul Hanser

Shriver Center on Poverty Law,

Wilkinson Barker Knauer, LLP

Planned Parenthood Federation

1800 M St. NW, Ste. 800N

of America, the National Health

Washington, DC 20036

Law Program, the Asian &

202-383-3408

Pacific Islander American

Email: rhanser@wbklaw.com

Health Forum, the Association

LEAD ATTORNEY

of Asian Pacific Community

ATTORNEY TO BE NOTICED

Health Organizations, and

Families USA

Amicus Young Invincibles

represented by Jennifer C Guest King and Spalding 1700 Pennsylvania Ave. NW Washington, DC 20006 2026269260 Email: jguest@kslaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Ahsin Azim King and Spalding LLP 1700 Pennsylvania Ave. #200 Washington, DC 20006 2026269262 Fax: 2026263737 Email: aazim@kslaw.com PRO HAC VICE ATTORNEY TO BE NOTICED

Joel Lunsford McElvain King & Spalding LLP 1700 Pennsylvania Ave., NW Suite 200 Washington, DC 20006 12026262929 Fax: 12026263737 Email: jmcelvain@kslaw.com ATTORNEY TO BE NOTICED

Date Filed 08/02/2018
08/02/2018
08/02/2018
08/02/2018
08/02/2018
08/02/2018 08/02/2018 08/02/2018 08/02/2018 08/02/2018

# Docket Text

COMPLAINT against All Defendants ( Filing fee $ 400 receipt

1

number 0416-7479532.), filed by Bonnie Morgan, City of

Cincinnati, Mayor and City Council Of Baltimore, City of Chicago,

City of Columbus, Stephen Vondra. (Attachments: # 1 Civil Cover

Sheet, # 2 Summons, # 3 Summons, # 4 Summons, # 5 Summons,

# 6 Summons)(Kropf, Sara) (Entered: 08/02/2018)

2 NOTICE by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen

Vondra re 1 Complaint, (requesting issuance of additional summonses) (Attachments: # 1 Summons, # 2 Summons)(Kropf, Sara) (Entered: 08/02/2018)
3 MOTION to Appear Pro Hac Vice for Adam Grogg (Filing fee $100, receipt number 0416-7479542.) by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra(Kropf, Sara) (Entered: 08/02/2018)
4 MOTION to Appear Pro Hac Vice for John T. Lewis (Filing fee $100, receipt number 0416-7479544.) by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra(Kropf, Sara) (Entered: 08/02/2018)
5 MOTION to Appear Pro Hac Vice for Javier M. Guzman (Filing fee $100, receipt number 0416-7479545.) by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra(Kropf, Sara) (Entered: 08/02/2018)
6 Local Rule 103.3 Disclosure Statement by City of Columbus (Kropf, Sara) (Entered: 08/02/2018)
7 Local Rule 103.3 Disclosure Statement by Mayor and City Council Of Baltimore (Kropf, Sara) (Entered: 08/02/2018)
8 Local Rule 103.3 Disclosure Statement by City of Cincinnati (Kropf, Sara) (Entered: 08/02/2018)
9 Local Rule 103.3 Disclosure Statement by City of Chicago (Kropf, Sara) (Entered: 08/02/2018)
10 MOTION to Appear Pro Hac Vice for Jennifer Shea (Filing fee $100, receipt number 0416-7481477.) by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra(Kropf, Sara) (Entered: 08/02/2018)

08/02/2018 08/02/2018 08/02/2018 08/03/2018
08/03/2018 08/03/2018
08/03/2018 08/03/2018 08/03/2018

11 MOTION to Appear Pro Hac Vice for Charles Campisano (Filing fee $100, receipt number 0416-7481499.) by City of Columbus(Kropf, Sara) (Entered: 08/02/2018)
12 MOTION to Appear Pro Hac Vice for Zach Klein (Filing fee $100, receipt number 0416-7481500.) by City of Columbus(Kropf, Sara) (Entered: 08/02/2018)
13 MOTION to Appear Pro Hac Vice for Lara Baker-Morrish (Filing fee $100, receipt number 0416-7481504.) by City of Columbus(Kropf, Sara) (Entered: 08/02/2018)
14 PAPERLESS ORDER granting 3 Motion to Appear Pro Hac Vice on behalf of Adam Grogg. Directing attorney Adam Grogg to use the attorney's existing CM/ECF login and password previously issued in this Court. The account password can be reset at http://www.mdd.uscourts.gov/electronic-case-filing-password-reset. Signed by Clerk on 8/3/2018. (srd, Deputy Clerk) (Entered: 08/03/2018)
15 PAPERLESS ORDER granting 4 Motion to Appear Pro Hac Vice on behalf of John T Lewis. Directing attorney John T Lewis to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 8/3/2018. (srd, Deputy Clerk) (Entered: 08/03/2018)
16 PAPERLESS ORDER granting 5 Motion to Appear Pro Hac Vice on behalf of Javier M Guzman. Directing attorney Javier M Guzman to use the attorney's existing CM/ECF login and password previously issued in this Court. The account password can be reset at http://www.mdd.uscourts.gov/electronic-case-filing-password-reset. Signed by Clerk on 8/3/2018. (srd, Deputy Clerk) (Entered: 08/03/2018)
17 QC NOTICE: 10 Motion to Appear Pro Hac Vice, filed by Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra, City of Cincinnati, City of Chicago, City of Columbus needs to be modified. See attachment for details and corrective actions needed regarding the signature(s) on the motion. (srd, Deputy Clerk) (Entered: 08/03/2018)
18 QC NOTICE: 11 Motion to Appear Pro Hac Vice filed by City of Columbus needs to be modified. See attachment for details and corrective actions needed regarding the signature(s) on the motion. (srd, Deputy Clerk) (Entered: 08/03/2018)
19 QC NOTICE: 12 Motion to Appear Pro Hac Vice filed by City of Columbus needs to be modified. See attachment for details and

08/03/2018 08/06/2018 08/06/2018 08/06/2018 08/09/2018
08/14/2018 08/14/2018 08/14/2018 08/14/2018 08/16/2018
08/16/2018

corrective actions needed regarding the signature(s) on the motion. (srd, Deputy Clerk) (Entered: 08/03/2018)
20 QC NOTICE: 13 Motion to Appear Pro Hac Vice filed by City of Columbus needs to be modified. See attachment for details and corrective actions needed regarding the signature(s) on the motion. (srd, Deputy Clerk) (Entered: 08/03/2018)
21 NOTICE of Appearance by Elizabeth Ryan Martinez on behalf of Mayor and City Council Of Baltimore (Martinez, Elizabeth) (Entered: 08/06/2018)
22 NOTICE of Appearance by Andre M Davis on behalf of Mayor and City Council Of Baltimore (Davis, Andre) (Entered: 08/06/2018)
23 NOTICE of Appearance by Suzanne Sangree on behalf of Mayor and City Council Of Baltimore (Sangree, Suzanne) (Entered: 08/06/2018)
24 Summons Issued 60 days as to Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma, U.S. Attorney and U.S. Attorney General(heps, Deputy Clerk) (Entered: 08/09/2018)
25 CORRECTED MOTION to Appear Pro Hac Vice for Zach Klein by City of Columbus. The fee has already been paid.(Kropf, Sara) (Entered: 08/14/2018)
26 CORRECTED MOTION to Appear Pro Hac Vice for Lara BakerMorrish by City of Columbus. The fee has already been paid.(Kropf, Sara) (Entered: 08/14/2018)
27 CORRECTED MOTION to Appear Pro Hac Vice for Charles Campisano by City of Columbus. The fee has already been paid.(Kropf, Sara) (Entered: 08/14/2018)
28 CORRECTED MOTION to Appear Pro Hac Vice for Jennifer Shea by City of Columbus. The fee has already been paid.(Kropf, Sara) (Entered: 08/14/2018)
29 PAPERLESS ORDER granting 25 Corrected Motion to Appear Pro Hac Vice on behalf of Zach Klein. Directing attorney Zach Klein to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 8/16/2018. (srd, Deputy Clerk) (Entered: 08/16/2018)
30 PAPERLESS ORDER granting 26 Corrected Motion to Appear Pro Hac Vice on behalf of Lara Baker-Morrish. Directing attorney Lara Baker-Morrish to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration.

08/16/2018 08/16/2018 08/17/2018
10/03/2018 10/03/2018 10/03/2018 12/03/2018 12/04/2018

Signed by Clerk on 8/16/2018. (srd, Deputy Clerk) (Entered: 08/16/2018)
31 PAPERLESS ORDER granting 27 Corrected Motion to Appear Pro Hac Vice on behalf of Charles Campisano. Directing attorney Charles Campisano to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 8/16/2018. (srd, Deputy Clerk) (Entered: 08/16/2018)
32 PAPERLESS ORDER granting 28 Corrected Motion to Appear Pro Hac Vice on behalf of Jennifer Shea. Directing attorney Jennifer Shea to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 8/16/2018. (srd, Deputy Clerk) (Entered: 08/16/2018)
33 SUMMONS Returned Executed by Bonnie Morgan, City of Cincinnati, Mayor and City Council Of Baltimore, City of Chicago, City of Columbus, Stephen Vondra. All Defendants., SUMMONS Returned Executed by Bonnie Morgan, City of Cincinnati, Mayor and City Council Of Baltimore, City of Chicago, City of Columbus, Stephen Vondra. All Defendants. (Attachments: # 1 Affidavit)(Grogg, Adam) (Entered: 08/17/2018)
34 NOTICE of Appearance by Daniel Mauler on behalf of All Defendants (Mauler, Daniel) (Entered: 10/03/2018)
35 Consent MOTION for Extension of Time to Respond to Complaint by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Mauler, Daniel) (Entered: 10/03/2018)
36 PAPERLESS ORDER GRANTING 35 consent motion for extension of time. Defendants' response to Plaintiffs' complaint is now due by December 10, 2018. Signed by Judge Deborah K. Chasanow on 10/3/2018. (Chasanow, Deborah) (Entered: 10/03/2018)
37 Consent MOTION for Extension of Time to Respond to Complaint by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Mauler, Daniel) (Entered: 12/03/2018)
38 PAPERLESS ORDER GRANTING 37 consent motion for extension of time. Defendants' response to Plaintiffs' complaint is now due by December 24, 2018. Signed by Judge Deborah K. Chasanow on 12/4/2018. (Chasanow, Deborah) (Entered: 12/04/2018)

12/21/2018
12/24/2018 12/24/2018
12/31/2018 01/02/2019 01/25/2019 01/25/2019 02/01/2019 02/01/2019

39 Consent MOTION for Leave to File Excess Pages regarding Defendants' Response to the Complaint by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Mauler, Daniel) (Entered: 12/21/2018)
40 MOTION to Dismiss for Lack of Jurisdiction by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma(Mauler, Daniel) (Entered: 12/24/2018)
41 Memorandum re 40 MOTION to Dismiss for Lack of Jurisdiction (Memorandum in Support) filed by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma. (Attachments: # 1 Affidavit (Declaration of Jeff Wu))(Mauler, Daniel) (Entered: 12/24/2018)
42 Consent MOTION for Extension of Time to Amend 1

Complaint, by City of Chicago, City of Cincinnati, City of Columbus, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra (Attachments: # 1 Text of Proposed Order)(Grogg, Adam) (Entered: 12/31/2018)

43 PAPERLESS ORDER GRANTING 42 consent motion for extension of time. Plaintiffs' deadline to file an amended complaint is now extended to January 25, 2019. Signed by Judge Deborah K. Chasanow on 1/2/2019. (Chasanow, Deborah) (Entered: 01/02/2019)

AMENDED COMPLAINT against All Defendants, filed by Bonnie

44

Morgan, City of Cincinnati, Mayor and City Council Of Baltimore,

City of Chicago, City of Columbus, Stephen Vondra, City of

Philadelphia. (Attachments: # 1 Adam) (Entered: 01/25/2019)

Attachment redline)(Grogg,

45 Local Rule 103.3 Disclosure Statement by City of Philadelphia (Grogg, Adam) (Entered: 01/25/2019)

46 Consent MOTION for Extension of Time to Respond to Amended Complaint by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Mauler, Daniel) (Entered: 02/01/2019)

47 PAPERLESS ORDER GRANTING 46 consent motion for extension of time. Defendants' response to Plaintiffs' amended complaint is

02/25/2019 02/26/2019 03/06/2019 03/07/2019 03/08/2019 03/13/2019
03/13/2019 04/16/2019

now due by March 1, 2019. Signed by Judge Deborah K. Chasanow on 2/1/2019. (Chasanow, Deborah) (Entered: 02/01/2019)
48 Consent MOTION for Extension of Time to Respond to Amended Complaint by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Moore, Tamra) (Entered: 02/25/2019)
49 PAPERLESS ORDER GRANTING 48 consent motion for extension of time. Defendants' response to Plaintiffs' amended complaint is now due by March 8, 2019. Signed by Judge Deborah K. Chasanow on 2/26/2019. (Chasanow, Deborah) (Entered: 02/26/2019)
50 Consent MOTION for Leave to File Excess Pages by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Moore, Tamra) (Entered: 03/06/2019)
51 PAPERLESS ORDER GRANTING 50 consent motion to exceed page limit. The memorandum in support of Defendants' response to Plaintiffs' complaint is limited to 62 pages. Signed by Judge Deborah K. Chasanow on 3/7/2019. (Chasanow, Deborah) (Entered: 03/07/2019)
52 MOTION to Dismiss for Lack of Jurisdiction , MOTION to Dismiss for Failure to State a Claim by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Memorandum in Support, # 2 Second Declaration of Jeff Wu)(Moore, Tamra) (Entered: 03/08/2019)
53 Consent MOTION for Extension of Time to File Response/Reply as to 52 MOTION to Dismiss for Lack of Jurisdiction MOTION to Dismiss for Failure to State a Claim by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra (Attachments: # 1 Text of Proposed Order)(Grogg, Adam) (Entered: 03/13/2019)
54 PAPERLESS ORDER GRANTING 53 consent motion for extension of time. Plaintiffs' response to 52 motion to dismiss is now due by May 1, 2019. Signed by Judge Deborah K. Chasanow on 3/13/2019. (Chasanow, Deborah) (Entered: 03/13/2019)
55 Consent MOTION for Extension of Time to File Response/Reply as to 52 MOTION to Dismiss for Lack of Jurisdiction MOTION to Dismiss for Failure to State a Claim by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City

04/16/2019 05/07/2019 05/28/2019 05/28/2019
05/28/2019 05/31/2019
05/31/2019
06/07/2019 06/07/2019

Council Of Baltimore, Bonnie Morgan, Stephen Vondra (Attachments: # 1 Text of Proposed Order)(Grogg, Adam) (Entered: 04/16/2019)

56 PAPERLESS ORDER GRANTING 55 consent motion for extension of time. Plaintiffs' response to 52 motion to dismiss is now due by May 31, 2019. Signed by Judge Deborah K. Chasanow on 4/16/2019. (Chasanow, Deborah) (Entered: 04/16/2019)

57 NOTICE to Substitute Attorney (Wyer, Kathryn) (Entered: 05/07/2019)

58 Consent MOTION for Leave to File Excess Pages by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra (Attachments: # 1 Text of Proposed Order)(Grogg, Adam) (Entered: 05/28/2019)

59 PAPERLESS ORDER granting 58 consent motion to extend page limitation. Counsel is urged to use prudence and observe Local Rule 105.3 in all other respects but may have up to 70 pages when responding to Defendants' motion to dismiss Plaintiffs' amended complaint. Signed by Judge Deborah K. Chasanow on 5/28/2019. (Chasanow, Deborah) (Entered: 05/28/2019)

60 MOTION to Appear Pro Hac Vice for Nimrod Pitsker Elias (Filing fee $100, receipt number 0416-8036885.) by State of California(Nannery, Valerie) (Entered: 05/28/2019)

RESPONSE in Opposition re 52 MOTION to Dismiss for Lack of

61

Jurisdiction MOTION to Dismiss for Failure to State a Claim filed

by City of Chicago, City of Cincinnati, City of Columbus, City of

Philadelphia, Mayor and City Council Of Baltimore, Bonnie

Morgan, Stephen Vondra. (Attachments: # 1 Exhibit,

# 2 Exhibit)(Grogg, Adam) (Entered: 05/31/2019)

62 PAPERLESS ORDER granting 60 Motion to Appear Pro Hac Vice on behalf of Nimrod Elias. Directing attorney Nimrod Elias to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 5/31/2019. (srd, Deputy Clerk) (Entered: 05/31/2019)

63 NOTICE of Appearance by Megan Barbero on behalf of United States House of Representatives (Barbero, Megan) (Entered: 06/07/2019)

64 NOTICE of Appearance by Douglas Letter on behalf of United States House of Representatives (Letter, Douglas) (Entered: 06/07/2019)

06/07/2019 06/07/2019
06/07/2019
06/07/2019 06/07/2019 06/07/2019

65 Consent MOTION for Leave to File Amicus Brief by United States House of Representatives (Attachments: # 1 Exhibit Proposed Amicus Brief, # 2 Text of Proposed Order)(Gorod, Brianne) (Entered: 06/07/2019)
66 MOTION for Leave to File Brief of Amici Curiae 13 Counties and Cities in Support of Plaintiffs' Opposition to Defendants' Motion to Dismiss by Montgomery County, Maryland, County of Santa Clara, California, City of Berkeley, California, Cook County, Illinois, City of Dayton, Ohio, City of Los Angeles, California, City of Minneapolis, Minnesota, City of Oakland, California, City of Saint Paul, Minnesota, City and County of San Francisco, California, City of Seattle, Washington, Shelby County, Tennessee, Travis County, Texas (Attachments: # 1 Attachment Amicus Brief of 13 Counties and Cities in Support of Plaintiffs' Opposition to Defendants' Motion to Dismiss, # 2 Text of Proposed Order)(Lattner, Edward) (Entered: 06/07/2019)
67 Consent MOTION for Leave to File AS AMICI CURIAE, IN SUPPORT OF PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION TO DISMISS PLAINTIFFS AMENDED COMPLAINT by Families USA, Community Catalyst, National Health Law Program, Service Employees International Union (Attachments: # 1 Exhibit A [BRIEF OF FAMILIES USA, COMMUNITY CATALYST, THE NATIONAL HEALTH LAW PROGRAM, AND SERVICE EMPLOYEES INTERNATIONAL UNION AS AMICI CURIAE, IN SUPPORT OF PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION TO DISMISS PLAINTIFFS AMENDED COMPLAINT], # 2 Exhibit B [TEXT OF PROPOSED ORDER granting MOTION OF FAMILIES USA, COMMUNITY CATALYST, THE NATIONAL HEALTH LAW PROGRAM, AND SERVICE EMPLOYEES INTERNATIONAL UNION TO FILE AS AMICI CURIAE, IN SUPPORT OF PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION TO DISMISS PLAINTIFFS AMENDED COMPLAINT])(Kolker, Peter) (Entered: 06/07/2019)
68 MOTION to Appear Pro Hac Vice for William B. Schultz (Filing fee $100, receipt number 0416-8060065.) by Community Catalyst, Families USA, National Health Law Program, Service Employees International Union(Kolker, Peter) (Entered: 06/07/2019)
69 MOTION to Appear Pro Hac Vice for Paul Wolfson (Filing fee $100, receipt number 0416-8060010.) by Henry J. Aaron(Cedarbaum, Jonathan) (Entered: 06/07/2019)
70 MOTION to Appear Pro Hac Vice for Margaret M. Dotzel (Filing fee $100, receipt number 0416-8060106.) by Community Catalyst, Families USA, National Health Law Program, Service Employees International Union(Kolker, Peter) (Entered: 06/07/2019)

06/07/2019 06/07/2019
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06/11/2019 06/11/2019

71 MOTION for Leave to File Brief as Amicus Curiae by Henry J. Aaron (Attachments: # 1 Exhibit 1 Brief, # 2 Exhibit 2 Proposed Order)(Cedarbaum, Jonathan) (Entered: 06/07/2019)

Memorandum re 52 MOTION to Dismiss for Lack of

72

Jurisdiction MOTION to Dismiss for Failure to State a Claim Brief

for Amici Curiae States of California, Connecticut, Delaware,

Hawaii, Illinois, Kentucky, Maryland, Massachusetts, Michigan,

Minnesota, Nevada, New Mexico, New York, Oregon, Pennsylvania,

Rhode Island, Vermont, Virginia, Washington, and the District of

Columbia In Support of Plaintiffs Opposition to Defendants Motion

to Dismiss filed by State of California.(Elias, Nimrod) (Entered:

06/07/2019)

73 NOTICE of Appearance by Matthew David Slater on behalf of Joshua Peck (Slater, Matthew) (Entered: 06/07/2019)

74 MOTION to Appear Pro Hac Vice for Alexis Collins (Filing fee $100, receipt number 0416-8060680.) by Joshua Peck(Slater, Matthew) (Entered: 06/07/2019)

75 MOTION to Appear Pro Hac Vice for Alexander Galicki (Filing fee $100, receipt number 0416-8060683.) by Joshua Peck(Slater, Matthew) (Entered: 06/07/2019)

76 MOTION for Leave to File Brief of Amicus Curiae Joshua Peck in Support of Plaintiffs' Opposition to Defendants' Motion to Dismiss Plaintiffs' Amended Complaint by Joshua Peck (Attachments: # 1 Exhibit 1 - Proposed Amicus Brief with exhibits, # 2 Text of Proposed Order)(Slater, Matthew) (Entered: 06/07/2019)

77 MOTION to Appear Pro Hac Vice for Jessica Hollis (Filing fee $100, receipt number 0416-8061778.) by Joshua Peck(Slater, Matthew) (Entered: 06/10/2019)

78 Consent MOTION for Extension of Time to File Response/Reply as to 52 MOTION to Dismiss for Lack of Jurisdiction MOTION to Dismiss for Failure to State a Claim by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn) (Entered: 06/10/2019)

79 PAPERLESS ORDER GRANTING 78 consent motion for extension of time. Defendants' reply to 52 motion to dismiss is now due by August 21, 2019. Signed by Judge Deborah K. Chasanow on 6/11/2019. (Chasanow, Deborah) (Entered: 06/11/2019)

80 PAPERLESS ORDER granting 68 Motion to Appear Pro Hac Vice on behalf of William B Schultz. Attorney William B Schultz will receive a separate email with the previously issued CM/ECF login

06/11/2019 06/11/2019 06/11/2019 06/11/2019 06/11/2019 07/29/2019 07/30/2019 08/12/2019

and password. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
81 PAPERLESS ORDER granting 69 Motion to Appear Pro Hac Vice on behalf of Paul Reinherz Q Wolfson. Attorney Paul Reinherz Q Wolfson will receive a separate email with the previously issued CM/ECF login and password. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
82 PAPERLESS ORDER granting 70 Motion to Appear Pro Hac Vice on behalf of Margaret Dotzel. Directing attorney Margaret Dotzel to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
83 PAPERLESS ORDER granting 74 Motion to Appear Pro Hac Vice on behalf of Alexis Collins. Directing attorney Alexis Collins to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
84 PAPERLESS ORDER granting 75 Motion to Appear Pro Hac Vice on behalf of Alexander Galicki. Directing attorney Alexander Galicki to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
85 PAPERLESS ORDER granting 77 Motion to Appear Pro Hac Vice on behalf of Jessica Hollis. Directing attorney Jessica Hollis to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 6/11/2019. (srd, Deputy Clerk) (Entered: 06/11/2019)
86 MOTION to Withdraw as Attorney / Motion for Leave to Withdraw Alexander Galicki as Counsel by Joshua Peck (Attachments: # 1 Text of Proposed Order)(Slater, Matthew) (Entered: 07/29/2019)
87 PAPERLESS ORDER GRANTING 86 Motion to Withdraw as Attorney. Attorney Alexander Galicki terminated. Signed by Judge Deborah K. Chasanow on 7/30/2019. (Chasanow, Deborah) (Entered: 07/30/2019)
88 MOTION to Withdraw as Attorney by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra

08/12/2019 08/19/2019 08/21/2019 08/21/2019
09/27/2019 10/03/2019 10/11/2019 10/11/2019 10/14/2019 12/06/2019

(Attachments: # 1 Text of Proposed Order)(Grogg, Adam) (Entered: 08/12/2019)

89 PAPERLESS ORDER GRANTING 88 Motion to Withdraw as Attorney. Attorney Adam Grogg terminated. Signed by Judge Deborah K. Chasanow on 8/12/2019. (Chasanow, Deborah) (Entered: 08/12/2019)

Consent MOTION for Leave to File Excess Pages by Alex M. Azar,

90

II, Centers for Medicare and Medicaid Services, Donald J. Trump,

United States Department of Health and Human Services, Seema

Verma (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn)

(Entered: 08/19/2019)

91 PAPERLESS ORDER GRANTING 90 consent motion to expand page limit for reply in support of Defendants' motion to dismiss to 40 pages. Signed by Judge Deborah K. Chasanow on 8/21/2019. (Chasanow, Deborah) (Entered: 08/21/2019)

REPLY to Response to Motion re 52 MOTION to Dismiss for Lack

92

of Jurisdiction MOTION to Dismiss for Failure to State a

Claim filed by Alex M. Azar, II, Centers for Medicare and Medicaid

Services, Donald J. Trump, United States Department of Health and

Human Services, Seema Verma.(Wyer, Kathryn) (Entered:

08/21/2019)

93 NOTICE by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra of Supplemental Authority (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Lewis, John) (Entered: 09/27/2019)

94 NOTICE by Alex M. Azar, II, Centers for Medicare and Medicaid Services, Donald J. Trump, United States Department of Health and Human Services, Seema Verma re 93 Notice (Other), (Wyer, Kathryn) (Entered: 10/03/2019)

95 NOTICE of Appearance by Michael K Addo on behalf of State of California (Addo, Michael) (Entered: 10/11/2019)

96 MOTION to Withdraw as Attorney by State of California (Attachments: # 1 Text of Proposed Order)(Nannery, Valerie) (Entered: 10/11/2019)

97 PAPERLESS ORDER GRANTING 96 Motion to Withdraw as Attorney. Attorney Valerie M. Nannery terminated. Signed by Judge Deborah K. Chasanow on 10/14/2019. (Chasanow, Deborah) (Entered: 10/14/2019)

98 NOTICE by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie

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04/21/2020
08/09/2020 08/13/2020

Morgan, Stephen Vondra of withdrawal of counsel (Lewis, John) (Entered: 12/06/2019)

99 NOTICE of Appearance by Jane Hannah Lewis on behalf of Mayor and City Council Of Baltimore (Lewis, Jane) (Entered: 03/23/2020)

100 MOTION to Withdraw as Attorney by Mayor and City Council Of Baltimore (Attachments: # 1 Text of Proposed Order)(Lewis, Jane) (Entered: 03/23/2020)

101 PAPERLESS ORDER GRANTING 100 Motion to Withdraw as Attorney. Attorney Andre M. Davis terminated. Signed by Judge Deborah K. Chasanow on 3/23/2020. (Chasanow, Deborah) (Entered: 03/23/2020)

MEMORANDUM OPINION. Signed by Judge Deborah K.

102

Chasanow on 4/10/2020. (sat, Chambers) (Entered: 04/10/2020)

103 ORDER GRANTING IN PART and DENYING IN PART 52 motion to dismiss, DISMISSING Count II of the amended complaint, and GRANTING 65 , 66 , 67 , 71 , and 76 motions for leave to file memoranda as amici curiae. Signed by Judge Deborah K. Chasanow on 4/10/2020. (sat, Chambers) (Entered: 04/10/2020)

Joint MOTION for Leave to File Excess Pages , Joint MOTION for

104

Other Relief [for Agreed Upon Scheduling Order] by Alex M. Azar,

II, Centers for Medicare and Medicaid Services, Donald J. Trump,

United States Department of Health and Human Services, Seema

Verma (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn)

(Entered: 04/21/2020)

105 PAPERLESS ORDER GRANTING 104 joint motion for the entry of an agreed-upon schedule and for an enlargement of page limitations. The administrative record pertaining to the 2019 Rule is due by June 17, Plaintiffs' motion for summary judgment, limited to 60 pages, is due by August 13, Defendants' consolidated opposition and cross-motion for summary judgment, limited to 60 pages, is due by September 17, Plaintiffs' consolidated reply and opposition, limited to 40 pages, is due by October 15, and Defendants' reply, limited to 40 pages, is due by November 12, 2020. Any prospective amici will file their motions to participate with accompanying brief by October 1, 2020. Signed by Judge Deborah K. Chasanow on 4/21/2020. (Chasanow, Deborah) (Entered: 04/21/2020)

106 NOTICE of Change of Address by Sara Kropf (Kropf, Sara) (Entered: 08/09/2020)

107 NOTICE of Appearance by Stephen William Miller on behalf of City of Chicago, City of Cincinnati, City of Columbus, Mayor and

08/13/2020
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08/20/2020 09/14/2020

City Council Of Baltimore, Bonnie Morgan, Stephen Vondra (Miller, Stephen) (Entered: 08/13/2020)
108 MOTION for Summary Judgment by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra. (Attachments: # 1 Memorandum in Support, # 2 Request for Judicial Notice and Exhibits, # 3 Arwady Declaration, # 4 Dzirasa Declaration, # 5 Hinckley Declaration, # 6 Johnson Declaration, # 7 Matz Declaration, # 8 Muething Declaration, # 9 Vondra Declaration, # 10 Young Declaration, # 11 Text of Proposed Order)(Lewis, John) (Entered: 08/13/2020)
109 NOTICE of Appearance by Jimmy Rock on behalf of State of California (Rock, Jimmy) (Entered: 08/13/2020)
110 MOTION to Appear Pro Hac Vice for Richard Coglianese (Filing fee $100, receipt number 0416-8807383.) by City of Columbus(Kropf, Sara) (Entered: 08/13/2020)
111 MOTION to Appear Pro Hac Vice for Sean A. Lev (Filing fee $100, receipt number 0416-8811591.) by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra(Kropf, Sara) (Entered: 08/17/2020)
112 PAPERLESS ORDER granting 110 Motion to Appear Pro Hac Vice on behalf of Richard N Coglianese. Directing attorney Richard N Coglianese to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-case-filing-registration. Signed by Clerk on 8/17/2020. (srds, Deputy Clerk) (Entered: 08/17/2020)
113 PAPERLESS ORDER granting 111 Motion to Appear Pro Hac Vice on behalf of Sean A Lev. Directing attorney Sean A Lev to use the attorney's existing CM/ECF login and password previously issued in this Court. The account password can be reset at http://www.mdd.uscourts.gov/electronic-case-filing-password-reset. Signed by Clerk on 8/20/2020. (srds, Deputy Clerk) (Entered: 08/20/2020)
114 NOTICE of filing Administrative Record by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Administrative Record Part 1, # 2 AR Part 2, # 3 AR Part 3, # 4 AR Part 4, # 5 AR Part 5)(Wyer, Kathryn) (Entered: 08/20/2020)
115 Consent MOTION for Extension of Time by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States

09/14/2020 09/28/2020 09/28/2020 09/29/2020
09/29/2020

Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn) (Entered: 09/14/2020)
116 PAPERLESS ORDER GRANTING 115 consent motion to amend briefing schedule. Defendants' consolidated opposition and crossmotion for summary judgment, limited to 60 pages, is due by September 28, Plaintiffs' consolidated reply and opposition, limited to 40 pages, is due by October 26, and Defendants' reply, limited to 40 pages, is due by November 23, 2020. Any prospective amici will file their motions to participate with accompanying brief by October 26, 2020. Signed by Judge Deborah K. Chasanow on 9/14/2020. (Chasanow, Deborah) (Entered: 09/14/2020)
117 [FILED IN ERROR] RESPONSE in Opposition re 108 MOTION for Summary Judgment filed by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, Seema Verma. (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn) Modified on 9/29/2020 (dg3s, Deputy Clerk). (Entered: 09/28/2020)
118 Response in Opposition re 108 MOTION for Summary Judgment and Cross MOTION for Summary Judgment by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Memorandum in Support, # 2 Text of Proposed Order)(Wyer, Kathryn) Modified on 9/29/2020 (dg3s, Deputy Clerk). (Entered: 09/28/2020)
119 PAPERLESS ORDER: When the court set the briefing schedule, Defendants were provided until September 28 to file a consolidated opposition and cross motion that was limited to 60 pages (ECF No. 116). In response to Plaintiffs' motion for summary judgment, Defendants separately filed an opposition (ECF No. 117) and a cross-motion for summary judgment (ECF No. 118). Each nearly reaches the 60 page limit by itself. Defendants ARE DIRECTED to refile a single consolidated opposition and cross-motion, limited to 60 pages, by October 6. The date by which Plaintiffs may file their consolidated reply and opposition, limited to 40 pages, is extended to November 2, and Defendants' reply, limited to 40 pages, is due by November 30, 2020. Signed by Judge Deborah K. Chasanow on 9/29/2020. (Chasanow, Deborah) (Entered: 09/29/2020)
120 ORDER RESCINDING 119 the adjustment to the briefing schedule and DIRECTING the clerk to regenerate the electronic notification for ECF No. 118 as an opposition to Plaintiffs' motion for summary judgment and a cross-motion for summary judgment and to mark ECF No. 117 as filed in error and break the link to that document.

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Signed by Judge Deborah K. Chasanow on 9/29/2020. (sat, Chambers) (Entered: 09/29/2020)
121 REPLY to Response to Motion re 108 MOTION for Summary Judgment , 118 Cross MOTION for Summary Judgment , RESPONSE in Opposition filed by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra.(Lewis, John) (Entered: 10/26/2020)
122 MOTION for Leave to File Brief For Amici Curiae Shriver Center on Poverty Law, Planned Parenthood Federation of America, the National Health Law Program, the Asian & Pacific Islander American Health Forum, the Association of Asian Pacific Community Health Organizations, and Families USA by Russell Paul Hanser, Shriver Center et al. (Attachments: # 1 Attachment, # 2 Attachment)(Hanser, Russell) (Entered: 10/26/2020)
123 Consent MOTION for Leave to File BRIEF OF AMICUS CURIAE YOUNG INVINCIBLES IN SUPPORT OF PLAINTIFFS MOTION FOR SUMMARY JUDGMENT by Young Invincibles (Attachments: # 1 Exhibit Brief, # 2 Exhibit Proposed Order)(Guest, Jennifer) (Entered: 10/26/2020)
124 MOTION to Appear Pro Hac Vice for Joel McElvain (Filing fee $100, receipt number 0416-8931286.) by Young Invincibles(Guest, Jennifer) (Entered: 10/26/2020)
125 MOTION to Appear Pro Hac Vice for Ahsin Azim (Filing fee $100, receipt number 0416-8931287.) by Young Invincibles(Guest, Jennifer) (Entered: 10/26/2020)
126 PAPERLESS ORDER granting 124 Motion to Appear Pro Hac Vice on behalf of Joel Lunsford McElvain. Directing attorney Joel Lunsford McElvain to use the attorney's existing CM/ECF login and password previously issued in this Court. The account password can be reset at http://www.mdd.uscourts.gov/electronic-case-filingpassword-reset. Signed by Clerk on 10/29/2020. (srd, Deputy Clerk) (Entered: 10/29/2020)
127 PAPERLESS ORDER granting 125 Motion to Appear Pro Hac Vice on behalf of Ahsin Azim. Directing attorney Ahsin Azim to register online for CM/ECF at http://www.mdd.uscourts.gov/electronic-casefiling-registration. Signed by Clerk on 10/29/2020. (srd, Deputy Clerk) (Entered: 10/29/2020)
128 MOTION to Withdraw as Attorney Suzanne Sangree by Mayor and City Council Of Baltimore (Attachments: # 1 Text of Proposed Order)(Lewis, Jane) (Entered: 11/12/2020)

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129 PAPERLESS ORDER GRANTING 128 Motion to Withdraw as Attorney. Attorney Suzanne Sangree terminated. Signed by Judge Deborah K. Chasanow on 11/12/2020. (Chasanow, Deborah) (Entered: 11/12/2020)
130 Consent MOTION for Extension of Time to File Response/Reply as to 118 Cross MOTION for Summary Judgment by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, Seema Verma (Attachments: # 1 Text of Proposed Order)(Wyer, Kathryn) (Entered: 11/18/2020)
131 PAPERLESS ORDER GRANTING 130 consent motion for extension of time. Defendants' reply to 118 cross-motion for summary judgment is now due by December 8, 2020. Signed by Judge Deborah K. Chasanow on 11/19/2020. (Chasanow, Deborah) (Entered: 11/19/2020)
132 REPLY to Response to Motion re 118 Cross MOTION for Summary Judgment filed by Alex M. Azar, II, Centers for Medicare and Medicaid Services, United States Department of Health and Human Services, Seema Verma.(Wyer, Kathryn) (Entered: 12/08/2020)
133 NOTICE by City of Chicago, City of Cincinnati, City of Columbus, City of Philadelphia, Mayor and City Council Of Baltimore, Bonnie Morgan, Stephen Vondra of Filing Joint Appendix (Attachments: # 1 Joint Appendix Part 1, # 2 Joint Appendix Part 2, # 3 Joint Appendix Part 3)(Lewis, John) (Entered: 12/22/2020)

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1:18-cv02364-DKC
2.20

 
 Case 1:18-cv-02364-DKC Document 1 Filed 08/02/18 Page 1 of 134

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

CITY OF COLUMBUS 90 W. Broad St. Columbus, OH 43215;
MAYOR AND CITY COUNCIL OF BALTIMORE
100 N. Holliday St., Suite 101 Baltimore, MD 21202;
CITY OF CINCINNATI City Hall, Room 214 801 Plum St. Cincinnati, OH 45202;
CITY OF CHICAGO 121 N. Lasalle St., Room 600 Chicago, IL 60602
STEPHEN VONDRA c/o Democracy Forward Foundation 1333 H St. NW Washington, DC 20005; and
BONNIE MORGAN c/o Democracy Forward Foundation 1333 H St. NW Washington, DC 20005;
Plaintiffs,
vs.
DONALD J. TRUMP, in his official capacity as President of the United States of America,
1600 Pennsylvania Ave. NW Washington, DC 20500;

Case No. 18-cv-2364

Case 1:18-cv-02364-DKC Document 1 Filed 08/02/18 Page 2 of 134
ALEX M. AZAR, II, in his official capacity as Secretary of the United States Department of Health and Human Services,
200 Independence Ave. SW Washington, DC 20201;
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
200 Independence Ave. SW Washington, DC 20201;
SEEMA VERMA, in her official capacity as Administrator of the Centers for Medicare and Medicaid Services,
7500 Security Blvd. Baltimore, MD 21244; and the
CENTERS FOR MEDICARE AND MEDICAID SERVICES
7500 Security Blvd. Baltimore, MD 21244,
Defendants.
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Case 1:18-cv-02364-DKC Document 1 Filed 08/02/18 Page 3 of 134
TABLE OF CONTENTS
NATURE OF THE ACTION ......................................................................................................... 4 JURISDICTION AND VENUE ..................................................................................................... 7 PARTIES ........................................................................................................................................ 7 FACTS ............................................................................................................................................ 9
I. The Individual Health Insurance Markets and the Affordable Care Act ................ 9 II. The Administration’s Intent to Repeal the ACA, With or Without Congress ...... 17 DEFENDANTS’ EXECUTIVE ACTIONS TO SABOTAGE THE AFFORDABLE CARE ACT........................................................................................................ 28 I. The 2019 Rule....................................................................................................... 29
Eliminating Protections that the ACA Guarantees ................................... 29 1. Permitting Exchanges to Strip Individuals of Eligibility for
Tax Credits Without Providing Direct Notification...................... 29 2. Outsourcing to States the Compliance Review of Insurance
Plans to be Offered on Federal Exchanges ................................... 32 3. Reducing Oversight of Insurance Brokers Participating in
Direct Enrollment.......................................................................... 35 Deterring Americans from Enrolling in Quality Health Insurance Plans .......................................................................................................... 37 1. Making It Harder to Compare Insurance Plans............................. 37 2. Undermining the Navigator Program............................................ 39 3. Making Small Business Exchanges Less User-Friendly .............. 42 4. Imposing Unnecessary Income Verification Requirements ......... 43 Driving Up Costs ...................................................................................... 46 1. Exacerbating Risk Selection ......................................................... 46 2. Curtailing Review of Insurance Rate Increases ............................ 49 3. Reducing Rebates for Poor Insurer Performance.......................... 52 II. Additional Executive Actions Demonstrating Defendants’ Violation of Their Constitutional Duty to Faithfully Execute the ACA ................................... 55 Directing Agencies to Sabotage the Act ................................................... 55 Attempting to Destabilize the Exchanges ................................................. 57 1. Promoting Bare-Bones Plans to Try to Weaken
ACA Exchanges............................................................................ 61 2. Undermining the Individual Mandate ........................................... 65

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3. Refusing to Grant State Waiver Requests that Would Further the ACA’s Goals .............................................................. 68
4. Attempting to Weaken Public Confidence in ACA Exchanges.... 70 Working to Decrease Enrollment.............................................................. 73 1. Shortening Open Enrollment ........................................................ 74 2. Cutting Funding for Advertising and Refusing to
Publicize Open Enrollment ........................................................... 77 3. Cutting Funding for Navigators and Encouraging Them to
Undermine the Act ........................................................................ 82 4. Refusing to Participate in Enrollment Events and
Other Outreach.............................................................................. 88 Refusing to Defend the Act....................................................................... 89 DEFENDANTS’ UNLAWFUL ACTIONS ARE HARMING PLAINTIFFS ............................. 91 I. Defendants’ Unlawful Actions Are Causing Premiums to Rise and the Rate of the Uninsured to Increase ............................................................ 91 II. Defendants’ Unlawful Actions Harm the City Plaintiffs by Forcing Them to Spend More on Uncompensated Care....................................... 96 Columbus, Ohio ...................................................................................... 102 Baltimore, Maryland ............................................................................... 106 Cincinnati, Ohio ...................................................................................... 111 Chicago, Illinois ...................................................................................... 114 III. Defendants’ Unlawful Actions Harm the Individual Plaintiffs by Making Insurance Coverage Harder and More Expensive to Procure ............................. 118 CLAIMS FOR RELIEF .............................................................................................................. 124 Count One (Violation of the Administrative Procedure Act) ......................................... 124 Count Two (Violation of the Take Care Clause) ............................................................ 126 PRAYER FOR RELIEF ............................................................................................................. 126
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Plaintiffs the City of Columbus, Ohio, the Mayor and City Council of Baltimore, Maryland, the City of Cincinnati, Ohio, the City of Chicago, Illinois, Stephen Vondra, and Bonnie Morgan hereby sue Defendants Donald J. Trump, in his official capacity as President of the United States of America, Alex M. Azar, II, in his official capacity as Secretary of the United States Department of Health and Human Services, the United States Department of Health and Human Services, Seema Verma, in her official capacity as Administrator of the Centers for Medicare and Medicaid Services, and the Centers for Medicare and Medicaid Services, and allege as follows:
1. Having failed to persuade Congress to repeal the Affordable Care Act, President Trump and his Administration are waging a relentless campaign to sabotage and, ultimately, to nullify the law. President Trump has repeatedly admitted as much: because Congress rejected his demand to have “Obamacare repealed,” he has said, he decided “to go a different route” and “end[] Obamacare” through his own actions. To that end, President Trump and his Administration are deliberately trying to make the Act fail. They are discouraging Americans from enrolling in comprehensive plans that protect them against debilitating medical expenses. They are working to raise prices and reduce choices for Americans seeking insurance in the Act’s exchanges. And they are misappropriating funds Congress allocated to support the Act, instead using those funds to attack it. The Trump Administration’s strategy: to deceptively shift the blame from their own actions to the Act itself. Their objective: to pressure Congress to repeal the Act or, if that fails, to achieve de facto repeal through executive action alone. The Administration’s actions are unlawful.
2. The scope of this Complaint is testament to the breadth and persistence of the Trump Administration’s efforts to undermine the Affordable Care Act (“ACA”). As Plaintiffs—

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individuals and cities representing almost 4.5 million Americans—allege in detail below, the Administration has tried to prevent families from obtaining health insurance through the ACA’s exchanges by, for example:
 promoting insurance that does not comply with the ACA’s requirements, including insurance that does not cover preexisting conditions;
 slashing funding for outreach strategies that have been proven to encourage individuals, and healthy individuals in particular, to sign up for coverage;
 misusing federal funds for advertising campaigns aimed at smearing the ACA and its exchanges, and spinning false narratives about the efficacy and success of the Act;
 providing individuals and families with less time to choose a plan that is appropriate for them; and
 imposing unnecessary and onerous documentation requirements, making enrollment even harder.
In addition, the Administration has worked to increase premiums for ACA-compliant insurance by, for example, shirking oversight of insurance rate increases and reducing rebates owed to consumers when insurers underperform. Finally, the Administration has attempted to make affordable, high-quality health insurance unavailable by sowing uncertainty in insurance markets, causing insurers to raise rates or exit markets altogether.
3. President Trump and his Administration have been remarkably transparent about their intent and their approach. “If we don’t get it done” in Congress, President Trump has said, “we are going to watch Obamacare go down the tubes, and we’ll blame the Democrats . . . [a]nd at some point, they are going to come and say, ‘You’ve got to help us.’” “[W]e are getting rid of Obamacare,” President Trump has boasted, “essentially, we have gotten rid of it,” “[i]t’s dead[,] [i]t’s essentially dead,” “there is no Obamacare, it’s dead.” Of course, as a matter of constitutional law, the Affordable Care Act has not been repealed; as a matter of fact, it is not dead, and indeed it has proven more resilient than the Administration might have hoped. But the
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Administration’s death-by-a-thousand-cuts campaign to undermine the Act via executive action alone has taken a toll.
4. All Americans are, quite literally, paying the price. The Trump Administration’s actions are driving insurers out of ACA exchanges, raising premiums, and increasing the population of underinsured and uninsured individuals. Defendants’ actions are therefore imposing significant costs on families and governments nationwide, including Plaintiffs in this case. Specifically, the Trump Administration’s actions force the cities of Columbus, Ohio, Baltimore, Maryland, Cincinnati, Ohio, and Chicago, Illinois, to spend more on uncompensated care for their residents. The Trump Administration’s actions force Steve Vondra and Bonnie Morgan to pay more for the quality health insurance coverage they need—insurance that, for example, covers Steve’s preexisting condition. That is the precise opposite of what Congress intended the ACA to achieve. Congress passed the ACA to make comprehensive health insurance more affordable and to reduce the costs of uncompensated care. The ACA was achieving those aims before the Trump Administration came to power.
5. The Trump Administration’s actions are also an affront to the rule of law: to our constitutional system, under which Congress enacts laws and the President faithfully implements them. The Administration’s actions raise questions that go to the heart of our structure of government: whether the executive branch must “take care that the laws be faithfully executed,” U.S. Const. art. II, § 3, and whether the Constitution therefore prohibits the President and his appointees from wielding executive power to destroy a duly-enacted law. The Administration’s actions violate the Take Care Clause and the Administrative Procedure Act. They should be declared unlawful and set aside.
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NATURE OF THE ACTION 6. In 2010, the 111th Congress passed, and President Barack Obama signed into law, the Patient Protection and Affordable Care Act.1 In so doing, Congress and the President enacted the ACA into law pursuant to the “single, finely wrought and exhaustively considered[] procedure” set forth in the Constitution. INS v. Chadha, 462 U.S. 919, 951 (1983) (citing U.S. Const. art. I, §§ 1, 7). Under the Constitution, the ACA remains law unless Congress and the President revise or repeal it by that same procedure. Until then, President Trump and his Administration must “take care that the law[] be faithfully executed.” U.S. Const. art. II, § 3. 7. Defendants have not only neglected this obligation: they have defied it. Having campaigned on a promise to secure the ACA’s repeal but having failed to convince Congress to take that step, President Trump has turned to executive action alone to try to sabotage the law. Whereas the ACA is “designed to expand coverage in the individual health insurance market,” King v. Burwell, 135 S. Ct. 2480, 2485 (2015) (emphasis added), Defendants—by regulation, executive order, and otherwise—are obstructing individuals’ access to that market, purposefully attempting to destabilize it, laboring to increase insurance premiums and decrease enrollment, and using resources that Congress has provided to support the law in their blatant attempts to undermine it. 8. The executive actions challenged here have been undertaken to thwart the ACA’s goals and try to make the law fail. They are therefore “incompatible with the expressed . . . will of Congress,” such that the Executive’s “power is at its lowest ebb” and judicial scrutiny is at its
1 See Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended, Health Care Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010). The Affordable Care Act is also known as “Obamacare.”
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most strict, “for what is at stake is the equilibrium established by our constitutional system.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 637-38 (1952) (Jackson, J., concurring). President Trump may well believe, as he has repeatedly stated, that “[t]he best thing politically is to let [the ACA] explode.”2 But in acting on that intention—by neglecting to faithfully implement the ACA and affirmatively taking numerous executive actions to sabotage it— President Trump and his Administration have violated the Administrative Procedure Act, 5 U.S.C. § 706, and the Take Care Clause, U.S. Const. art. II, § 3.
9. At issue here are a final rule and a long list, ever-growing, of other executive actions, all undertaken by the Trump Administration to undermine the ACA.
10. The final rule is the Centers for Medicare & Medicaid Service’s Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (April 17, 2018), referenced here as the “2019 Rule” as it governs many aspects of ACA insurance markets for the 2019 plan year. The 2019 Rule implements a number of changes, detailed below, that increase the cost of health coverage and impose other barriers to enrollment. These changes lack adequate justification and, in some instances, violate the Affordable Care Act’s text; they are therefore “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A), and must be “[held] unlawful and set aside,” id. § 706(2).
11. The 2019 Rule’s unlawful changes are also evidence of Defendants’ failure to comply with their duty under the Constitution to “take care that the [Affordable Care Act] be faithfully executed.” U.S. Const. art. II, § 3.
2 Amy Goldstein & Juliet Eilperin, Affordable Care Act Remains ‘Law of the Land,’ but Trump Vows to Explode It, Washington Post, Mar. 24, 2017, https://www.washingtonpost.com/national/health-science/affordable-care-act-remains-law-ofthe-land-but-trump-vows-to-explode-it/2017/03/24/4b7a2530-10c3-11e7-ab0707d9f521f6b5_story.html.
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12. The 2019 Rule does not stand alone. A slew of executive actions, starting with the very first executive order President Trump issued on the day of his inauguration and continuing through the present, further confirms Defendants’ failure to heed the obligations that the Take Care Clause imposes. Unquestionably, “[t]he Constitution does not confer upon [the President] any power to enact laws or to suspend or repeal such as the Congress enacts.” United States v. Midwest Oil Co., 236 U.S. 459, 505 (1915). Rather, “[u]nder our system of government, Congress makes laws and the President, acting at times through agencies . . . ‘faithfully execute[s]’ them.” Util. Air Regulatory Grp. v. Envtl. Prot. Agency, 134 S. Ct. 2427, 2446 (2014) (quoting U.S. Const. art. II, § 3) (final alteration in original).3 That principle, embodied in the Take Care Clause, is as fundamental as it is longstanding. Just as courts “cannot interpret federal statutes to negate their own stated purposes,” King, 135 S. Ct. at 2493, the President cannot “implement” a federal statute in ways designed to destroy it. This is precisely what President Trump and his Administration are doing. By actively and avowedly wielding executive authority to sabotage the ACA, Defendants are not acting in good faith; instead, they have usurped Congress’s lawmaking function, and they are violating the Constitution.
13. This Court must intervene. For the reasons set forth below, this Court should declare that Defendants have violated the Administrative Procedure Act and failed to fulfill their constitutional duty to faithfully execute the Affordable Care Act, enjoin Defendants’ attempts to
3 See Brief for the Cato Institute, Professor Randy E. Barnett, and Professor Jeremy Rabkin as Amici Curiae Supporting Respondents at 10, United States v. Texas, 136 S. Ct. 2271 (2016) (No. 15-674), https://object.cato.org/sites/cato.org/files/pubs/pdf/texas-v-us-sup-ct-final-2.pdf (“It bears emphasis how strong the language of the Take Care Clause is. It is pitched at the highest register of constitutional obligation. The president shall—not may. He shall take care—not merely attempt. He shall take care that the laws be executed—not merely obeyed. And he shall take care that they are executed faithfully. No other constitutional provision mandates that any branch execute a power in a specific manner. Yet the Constitution mandates that the president execute the laws in a specific way: faithfully.”).
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undermine the ACA, and order them to implement the Act so as to expand, rather than limit, access to quality health insurance.
JURISDICTION AND VENUE 14. This Court has jurisdiction pursuant to 28 U.S.C. § 1331. Plaintiffs’ claim challenging the 2019 Rule is reviewable under the Administrative Procedure Act, 5 U.S.C. §§ 702, 704, 706. As to Plaintiffs’ claim under the Take Care Clause, this Court has authority to issue “equitable relief . . . ‘[to] prevent[] entities from acting unconstitutionally.’” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 491 n.2 (2010) (quoting Correctional Servs. Corp. v. Malesko, 534 U.S. 61, 74 (2001)). 15. Venue is proper in this judicial district under 28 U.S.C. § 1391(e)(1)(A) because Defendants are agencies and officers of the United States and Defendant the Centers for Medicare and Medicaid Services is headquartered in Baltimore, Maryland.
PARTIES 16. Plaintiff the City of Columbus, Ohio, is a municipal corporation organized under Ohio law. See Ohio Const. art. XVIII. Columbus has all the powers of local self-government and home rule under the constitution and laws of the state of Ohio, which are exercised in the manner prescribed by the Charter of the City of Columbus.4 17. Columbus, located in Franklin County, is the capital of Ohio. It is the largest city in the state and the fourteenth largest city in the United States, with a population of over 860,000, according to 2016 Census estimates. Columbus provides a wide range of services on behalf of its residents, including health services for families and children, public health, public assistance, and emergency medical care.
4 See City Code and Charter, City of Columbus, https://www.columbus.gov/council/HelpfulLinks/City-Code-and-Charter; O.R.C. § 715.01.
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18. Plaintiff the Mayor and City Council of Baltimore (“Baltimore”) is a municipal corporation, organized pursuant to Articles XI and XI-A of the Maryland Constitution, and entrusted with all of the powers of local self-government and home rule afforded by those articles.
19. Baltimore is the largest city in Maryland and the thirtieth largest city in the United States, with a population of over 600,000, according to 2016 Census estimates. The Baltimore City Department of Health is a city agency that has wide-ranging responsibilities for providing health services to residents of the city.5
20. Plaintiff the City of Cincinnati, Ohio, is a municipal corporation organized under Ohio law. See Ohio Const. art. XVIII. Cincinnati has all the powers of local self-government and home rule under the constitution and laws of the state of Ohio, which are exercised in the manner prescribed by the Charter of the City of Cincinnati.6
21. Cincinnati, located in Hamilton County, is the third largest city in Ohio and the sixty-fifth largest city in the United States, with a population of around 300,000, according to 2017 Census estimates. Like Columbus, Cincinnati provides a wide range of services on behalf of its residents, including health services for city residents, public health, public assistance, and emergency medical care.
22. Plaintiff the City of Chicago, Illinois, is a municipal corporation and home-rule unit organized and existing under the constitution and laws of the State of Illinois. See Illinois Const. art. VII.
5 See Baltimore City Charter art. VII, §§ 54-56, http://ca.baltimorecity.gov/codes/01%20%20Charter.pdf. 6 See Municipal Code, City of Cincinnati, https://www.cincinnati-oh.gov/council/referencesresources/municipal-code/; O.R.C. § 715.01.
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23. Chicago, located in Cook County, is the largest city in Illinois and the third largest city in the United States, with a population of over 2.7 million, according to 2016 Census estimates. Chicago provides a wide range of services on behalf of its residents, including health services, public assistance, and emergency medical care.
24. Plaintiffs Steve Vondra and Bonnie Madison are a married couple who reside in Charlottesville, Virginia, and who purchase their health insurance on Virginia’s ACA exchange.
25. Defendant Donald J. Trump is sued in his official capacity as President of the United States of America.
26. Defendant Alex M. Azar, II, is sued in his official capacity as Secretary of the United States Department of Health and Human Services.
27. Defendant the United States Department of Health and Human Services (“HHS”) is a federal agency headquartered in Washington, D.C., at 200 Independence Ave. SW, Washington, DC, 20201.
28. Defendant Seema Verma is sued in her official capacity as Administrator of the Centers for Medicare and Medicaid Services.
29. Defendant the Centers for Medicare and Medicaid Services (“CMS”) is a component of Defendant HHS and is headquartered in Baltimore, Maryland, at 7500 Security Boulevard, Baltimore, MD, 21244.
FACTS I. The Individual Health Insurance Markets and the Affordable Care Act
30. Individual health insurance is insurance that individuals purchase themselves, in contrast to, for example, joining employer-sponsored group health plans. Prior to the enactment of the ACA, individual health insurance markets were dysfunctional:
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One reason was that premiums for these policies were increasing more than 10% a year, on average, while the policies themselves had major deficiencies. They often excluded pre-existing conditions, charged higher premiums for people with health risks and for young women, placed limits on annual and lifetime benefits, or refused to renew policies for individuals who became sick. Many people who tried to buy plans were turned down. In 2010, an estimated 9 million adults who had tried to buy a plan in the individual market over the prior three years reported that they were turned down, charged a higher price, or had a condition excluded from their plan because of their health. Faced with unsubsidized premiums and flawed products, the majority of consumers who tried to buy a plan remained uninsured. Only healthy people could get policies, and only those with good incomes could afford the premiums.7
31. As the Supreme Court has explained, many state efforts to reform the individual
health insurance market in the 1990s were unsuccessful. King, 135 S. Ct. at 2485-86. The ACA
“grew out of [this] long history of failed health insurance reform,” id. at 2485, and aims to
achieve systemic improvements in the individual health insurance market by means of certain
key reforms, including:
a. Nondiscrimination on the basis of health status and health history. The
ACA requires “each health insurance issuer that offers health insurance
coverage in the individual . . . market in a State [to] accept
every . . . individual in the State that applies for such coverage,” 42 U.S.C.
§ 300gg-1(a), and bars insurers from charging higher premiums on the
basis of a person’s health, id. § 300gg. ACA-compliant health insurance
therefore covers preexisting conditions; it does not discriminate on the
basis of an individual’s health status and health history. See id. § 300gg-4.
7 David Blumenthal & Sara Collins, Where Both the ACA and AHCA Fall Short, and What the Health Insurance Market Really Needs, Harvard Business Review, Mar. 21, 2017, https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-thehealth-insurance-market-really-needs [hereinafter Blumenthal & Collins].
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b. Essential health benefits. Insurance for individuals and families sold on ACA exchanges must cover “essential health benefits,” id. § 300gg-6(a), including hospitalization, prescription drugs, emergency services, ambulatory patient services, maternity and newborn care, mental health and substance use disorder services, preventive and wellness services, and pediatric services including oral and vision care, see id. § 18022(b)(1). In addition, to protect patients from being confronted with devastating costs when a medical condition exhausts their health coverage, the ACA limits so-called “cost-sharing”—for example, deductibles and copayments—for essential health benefits coverage, and prohibits plans from imposing annual or lifetime limits on such coverage. See id. §§ 300gg6(b), 18022(a)(2), (c).
c. Subsidized coverage. The ACA “seeks to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line.” King, 135 S. Ct. at 2487 (citing 26 U.S.C. § 36B; 42 U.S.C. §§ 18081, 18082). Financial assistance comes through income-related, premium-based tax credits—known as advance premium tax credits, or “APTCs”—for qualified individuals. The Act also requires health insurance issuers to reduce certain individuals’ cost-sharing expenditures and directs HHS to reimburse issuers for such cost-sharing reductions (“CSRs”). See 18 U.S.C. § 18071.
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32. In addition, as enacted, the ACA required individuals to maintain health insurance coverage or make a shared responsibility payment to the Internal Revenue Service. 26 U.S.C. § 5000A. As a result of congressional action in 2017, the shared responsibility payment will be reduced to $0 after December 31, 2018.8 Although it was initially believed that the shared responsibility payment was essential for maintaining the stability of health insurance markets, experience from the ACA’s implementation has indicated that the elimination of the payment will increase premiums for unsubsidized enrollees by 10 percent for 2019 but will not destabilize markets.9
33. To facilitate individuals’ ability to learn about and enroll in the health insurance options that are available to them, the ACA “requires the creation of an ‘Exchange’ in each State where people can shop for insurance, usually online.” King, 135 S. Ct. at 2487 (quoting 42 U.S.C. § 18031(b)(1)). These exchanges, also known as health insurance marketplaces, enable people not eligible for Medicare or Medicaid to obtain adequate, affordable private insurance independent of their jobs. The exchanges remedy a problem that had long bedeviled individual health insurance markets: individuals’ inability to intelligently compare different plans in terms of price and quality. For ease of comparison, the ACA differentiates plans along four standard metallic tiers—bronze, silver, gold, and platinum, from least to most generous—according to
8 Budget Fiscal Year, 2018, Pub. L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (2017) (codified at 26 U.S.C. §§ 5000A, 5000A note). 9 Congressional Budget Office, Repealing the Individual Health Insurance Mandate: An Updated Estimate 1 (Nov. 2017), https://www.cbo.gov/system/files?file=115th-congress-20172018/reports/53300-individualmandate.pdf; Congressional Budget Office, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028 at 2 (May 2018), https://www.cbo.gov/system/files?file=2018-06/53826-healthinsurancecoverage.pdf [hereinafter May 2018 CBO Report].
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how they apportion costs between individuals and issuers. 42 U.S.C. § 18022(d).10 Thus, as the Supreme Court has summarized, an exchange in each state serves as “a marketplace that allows people to compare and purchase” ACA-compliant insurance plans, King, 135 S. Ct. at 2485, known as “qualified health plans” or “QHPs” under the Act, 42 U.S.C. § 18031(b)(1); see id. § 18021(a).
34. Individuals may enroll in qualified health plans on an exchange during a specified annual open enrollment period or, if they qualify on the basis of certain life events—such as getting married, having a baby, or losing other health coverage—they may enroll during a special enrollment period. Id. § 18031(c)(6).11
35. ACA exchanges also help consumers make smart health insurance choices by running call centers and providing in-person assistance. For example, the ACA requires that exchanges award grants to healthcare “Navigators” to “carry out . . . duties” that are specified by statute, id. § 18031(i)(1); see id. § 18031(i)(3), and in HHS implementing regulations, see 45 C.F.R. §§ 155.210, 155.215. By law, Navigators’ essential responsibilities include maintaining a current understanding of available health insurance options, conducting public education and awareness campaigns, helping consumers understand their choices, facilitating consumer health insurance decisions, and ensuring access to consumer protections.
36. An exchange may be established by the state in which it operates or, in states that elect not to establish exchanges, by the federal government. See King, 135 S. Ct. at 2487 (citing
10 See Health Plan Categories, HealthCare.gov, https://www.healthcare.gov/glossary/healthplan-categories/. 11 See Open Enrollment Period, HealthCare.gov, https://www.HealthCare.gov/glossary/openenrollment-period/. The exchanges also offer small businesses a way to find qualified health plans on a platform called the Small Business Health Options Program or “SHOP.” See 42 U.S.C. § 18031(b)(1)(B).
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42 U.S.C. §§ 18031(b)(1), 18041(c)(1)); 45 C.F.R. § 155.105(f)). In 2018, twelve states operate their “state-based exchanges” or “SBEs” (operating their own websites rather than using the federally-run HealthCare.gov), twenty-eight states rely entirely on the federal government to run their “federally-facilitated exchanges” or “FFEs” using HealthCare.gov, and eleven states have hybrid exchanges that assume some, but not all, exchange functions.12 As relevant here, the exchange in Ohio is an FFE, the exchange in Maryland is an SBE, and the exchange in Illinois is a hybrid exchange.
37. The ACA requires that exchanges offer only quality health insurance: insurance that covers preexisting conditions, for example, and that does not impose annual or lifetime dollar limits on core coverage. Such coverage has been found to improve access to care and overall health, and to reduce financial burdens for both individuals and institutions that cover the costs of uncompensated care. But increasing enrollment in quality health insurance coverage is not only the ACA’s immediate goal; it is also key to the Act’s long-term success. “Achieving insurance market stability over time . . . requires robust enrollment.”13 Specifically, “[a]t the overall market level, enrollment must be high enough to reduce random fluctuations in claims from year to year.”14 In addition, “[b]ecause the ACA prohibits health plans from denying coverage or charging higher premiums based on preexisting health conditions, having affordable
12 State Health Insurance Marketplace Types, 2018, Kaiser Family Foundation, https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/; see HHS, Cooperative Agreement to Support Navigators in Federally-facilitated Exchanges: Notice of Funding Opportunity 89 (July 10, 2018), https://www.grantsolutions.gov/gs/preaward/previewPublicAnnouncement.do?id=62537 (click “View PDF”) (listing states that will have an FFE for plan year 2019). 13 Blumenthal & Collins, supra n.7. 14 American Academy of Actuaries, An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes 5 (Jan. 2017), https://www.actuary.org/files/publications/Acad_eval_indiv_mkt_011817.pdf.
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premiums depends on enrolling enough healthy individuals over which the costs of the less-
healthy individuals can be spread. Enrollment of only individuals with high health care
needs . . . can produce unsustainable upward premium spirals.”15
38. Limiting the cost of health insurance is, in turn, essential to promoting increased
enrollment. The Centers for Medicare and Medicaid Services has found that “cost is the top
reason cited” for individuals ending their coverage.16 To that end, the ACA and its implementing
regulations aim to drive costs down specifically for coverage available on the exchanges,
spurring further enrollment and ensuring that health insurance markets function smoothly.
39. When faithfully implemented, the ACA’s reforms successfully met Congress’s
goal of enabling more individuals—specifically, 20 million more individuals17—to enroll in
health insurance coverage. Indeed, the number of uninsured nonelderly Americans had decreased
from 44 million in 2013 (the year before the ACA’s major coverage provisions went into effect)
to around 28 million by the end of 2016.18 The uninsured rate had dropped across all
demographic groups; individuals with low and moderate incomes, young people, and those who
live in rural areas have experienced particularly dramatic coverage gains.19 In addition, the
15 Id. 16 Press Release, CMS, High Costs, Lack of Affordability Most Common Factors that Lead Consumers to Cancel Health Insurance Coverage (June 12, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releasesitems/2017-06-12.html. 17 Namrata Uberio et al., Health Insurance Coverage and the Affordable Care Act, 2010-2016 at 8, HHS (March 3, 2016), https://aspe.hhs.gov/system/files/pdf/187551/ACA2010-2016.pdf. 18 See Key Facts About the Uninsured Population, Kaiser Family Foundation (Nov. 29, 2017), https://www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/ [hereinafter KFF Key Facts]; Robin A. Cohen et al., Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2016 at 2, National Center for Health Statistics (May 2017), https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201705.pdf. 19 See Bowen Garret & Anuj Gangopadhyaya, Who Gained Health Insurance Coverage Under the ACA, and Where Do They Live?, Urban Institute (Dec. 2016),
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Congressional Budget Office has concluded that under the ACA—assuming it is implemented
faithfully—the market for individual health insurance “would probably be stable in most
areas.”20
40. Several aspects of the ACA contributed to the 57 percent increase in the number
of people covered in the individual market (on and off exchanges) between 2013 and 2016.21
Overall, an estimated 40 percent of the coverage gain attributable to the ACA resulted from the
exchanges’ policies.22 In addition, the ACA set up the exchanges to encourage competition
among insurers, both to keep premiums low and to improve customer service. To that end, it
significantly standardized benefits and cost-sharing to facilitate shopping on price, required that
the exchanges create tools to allow consumers to compare plans, and established a permanent
risk-adjustment program to prevent insurers from profiting by disproportionately enrolling
people with lower-than-average health care costs.
41. The results were clear: the unsubsidized cost of coverage in the exchanges, before
the start of the Trump Administration, was 10 percent lower than the average employer-
https://www.urban.org/sites/default/files/publication/86761/2001041-who-gained-healthinsurance-coverage-under-the-aca-and-where-do-they-live.pdf; Sara R. Collins et al., How the Affordable Care Act Has Improved Americans’ Ability to Buy Health Insurance on Their Own, Commonwealth Fund (Feb. 1, 2017), http://www.commonwealthfund.org/publications/issuebriefs/2017/feb/how-the-aca-has-improved-ability-to-buy-insurance; Kevin Quealy & Margot Sanger-Katz, Obama’s Health Law: Who Was Helped Most, New York Times, Oct. 29, 2014, https://www.nytimes.com/interactive/2014/10/29/upshot/obamacare-who-was-helped-most.html. 20 Congressional Budget Office, Congressional Budget Office Cost Estimate: American Health Care Act (Mar. 13, 2017), https://www.cbo.gov/system/files/115th-congress-20172018/costestimate/americanhealthcareact.pdf. 21 Health Insurance Coverage of Nonelderly 0-64, 2013 and 2016, Kaiser Family Foundation, https://www.kff.org/other/state-indicator/nonelderly-0-64/. 22 See Molly Frean et al., Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act, 53 J. of Health Economics 72 (2016), http://www.nber.org/papers/w22213.
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sponsored insurance premium.23 In the early years after the exchanges opened, some insurers set
prices so low that they lost money in order to gain market share; others did not fully understand
the risks of their new customers. In 2017, they raised premiums to correct those mistakes. After
the 2017 price corrections, expert analyses indicated that premiums would have grown in single
digits for 2018 but for Defendants’ policies, including those challenged here.24
II. The Administration’s Intent to Repeal the ACA, With or Without Congress
42. Notwithstanding the ACA’s demonstrated successes, President Trump has
repeatedly vowed to ensure that the Act is repealed. For example, on June 15, 2015, in
announcing his candidacy for the presidency, he stated, “So, just to sum up, I would do various
things very quickly. I would repeal and replace the big lie, Obamacare.”25 On October 8, 2015,
then-candidate Trump stated, “We’re gonna repeal Obamacare.”26 Then, on July 21, 2016, in
accepting the Republican nomination for the presidency, Trump stated, “We will repeal and
replace disastrous Obamacare.”27
23 Linda J. Blumberg et al., Are Nongroup Marketplace Premiums Really High? Not in Comparison with Employer Insurance, Urban Institute (Sept. 2016), https://www.urban.org/research/publication/are-nongroup-marketplace-premiums-really-highnot-comparison-employer-insurance. 24 Matthew Fiedler, Taking Stock of Insurer Financial Performance in the Individual Health Insurance Market Through 2017, Brookings (Oct. 2017), https://www.brookings.edu/research/taking-stock-of-insurer-financial-performance-in-theindividual-health-insurance-market-through-2017/; Mark A. Hall & Michael J. Cue, Health Insurance Markets Perform Better in States That Run Their Own Marketplaces, To the Point (March 7, 2018), https://www.commonwealthfund.org/blog/2018/health-insurance-marketsperform-better-states-run-their-own-marketplaces. 25 Here’s Donald Trump’s Presidential Announcement Speech, Time (June 16, 2015) http://time.com/3923128/donald-trump-announcement-speech/. 26 Presidential Candidate Donald Trump Rally in Las Vegas, C-SPAN (Oct. 8, 2015) https://www.c-span.org/video/?328645-1/presidential-candidate-donald-trump-rally-las-vegas. 27 Donald J. Trump, Republican Nomination Acceptance Speech (July 21, 2016), https://assets.donaldjtrump.com/DJT_Acceptance_Speech.pdf.
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43. Despite these promises by the President—and many, many more not catalogued here—and despite repeated attempts, Congress has declined to pass a bill repealing the Affordable Care Act.
44. President Trump has repeatedly admitted that three key elements of his strategy to convince Congress to repeal the ACA are asserting—falsely—that the law is failing, undermining the ACA by neglect, and sabotaging the ACA with affirmative executive actions:
a. On January 11, 2017, President-elect Trump stated, “[T]he easiest thing would be to let [the ACA] implode in ‘17 and believe me, we’d get pretty much whatever we wanted, but it would take a long time.”28
b. On January 25, 2017, President Trump stated, “[T]he best thing we could do is nothing for two years, let [the ACA] explode. And then we’ll go in and we’ll do a new plan and—and the Democrats will vote for it. Believe me . . . . So let it all come [due] because that’s what’s happening. It’s all coming [due] in ‘17. We’re gonna have an explosion. And to do it right, sit back, let it explode and let the Democrats come begging us to help them because it’s on them.”29
c. On January 26, 2017, President Trump stated, “If we waited two years, [the ACA is] going to explode like you’ve never seen an explosion.
28 Donald Trump’s News Conference: Full Transcript and Video, New York Times (Jan. 11, 2017), https://www.nytimes.com/2017/01/11/us/politics/trump-press-conference-transcript.html. 29 Transcript: ABC News Anchor David Muir Interviews President Trump, ABC News (Jan. 25, 2017), http://abcnews.go.com/Politics/transcript-abc-news-anchor-david-muir-interviewspresident/story?id=45047602.
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Nobody’s going to be able to afford it. It’s a disaster. And that’s politically what we should do . . . .”30 d. On January 26, 2017, President Trump stated, “[The ACA] actually explodes in ‘17. And I told the Republicans. I said, look, if you really want to do something, just let it explode, and then they’ll come begging us to fix it, OK? Begging.”31 e. On March 24, 2017, President Trump stated, “As you know, I’ve been saying for years that the best thing is to let Obamacare explode and then go make a deal with the Democrats and have one unified deal. And they will come to us, we won’t have to come to them. After Obamacare explodes . . . . Time will tell. Obamacare is in for some rough days. You understand that. It’s in for some rough, rough days. I’ll fix it as it explodes. They’re going to come to ask for help. They’re going to have to. Here’s the good news: Health care is now totally the property of the Democrats.”32
30 Transcripts: Trump Addresses GOP Leadership at Retreat in Philadelphia, CNN (Jan. 26, 2017), http://transcripts.cnn.com/TRANSCRIPTS/1701/26/wolf.02.html. 31 Cable Exclusive: Trump Sits Down with Sean Hannity at White House, Fox News (Jan. 26, 2017), http://www.foxnews.com/transcript/2017/01/26/cable-exclusive-president-trump-sitsdown-with-sean-hannity-at-white-house.html. 32 Robert Costa, ‘Hello, Bob’: President Trump Called My Cellphone to Say That the Healthcare Bill Was Dead, Washington Post, Mar. 24, 2017, https://www.washingtonpost.com/powerpost/president-trump-called-my-cellphone-to-say-thatthe-health-care-bill-was-dead/2017/03/24/8282c3f6-10ce-11e7-9b0d-d27c98455440_story.html.
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f. On March 25, 2017, President Trump tweeted, “ObamaCare will explode
and we will all get together and piece together a great healthcare plan for
THE PEOPLE. Do not worry!”33
g. On April 12, 2017, President Trump tied his Administration’s potential
elimination of CSR payments, addressed below,34 to his overall sabotage
agenda, stating, “Even now, as I came in here, they’re saying payments
have to be made that weren’t scheduled to be made on ObamaCare. If you
don’t make them, it fails. I mean, you know, it’s just a mess. ObamaCare
is a total mess.”35
h. Again referencing the possibility that his Administration would eliminate
CSR payments, on April 12, 2017, President Trump stated, “that would
mean that Obamacare doesn’t have enough money so it dies immediately
as opposed to over a period of time. Even if it got that money, it dies, but
it dies over a period of time.”36 That same day, President Trump
33 @realDonaldTrump, Twitter (March 25, 2017, 10:37 AM), https://twitter.com/realDonaldTrump/status/845645916732358656. 34 See infra ¶¶ 111-15; Reed Abelson & Margot Sanger-Katz, Explaining the Health Payments That Trump Has Called ‘Ransom Money’, New York Times, Apr. 14, 2017, https://www.nytimes.com/2017/04/14/upshot/explaining-the-health-payments-that-trump-isthreatening-to-end.html. 35 Aaron Blake, President Trump’s Thoroughly Confusing Fox Business Interview, Annotated, Washington Post, Apr. 12, 2017, https://www.washingtonpost.com/news/thefix/wp/2017/04/12/president-trumps-throughly-confusing-fox-business-interviewannotated/?utm_term=.64c0efc03f6a. 36 WSJ Trump Interview Excerpts: China, North Korea, Ex-Im Bank, Obamacare, Bannon, More, Wall Street Journal (Apr. 12, 2017), https://blogs.wsj.com/washwire/2017/04/12/wsjtrump-interview-excerpts-china-north-korea-ex-im-bank-obamacare-bannon/; https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-pressdemocrats-on-health-bill-1492029844.
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elaborated on the theme: “Obamacare is dead next month if it doesn’t get

that money . . . . What I think should happen and will happen is the

Democrats will start calling me and negotiating.”37

i.

Similarly, on April 23, 2017, President Trump tweeted, “ObamaCare is in

serious trouble. The Dems need big money to keep it going - otherwise it

dies far sooner than anyone would have thought.”38

j.

On May 1, 2017, President Trump stated, “And I’ve said from day one,

the best thing I could do is let ObamaCare die and then come in with a

plan.”39

k.

On May 4, 2017, President Trump stated, “I predicted it a long time ago. I

said, [the ACA is] failing. And now, it’s obvious that it’s failing. It’s dead.

It’s essentially dead. If we don’t pay lots of ransom money over to the

insurance companies it would die immediately.”40

l.

On May 4, 2017, President Trump also pronounced that he was presiding

over the ACA’s “dea[th].”41

37 Michael C. Bender et al., Trump Threatens to Withhold Payments to Insurers to Press Democrats on Health Bill, Wall Street Journal, Apr. 12, 2017, https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-pressdemocrats-on-health-bill-1492029844.
38 @realDonaldTrump, Twitter (Apr. 23, 2017, 7:20 AM), https://twitter.com/realDonaldTrump/status/856150719656755200.
39 Trump on North Korea: ‘Nobody’s Safe’, Fox News, May 1, 2017, http://www.foxnews.com/politics/2017/05/01/trump-on-north-korea-nobodys-safe.html.
40 Id.
41 Remarks by President Trump on Healthcare Vote in the House of Representatives, The White House (May 4, 2017), available at https://web.archive.org/web/20170504233618/https://www.whitehouse.gov/the-pressoffice/2017/05/04/remarks-president-trump-healthcare-vote-house-representatives.

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m. Likewise, on May 11, 2017, President Trump stated, “You know when people say, ‘Oh, Obamacare is so wonderful,’ there is no Obamacare, it’s dead. Plus we’re subsidising it and we don’t have to subsidise it. You know if I ever stop wanting to pay the subsidies, which I will.”42
n. On June 12, 2017, according to the press, President Trump “stressed the need to ‘starve the beast’ of Obamacare in order to garner more public support for [a] Republican-backed [repeal] bill.”43
o. On June 28, 2017, President Trump stated, “Obamacare is dying. It’s essentially dead. If you don’t give it the subsidy, it would die within 24 hours. It’s been a headache for everybody. It’s been a nightmare for many.”44
p. On July 18, 2017, President Trump tweeted, “As I have always said, let ObamaCare fail and then come together and do a great healthcare plan.”45
q. On July 18, 2017, President Trump stated, “[L]et Obamacare fail, it will be a lot easier. And I think we’re probably in that position where we’ll let Obamacare fail. We’re not going to own it. I’m not going to own it. I can
42 Transcript: Interview with Donald Trump, Economist (May 11, 2017) https://www.economist.com/united-states/2017/05/11/transcript-interview-with-donald-trump. 43 Jake Lahut, Trump: Dems Wouldn’t Pass Healthcare Bill Even if It Was the Best in the World, Politico, June 12, 2017, http://www.politico.com/story/2017/06/12/trump-obamacarerepeal-bill-democrats-239428. 44 Remarks by President Trump and Secretary of Energy Rick Perry at Tribal, State, and Local Energy Roundtable, The White House (June 28, 2017), https://www.whitehouse.gov/the-pressoffice/2017/06/28/remarks-president-trump-and-secretary-energy-rick-perry-tribal-state-and. 45 @realDonaldTrump, Twitter (July 18, 2017, 4:58 AM), https://twitter.com/realDonaldTrump/status/887280380423938048.
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tell you the Republicans are not going to own it. We’ll let Obamacare fail and then the Democrats are going to come to us.”46 r. On July 19, 2017, President Trump stated, “If we don’t get it done, we are going to watch Obamacare go down the tubes, and we’ll blame the Democrats. And at some point, they are going to come and say, ‘You’ve got to help us.’”47 45. One effort to repeal the ACA failed in the Senate in the early hours of July 28, 2017, with Sen. John McCain marking his decisive vote against repeal by a thumbs-down gesture.48 Thereafter, President Trump continued to push the false narrative that the ACA was failing. He also placed greater emphasis on the affirmative steps that he and his Administration were taking to sabotage the Act in order to provoke Congress to repeal it, or to achieve its de facto destruction: a. On July 28, 2017, shortly after the failed vote, President Trump tweeted, “3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let ObamaCare implode, then deal. Watch!”49
46 Matthew Yglesias, Trump: ‘Let Obamacare Fail… I’m Not Going to Own It’, Vox, July 18, 2017, https://www.vox.com/2017/7/18/15990986/trump-let-obamacare-fail. 47 Excerpts from the Times’s Interview with Trump, New York Times, July 19, 2017, https://www.nytimes.com/2017/07/19/us/politics/trump-interview-transcript.html?_r=0. 48 Robert Pear and Thomas Kaplan, Senate Rejects Slimmed-Down Obamacare Repeal as McCain Votes No, New York Times, July 28, 2017, https://www.nytimes.com/2017/07/27/us/politics/obamacare-partial-repeal-senate-republicansrevolt.html. 49 @realDonaldTrump, Twitter (July 27, 2017, 11:25 PM), https://twitter.com/realDonaldTrump/status/890820505330212864.
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b. On July 28, 2017, President Trump stated, “You know, I said from the beginning, let Obamacare implode, and then do it. And I turned out to be right. Let Obamacare implode.”50
c. On October 10, 2017, in advance of issuing Executive Order No. 13,813, which directed his Administration to expand access to non-ACA compliant plans and thereby siphon consumers, especially healthy consumers, away from ACA exchanges, see infra ¶¶ 116-22, President Trump tweeted, “[s]ince Congress can’t get its act together on HealthCare, I will be using the power of the pen.”51
d. On October 13, 2017, after announcing the end of cost-sharing reduction payments, see infra ¶¶ 111-15, President Trump stated, “You saw what we did yesterday with respect to health care. . . . We’re taking a little different route than we had hoped, because getting Congress—they forgot what their pledges were. . . . So we’re going a little different route. But you know what? In the end, it’s going to be just as effective, and maybe it’ll even be better.”52
50 Jordan Fabian, Trump: Let ObamaCare Implode, The Hill, July 28, 2017, http://thehill.com/homenews/administration/344365-trump-let-obamacare-implode. 51 @realDonaldTrump, Twitter (Oct. 10, 2017, 3:30 AM), https://twitter.com/realDonaldTrump/status/917698839846576130. 52 President Trump Addresses Values Voter Summit, CNN (Oct. 13, 2017), http://www.cnn.com/TRANSCRIPTS/1710/13/cnr.04.html.
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e. On that same day, President Trump tweeted, “The Democrats [sic]

ObamaCare is imploding. Massive subsidy payments to their pet insurance

companies has stopped. Dems should call me to fix!”53

f. Also on October 13, 2017, President Trump tweeted, “ObamaCare is a

broken mess. Piece by piece we will now begin the process of giving

America the great HealthCare it deserves!”54

g. On October 14, 2017, a few months after he left the White House, Steve

Bannon, one of President Trump’s key advisors, boasted that the

Administration was undertaking executive action to “blow [the Act] up,”

reiterating its intent to “blow those [insurance] exchanges up.”55

h. On October 16, 2017, President Trump stated, “Obamacare is finished. It’s

dead. It’s gone. It’s no longer—you shouldn’t even mention [it]. It’s gone.

There is no such thing as Obamacare anymore.”56

i.

On October 17, 2017, President Trump stated, “Obamacare is virtually

dead. At best, you could say it’s in its final legs. The premiums are going

through the roof. The deductibles are so high that people don’t get to use

53 @realDonaldTrump, Twitter (Oct. 13, 2017, 2:36 AM), https://twitter.com/realDonaldTrump/status/918772522983874561. 54 @realDonaldTrump, Twitter (Oct. 13, 2017, 4:14 AM), https://twitter.com/realDonaldTrump/status/918797009133465600. 55 Martin Pengelly, Bannon Says Trump Will ‘Blow Up’ Obamacare as Subsidies Cut Stokes Fires, The Guardian, Oct. 15, 2017, https://www.theguardian.com/us-news/2017/oct/15/bannonindicates-trumps-aca-strategy-blow-that-thing-up (second alteration in original). 56 Remarks by President Trump in Cabinet Meeting, The White House (Oct. 16, 2017), available at https://web.archive.org/web/20171016180503/https://www.whitehouse.gov/thepress-office/2017/10/16/remarks-president-trump-cabinet-meeting.
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it. Obamacare is a disgrace to our nation, and we are solving the problem

of Obamacare.”57

j.

In late April 2018, at a rally in Michigan, President Trump bragged,

“Essentially, we are getting rid of Obamacare . . . . Some people would

say, essentially, we have gotten rid of it.”58

k. In signing a bill unrelated to the ACA on May 30, 2018, President Trump

stated: “For the most part, we will have gotten rid of a majority of

Obamacare.”59 He went on to confirm that his Administration’s objective

is to achieve by executive action alone what Congress has refused to do:

“Could have had it done a little bit easier, but somebody decided not to

vote for it, so it’s one of those things.”60

l.

Likewise, on June 4, 2018, President Trump tweeted: “We had Repeal &

Replace done (and the saving to our country of one trillion dollars) except

for one person”—presumably, Sen. John McCain—”but it is getting done

anyway.”61 Referencing the tax bill’s reduction of the shared responsibility

57 Remarks by President Trump and Prime Minister Tsipras of Greece Before Bilateral Meeting, The White House (Oct. 17, 2017), available at https://web.archive.org/web/20171030160901/https://www.whitehouse.gov/the-pressoffice/2017/10/17/remarks-president-trump-and-prime-minister-tsipras-greece-bilateral.
58 Alan Rappeport, Trump Says He Got Rid of Obamacare. The I.R.S. Doesn’t Agree, New York Times, May 6, 2018, https://www.nytimes.com/2018/05/06/business/trump-obamacareirs.html.
59 Remarks by President Trump at S.204 “Right to Try” Bill Signing, The White House (May 30, 2018), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-s-204right-try-bill-signing/.
60 Id.
61 @realDonaldTrump, Twitter (June 4, 2018, 5:18 AM), https://twitter.com/realDonaldTrump/status/1003611857272360960.

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payment to $0, President Trump continued, “Individual Mandate is gone
and great, less expensive plans will be announced this month.”62
m. At a rally on June 23, 2018, according to an observer, President Trump
“mock[ed] John McCain’s ‘thumbs down’ on the Obamacare repeal” and
told audience members that “‘it doesn’t matter. We gutted it anyway.’”63
n. In that same vein, in a speech on July 23, 2018, according to an observer,
President Trump stated that “Obamacare’s very rapidly fading away” and
once again singled out Sen. McCain.64
o. Finally—at least as of this filing—on August 1, 2018, President Trump
returned to the same theme, stating:
We had Obamacare repealed and replaced, and a man—I won’t mention his name. But a man at 2 o’clock in the morning went thumbs down . . . We had the chance. . . . But still, I have just about ended Obamacare. We have great health care. We have a lot of great things happening right now. New programs are coming out. We got rid of the individual mandate. But that was very disappointing to me that night—and he did it because of me, probably. But that was very disappointing. That was a horrible thing he did to our country. And, frankly, it cost $1 trillion because we would have saved $1 trillion, on top of which we would have had good health care. But we’re doing it a different way. We have to go a different route.65
62 Id. 63 @LauraLitvan, Twitter (June 23, 2018, 1:04 PM), https://twitter.com/LauraLitvan/status/1010614472946352128; see also Jake Sherman et al., Overheard at the DSCC Retreat on Martha’s Vineyard, Politico, June 24, 2018, https://www.politico.com/newsletters/playbook/2018/06/24/overheard-at-the-dscc-retreat-onmarthas-vineyard-281247. 64 @ddale8, Twitter (July 23, 2018, 3:40 PM), https://twitter.com/ddale8/status/1021480066029694978. 65 President Trump Calls the Show!, The Rush Limbaugh Show (Aug. 1, 2018), https://www.rushlimbaugh.com/daily/2018/08/01/president-trump-calls-the-show/amp/ (emphasis added).
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46. Statements disparaging the Affordable Care Act have also been made by other
prominent members of President Trump’s Administration, including when announcing some of
the very executive actions at issue here. For example, in announcing that open enrollment for the
2018 plan year would be cut in half from previous years, CMS’s press release touted, in bullet
form, “[r]ecent statistics related to the Affordable Care Act” that were deliberately selected to paint a false picture of the Act as failing.66 On information and belief, CMS Administrator
Seema Verma edited these bullets herself. And on a media call to explain the 2019 Rule, Ms.
Verma said, “It’s clear that Obamacare continues to have negative effects on many Americans.”67 That view—mistaken, and more importantly, contrary to Congress’s judgment—
permeates and drives the Administration’s campaign to undermine the ACA.
DEFENDANTS’ EXECUTIVE ACTIONS TO SABOTAGE THE AFFORDABLE CARE ACT 47. President Trump and his Administration have attempted to deliver on their
repeated promises to sabotage the Affordable Care Act. The Administration knows what
executive actions would faithfully implement the Act and further the Act’s objective of expanding affordable health insurance to every American.68 Yet the Administration has
repeatedly refused to pursue such actions and has instead adopted policies affirmatively designed
to undermine the Act. As detailed below, multiple provisions of the 2019 Rule, and many other
66 Press Release, CMS, CMS Issues Final Rule to Increase Choices and Encourage Stability in Health Insurance Market for 2018 (Apr. 13, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releasesitems/2017-04-13-2.html. 67 Allison Inserro, CMS Creates New ACA Penalty Mandate Exemptions, Including Opposition to Abortion, AJMC, Apr. 10, 2018, https://www.ajmc.com/newsroom/cms-creates-new-acapenalty-mandate-exemptions-including-opposition-to-abortion. 68 See, e.g., Letter from Andrew M. Slavitt to CMS Administrator Verma (Nov. 27, 2017), available at https://www.regulations.gov/contentStreamer?documentId=CMS-2017-01410240&attachmentNumber=1&contentType=pdf (commenting on the 2019 Rule as proposed).
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executive actions, have the aim and effect of weakening ACA exchanges, driving up premiums, and driving out issuers, ultimately increasing the rate of the uninsured and underinsured. I. The 2019 Rule
48. In April 2018, the Centers for Medicare and Medicaid Services promulgated a final rule that undermines many of the Act’s safeguards and requirements. See Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (April 17, 2018). Specifically, many provisions of the 2019 Rule roll back protections that the Act guarantees, make it more difficult to enroll in ACA-compliant plans, and drive up the cost of ACA-compliant plans. For the reasons explained below, the enumerated provisions of the 2019 Rule violate the Administrative Procedure Act and must be set aside.
Eliminating Protections that the ACA Guarantees 49. Numerous provisions of the 2019 Rule weaken or eliminate ACA protections necessary to ensure that individuals have access to quality, affordable health insurance coverage.
1. Permitting Exchanges to Strip Individuals of Eligibility for Tax Credits Without Providing Direct Notification
50. As noted above, many individuals who purchase health insurance through the exchanges are eligible for premium subsidies known as advance premium tax credits. The Affordable Care Act required HHS to promulgate regulations further defining APTC eligibility. 42 U.S.C. §§ 18081, 18082. Among other things, HHS regulations direct exchanges to deny APTCs to an individual if the Internal Revenue Service notifies the exchange that the individual or a member of her household did not reconcile the amount of advance premium tax credits she received with the amount of the actual premium tax credit she should have been allowed on her prior year’s tax return. See 45 C.F.R. § 155.305(f)(4) (describing process for filing a federal income tax return). This provision, known as the failure to reconcile provision, was amended in
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2016 to specify that an exchange may not deny APTC under this provision “unless direct notification is first sent to the tax filer . . . that his or her eligibility will be discontinued as a result of the tax filer’s failure to comply with the requirement.” 45 C.F.R. § 155.305(f)(4)(ii) (2016) (effective Jan. 17, 2017 to June 17, 2018).
51. The 2019 Rule continues to require that exchanges deny APTCs to individuals who fail to reconcile APTCs received in a prior year on their tax return but, crucially, removes the requirement that exchanges first provide such individuals with direct notification that their eligibility will be discontinued as a result of their failure to comply with this requirement. 83 Fed. Reg. at 16,982. The 2019 Rule’s failure to reconcile provision is contrary to law and arbitrary and capricious, and therefore must be set aside.
52. The failure to reconcile provision conflicts with express statutory language requiring that any eligible individual be allowed to claim APTC. Under 26 U.S.C. § 36B, “[i]n the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed . . . for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.” The statute’s plain terms thus require that any applicable taxpayer be allowed to claim an APTC. The term “applicable taxpayer” means, “with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.” 26 U.S.C. § 36B(c)(1)(A). Whether an individual has reconciled her APTC has no bearing on whether she is an “applicable taxpayer” under the statute. Therefore, depriving an “applicable taxpayer” of the credit that the statute says “shall be allowed” based on a failure to reconcile his or her taxes violates the plain language of the statute.
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53. In addition, CMS’s decision to remove the direct notification requirement is arbitrary and capricious. CMS attempted to justify its decision to remove the direct notification requirement by asserting that state exchanges are not equipped to send direct notices and in light of the agency’s belief that “ensuring consumers are not receiving APTC improperly is necessary for program integrity.” 83 Fed. Reg. at 16,984. This purported justification fails, and the 2019 Rule’s failure to reconcile provision is arbitrary and capricious, for at least two reasons. First, CMS offered no evidence that consumers are in fact “receiving APTC improperly.” Id. Second, the 2019 Rule indicates that FFEs will continue to provide direct notification, demonstrating that CMS recognizes the utility and importance of such notifications. See id. at 16,983. Indeed, the direct notice requirement was added to the failure to reconcile provision in 2016 in response to concerns that denying APTCs without direct notice would violate due process.69 CMS thus knows about the problem that direct notification was designed to solve, and yet is now eliminating the solution without setting forth any evidence that the problem has gone away.
54. The 2019 Rule will cause eligible individuals to lose the subsidies that the ACA guarantees, and will do so without providing any advance, direct notification. In 2017, annual premium tax credits averaged $4,458.70 The unexpected loss of this assistance would likely cause many if not most individuals to drop coverage entirely, especially since they will not know why they lost it or how to remedy their loss. Individuals might lose subsidies for any number of reasons that would ultimately prove unfounded; direct notification facilitated individuals’ efforts to determine why they had lost eligibility and how to fix the problem. Former Administration
69 HHS, Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods, 81 Fed. Reg. 94,058, 94,124 (Dec. 22, 2016). 70 See CMS, 2017 Effectuated Enrollment Snapshot 5 (June 12, 2017), https://downloads.cms.gov/files/effectuated-enrollment-snapshot-report-06-12-17.pdf.
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officials who worked to implement the ACA’s advance premium tax credit program estimate that this Administration’s decision could deprive up to 800,000 eligible individuals of their APTCs, leading to a significant rise in the number of uninsured Americans—directly contrary to the purpose of the Act.
2. Outsourcing to States the Compliance Review of Insurance Plans to be Offered on Federal Exchanges
55. According to the text of the ACA, the Secretary of Health and Human Services “shall, by regulation, establish criteria for the certification of health plans as qualified health plans,” 42 U.S.C. § 18031(c)(1), including criteria that “ensure a sufficient choice of providers,” id. § 18031(c)(1)(B)—i.e., criteria that ensure network adequacy. Pursuant to those criteria, “[a]n Exchange shall, at a minimum[,] implement procedures for the certification, recertification, and decertification . . . of health plans as qualified health plans.” 42 U.S.C. § 18031(d)(4)(A).
56. Consistent with these statutory requirements, CMS, acting as the exchange in states with federally-facilitated exchanges, used to review network adequacy and accreditation status plans that insurers proposed to offer on those exchanges.
57. The 2019 Rule instead extends a policy first adopted in the 2018 Market Stabilization Rule, 82 Fed. Reg. 18,346, 18,371-72 (April 18, 2017), under which CMS will “rely on the [s]tates’ reviews” of network adequacy and other critical requirements in certain federally-facilitated exchanges, see 83 Fed. Reg. at 17,024-26. In defending its decision, CMS explained that it “is committed to recognizing States’ role as the primary regulator of their insurance markets,” and that it sought “to limit duplicative oversight over issuers.” Id. at 17,024. CMS’s decision is both contrary to law and arbitrary and capricious under the APA, and must be set aside.
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58. First, CMS’s decision conflicts with express statutory language, quoted above, that requires the federal government, as the administrator of federally-facilitated exchanges, to certify plans proffered by insurers as qualified health plans under the applicable statutory and regulatory criteria. Under the ACA, the Secretary of Health and Human Services “shall, by regulation, establish criteria for the certification of health plans as qualified health plans,” including criteria that “ensure a sufficient choice of providers.” 42 U.S.C. § 18031(c)(1) (emphasis added). Pursuant to those criteria, “[a]n Exchange shall, at a minimum[,] implement procedures for the certification, recertification, and decertification . . . of health plans as qualified health plans.” 42 U.S.C. § 18031(d)(4)(A) (emphasis added). The statute’s repeated use of the term “shall” makes plain that these are mandatory duties. Moreover, the statutory requirement to certify health plans is a “minimum” requirement, 42 U.S.C. § 18031(d)(4)(A), below which an exchange cannot fall. Simply deferring to states to conduct plan reviews does not constitute “implement[ing] procedures” for the exchange’s review.
59. Interpreting the statute to prohibit CMS’s decision to rubber-stamp states’ review of network adequacy for federally-facilitated exchanges is also consistent with the Act’s purpose. Among other things, “[t]he Act aims to increase the number of Americans covered by health insurance” adequate to meet their health needs. Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012). But health insurance cannot meet a consumer’s needs if the provider’s network is inadequate—that is, if it lacks facilities close to the consumer’s home or that are equipped to handle the consumer’s specific medical conditions. Thus, permitting CMS, as the administrator of federally-facilitated exchanges, to approve a state’s assessment of network adequacy powerfully undermines this central feature of, and conflicts with, the ACA.
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60. Second, even if the ACA permitted the choice CMS made, the explanation CMS offered for outsourcing its duties to states is insufficient, confirming that its choice was arbitrary and capricious. CMS offered virtually no response to commenters’ views that “[s]tates’ and accrediting entities’ review processes do not do enough to ensure enrollees have adequate access to necessary care,” simply asserting that its decision would “reduc[e] regulatory burden on issuers, while also preserving adequate access to care.” 83 Fed. Reg. at 17,025. In particular, CMS failed to provide evidence to buttress its assertion that state review procedures are sufficient to guarantee network adequacy, including, for example, an analysis of the rigor of state procedures or assessments of plans certified by state regulators. That notwithstanding that “[a]long with lacking quantitative standards to ensure broad coverage, most states lack an adequate process to protect consumers forced to seek out-of-network treatment in particular cases.”71 Similarly, CMS neglected to consider how an exchange operator may be uniquely positioned to assess plan adequacy. Because CMS did not sufficiently justify its decision, failed to adequately respond to comments, and failed to consider important aspects of the problem, its decision in the 2019 Rule to outsource plan review on federally-facilitated exchanges to states was arbitrary and capricious.
61. Outsourcing federal plan review to states will permit insurers to market plans with overly restrictive networks of providers—networks that could thereby limit patient access to care. Even before the 2019 Rule, only 41 percent of qualified health plans in FFE states had
71 Mark Hall & Caitlin Brandt, Network Adequacy Under the Trump Administration, Health Affairs Blog, Sept. 14, 2017, https://www.healthaffairs.org/do/10.1377/hblog20170914.061958/full/.
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networks that included National Cancer Institute-designated cancer centers.72 Similarly, one study estimated that 15 percent of FFE plans lacked in-network physicians for at least one specialty.73 These numbers will continue to fall now that the federal government has shirked its plan review responsibilities. More consumers will end up purchasing inadequate plans, either through necessity or confusion—meaning that a greater share of the population will obtain insurance coverage that is insufficient to meet their health care needs. The rate of the underinsured will therefore increase.
3. Reducing Oversight of Insurance Brokers Participating in Direct Enrollment
62. By reducing federal oversight of insurance brokers that assist consumers in signing up for insurance on ACA exchanges via direct enrollment, see id. at 16,981-82, the 2019 Rule will enable brokers to provide consumers with incorrect information and permit brokers to deny consumers the assistance that they need, and that the ACA requires, so that they can identify and purchase the health insurance that best meets their situation.
63. Direct enrollment is a process under which a consumer enrolls in an ACAcompliant health insurance plan through a third-party website instead of through the governmental platform (HealthCare.gov for FFEs). Direct enrollment entities are “agents, brokers, and issuers that participate in direct enrollment and use their own internet website for [qualified health plan] selection or to complete the Exchange eligibility application.” Id. at 16,981. Given evidence that direct enrollment entities were committing fraud, signing up
72 Kenneth L. Kehl et al., Access to Accredited Cancer Hospitals Within Federal Exchange Plans Under the Affordable Care Act, 35 J. Clinical Oncology 645, 647 (2017). 73 Stephen C. Dorner et al., Adequacy of Outpatient Specialty Care Access in Marketplace Plans Under the Affordable Care Act, JAMA Network (2015), https://jamanetwork.com/journals/jama/fullarticle/2466113.
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individuals without their knowledge or consent, and using inaccurate calculators for APTC eligibility, prior rules provided a strong oversight structure and required such entities to be audited by third parties that HHS approved.
64. The 2019 Rule eliminates this protection and permits agents, brokers, and issuers participating in direct enrollment to “select their own third-party entities for conducting audits, rather than requiring HHS to initially review and approve these entities”—i.e., to select an auditor that has not been approved by HHS to determine whether the agent, broker, or issuer is ready to handle direct enrollment in compliance with relevant requirements. Id.
65. CMS’s decision to weaken oversight over direct enrollment entities is arbitrary and capricious and must be set aside. First, CMS failed to grapple with evidence, well known to the agency, that direct enrollment entities have in the past produced poor information for consumers, facilitating consumers’ poor enrollment choices. That evidence is what necessitated CMS oversight of direct enrollment entities’ auditors in the first place. Second, and relatedly, CMS failed to adequately respond to comments expressing “concern[] that enrollment through a non-governmental site would occur without proper oversight and controls.” Id. at 16,982. Indeed, CMS offers no meaningful response, and instead asserts, without evidence, that it “believe[s]” that its decision “will ensure that quality operational readiness reviews are conducted.” Id.
66. Scaling back oversight of agents, brokers, and issuers that participate in direct enrollment will increase the likelihood that consumers receive inaccurate information, thus decreasing overall enrollment and leading to a rise in the rate of the uninsured. CMS’s decision to shirk its responsibilities will also lead to a rise in the rate of the underinsured, as confusion around APTC eligibility facilitated by CMS’s withdrawal will lead individuals to choose plans that are not appropriate to their needs.
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Deterring Americans from Enrolling in Quality Health Insurance Plans 67. Other provisions of the 2019 Rule make it more difficult for consumers to enroll in ACA-compliant health insurance coverage.
1. Making It Harder to Compare Insurance Plans 68. A key function of the exchanges is to “allow[] people to compare and purchase” qualified health plans. King, 135 S. Ct. at 2485. In order to carry out this obligation—”to simplify the consumer shopping experience and to allow consumers to more easily compare plans across issuers”—prior rules supported “standardized options,” which are qualified health plans at different levels of coverage with a cost-sharing structure specified by HHS, including fixed deductibles, fixed annual limitations on cost-sharing, and fixed copayments or coinsurance for certain specified benefits.74 69. HHS supported standardized options given its recognition that “[a]n excessive number of health plan options makes consumers less likely to make any plan selection, more likely to make a selection that does not match their health needs, and more likely to make a selection that leaves them less satisfied.”75 HHS further stated that its experience during prior “open enrollment periods suggests that many consumers, particularly those with a high number of health plan options, find the large variety of cost-sharing structures available on the Exchanges difficult to navigate.” 80 Fed. Reg. at 75,542. HHS determined that “standardized options will provide these consumers the opportunity to make simpler comparisons of plans offered by different issuers within a metal level,” and to “focus their decision making on the
74 See CMS, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017, 81 Fed. Reg. 12,204, 12,205, 12,289-293 (Mar. 8, 2016) (final rule). 75 See HHS Notice of Benefit and Payment Parameters for 2017, 80 Fed. Reg. 75,488, 75,542 (Dec. 2, 2015) (proposed rule); see id. at 75,542 & nn.31-32 (citing data).
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providers in the plan networks, premiums, benefits, and quality,” and prevent consumers from having “to make complex tradeoffs among cost-sharing differences among a large number of plans.” Id. “For the 2017 and 2018 benefit years, HHS specified standardized options in rulemaking, encouraged issuers to offer such plans, and provided differential display of these plans on HealthCare.gov.” 83 Fed. Reg. at 16,974.
70. Notwithstanding the agency’s own understanding of their effectiveness, the 2019 Rule discontinues support for standardized options. See id. at 16,974-75. CMS’s decision to do so is arbitrary and capricious. CMS claims that standardized options stymied innovation, “removing incentives for issuers to offer coverage with innovative plan designs.” Id. at 16,974. Yet CMS has cited no data to support that contention. Furthermore, CMS offered no reasonable response to commenters who pointed out that standardized options “are a useful consumersupport tool that aids in plan comparisons and selection,” that their presence in fact “encourages issuers to innovate on other plan features and encourages issuers to compete on networks and formularies,” and that their withdrawal “could create confusion for consumers, especially those with low health literacy or certain health conditions.” Id. at 16,975 (emphasis added). CMS has not adequately explained its decision to make comparison shopping more difficult.
71. By eliminating support for standardized options on federal exchanges, the 2019 Rule makes it more difficult for consumers to select appropriate health coverage, and also increases the risk that they will go without coverage entirely. These effects will, in turn, increase the size of the underinsured and uninsured populations. Indeed, CMS itself cited commenters who pointed out “that removing the standardized option designation could make plan selection more difficult resulting in fewer people enrolling in QHPs.” Id.
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72. Moreover, eliminating support for standardized options will limit the degree to which health plans will compete on price; instead, some plans will choose to compete on benefit design in a gambit to discourage high-risk enrollees. Research found that after Massachusetts standardized its plans, consumers placed additional weight on cost-sharing features of their plan selections.76 Covered California, which runs California’s ACA exchange, attributes some of its success in offering affordable choices to its use of standardized plans.77 Without standardized options, it will be harder for individuals to select coverage, prices will rise, and the rate of the uninsured and underinsured will increase.
2. Undermining the Navigator Program 73. As explained above, the ACA requires exchanges to award grants to healthcare “Navigators” that are responsible for helping individuals enroll in qualified health plans. 42 U.S.C. § 18031(i). Under HHS’s prior rules, each exchange was required to have two Navigators, one of those Navigators was required to be a community- and consumer-focused nonprofit, and Navigators were required to have physical presences in the areas they served.78 CMS decided to eliminate these requirements in the 2019 Rule. See 83 Fed. Reg. at 16,979-80. Its decision violates the APA in multiple ways. 74. First, CMS’s decision to eliminate these requirements is contrary to law because it permits entities to qualify as Navigators that cannot satisfy the relevant statutory criteria. Among other things, Navigators must “conduct public education activities to raise awareness of the
76 Keith M. Marzilli Ericson, & Amanda Starc, How Product Standardization Affects Choice: Evidence from the Massachusetts Health Insurance Exchange, 50 J. Health Econ. 71 (2016). 77 Shelby Livingston, How California Made Obamacare Work, Modern Healthcare, June 13, 2017, http://www.modernhealthcare.com/article/20170613/NEWS/170619961. 78 See 45 C.F.R. §§ 155.210(c)(2), 155.210(e)(7), 155.215(h) (effective May 9, 2016 to June 17, 2018).
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availability of qualified health plans,” 42 U.S.C. § 18031(i)(3)(A); “distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits . . . and cost-sharing reductions,” id. § 18031(i)(3)(B); “facilitate enrollment in qualified health plans,” id. § 18031(i)(3)(C); provide enrollees with grievances, complaints, or questions about their health plans with referrals to specified entities, id. § 18031(i)(3)(D); and “provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges,” id. § 18031(i)(3)(E). But Navigators without a physical presence in an exchange service area cannot, in the terms CMS itself used in proposing the physical presence requirement, “provide[]” “face-to-face assistance . . . to applicants and enrollees”79—they therefore cannot adequately carry out the statutory duties summarized above.
75. The statute also requires Navigators to “demonstrate to the Exchange involved that [they have] existing relationships, or could readily establish relationships, with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan.” 42 U.S.C. § 18031(i)(2)(A). The prior requirement that exchanges award grants to at least two Navigators, and that one be a community- and consumer-focused nonprofit, faithfully implemented this statutory mandate; the 2019 Rule’s elimination of these requirements violates it. Current Navigators will potentially be replaced by organizations with conflicts of interest because commissions prompt them to steer enrollees to particular insurers. New Navigators may also have an incentive to discourage enrollment of high-cost enrollees.
79 CMS, Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond, 79 Fed. Reg. 15,808, 15,832 (Mar. 21, 2014).
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76. Second, the 2019 Rule’s elimination of the physical presence requirement is arbitrary and capricious. As noted above, in proposing the requirement CMS understandably recognized that face-to-face assistance is necessary for Navigators to carry out their statutorily required duties. 79 Fed. Reg. at 15,832. In response to CMS’s proposal to eliminate the requirement, “many commenters [stated] that entities not physically present in an Exchange service area may not be able to provide a full spectrum of local outreach, education, and assistance to support enrollment and post-enrollment activities”; “[m]any commenters” also stated “that removing this requirement would negatively affect hard-to-reach populations, as the in-person assistance provided by Navigator entities is often the only known resource and form of support for some low-income and other at-risk populations”; and “some commenters [stated] that web or phone-based assistance is a poor substitute for in-person assistance delivered by a known and trusted community-based organization, and that this is particularly true for those living with significant health needs for whom remote assistance may prove inadequate and frustrating.” 83 Fed. Reg. at 16,980. On top of that, CMS acknowledged—twice—”that entities with a physical presence and strong relationships in their [exchange] service areas tend to deliver the most effective outreach and enrollment results.” Id.; see id. at 16,979-80 (similar). Yet HHS eliminated the requirement. That is arbitrary and capricious.
77. The Administration’s actions will decrease individuals’ and families’ in-person access to complete, impartial information. In so doing, they will dampen overall enrollment, especially among vulnerable populations, and thereby increase the rate of the uninsured. People who receive in-person assistance are nearly 40 percent more likely to enroll in coverage than
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people who are forced to go it alone.80 In-person assistance is particularly important for young
people and minority populations, especially Latinos. A study conducted during the ACA’s first
open enrollment period found that two out of every five young people who successfully enrolled
in coverage received help from a Navigator.81 Another study found that nearly 50 percent of
Latinos who successfully enrolled received in-person assistance.82 Decreased in-person access to
Navigators makes it more difficult for individuals to shop for appropriate health insurance, and
will lead to a rise in the uninsured and underinsured.
3. Making Small Business Exchanges Less User-Friendly 78. The ACA requires exchanges to “provide[]for the establishment of a Small
Business Health Options Program”—a “‘SHOP Exchange’[] that is designed to assist” certain
“small employers in facilitating the enrollment of their employees in qualified health plans
offered in the small group market.” 42 U.S.C. § 18031(b)(1)(B).83 The ACA further requires
SHOP exchanges to “make available qualified health plans to . . . qualified employers,” id.
§ 18031(d)(2)(A); to protect employers’ and employees’ choice among certain qualified health
80 Sara R. Collins et al., Following the ACA Repeal-and-Replace Effort, Where Does the U.S. Stand on Insurance Coverage?, Commonwealth Fund (Sept. 7, 2017), http://www.commonwealthfund.org/Publications/Issue-Briefs/2017/Sep/Post-ACA-Repeal-andReplace-Health-Insurance-Coverage. 81 Deloitte, Young Adults and Health Insurance: Not Invincible--but Perhaps Convincible Findings from the Deloitte 2014 Survey of Young Adults and Health Insurance 6 (2014), https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-chsyoung-adults-and-health-insurance.pdf. 82 Adrian Garcia Mosqueira & Benjamin D. Sommers, Better Outreach Critical to ACA Enrollment, Particularly for Latinos, To the Point, Jan. 14, 2016, http://www.commonwealthfund.org/publications/blog/2016/jan/better-outreach-critical-to-acaenrollment-particularly-for-latinos. 83 See 42 U.S.C. § 18024(b)(2) (defining “small employer”). See generally Small Business Health Options Program (SHOP), CMS, https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/SHOP.html.
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plans, see id. § 18032(a)(2); and to protect employees’ ability to enroll even after their employer no longer qualifies as a small employer under the Act, see id. § 18024(b)(4)(D).
79. Under prior rules, CMS interpreted the ACA as “requir[ing] that all SHOPs provide for employer eligibility, employee eligibility, and certain enrollment functions, including premium aggregation functions.” 83 Fed. Reg. at 16,996. Provisions of the 2019 Rule purport to reinterpret the ACA and remove these requirements. See id. at 16,996-17,006. In so doing, these provisions are contrary to law and arbitrary and capricious. First, the removal of these requirements permits SHOPs that cannot fulfill their statutory duties, described above, which violates the ACA’s text. Second, although CMS purported to justify its decision by reference to declining enrollment in SHOPs, see, e.g., id. at 16,996, making SHOPs even less functional and less user friendly will exacerbate the very problem CMS cited. Because CMS’s interpretation violates the statute and has not been well-reasoned, these provisions of the 2019 Rule violate the APA.
80. By eliminating the requirement that SHOP exchanges allow employers to determine employee eligibility, aggregate premiums, and enroll employees online, the 2019 Rule makes it more difficult for small businesses to offer workers and their dependents affordable coverage, and thereby will increase the size of the uninsured population. These changes will also push small businesses to use a broker or buy directly from an insurance company, limiting their ability to make plan comparisons and shop by price for appropriate coverage, potentially raising their premiums.
4. Imposing Unnecessary Income Verification Requirements 81. In general, the ACA makes advance premium tax credits available to individuals purchasing insurance on an exchange whose income is between 100-400 percent of the federal
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poverty line (“FPL”). See 26 U.S.C. § 36B; 42 U.S.C. §§ 18081, 18082. Out of purported concern that individuals inflate their income above the FPL to gain APTCs, resulting in the payment of APTCs to those not entitled to receive them, provisions of the 2019 Rule impose income verification requirements “where electronic data sources reflect income under 100 percent FPL and a consumer attests to income between 100 percent FPL and 400 percent FPL.” 83 Fed. Reg. at 16,985; see id. at 16,985-87.
82. These provisions are arbitrary and capricious. Even though individuals have been seeking and receiving APTCs for years, in the 2019 Rule CMS “acknowledge[d] that it does not have firm data on the number of applicants that might be inflating their income to gain APTC.” Id. at 16,986. Furthermore, CMS admitted that its new rules will disadvantage “households with lower income.” Id. CMS has no sufficient answer to the “many commenters” who “expressed concern that low-income consumers have difficulty in providing documentation to resolve their annual income data matching issues and that [CMS’s new rules] would exacerbate that problem.” Id. Moreover, because APTC is reconciled with actual income from tax data for the year in question, the concern about program integrity is overstated. Overall, it is more than ironic that in the same rule that CMS repeatedly expresses a desire to cut red tape and reduce unnecessary regulation, it nonetheless increases bureaucratic hurdles for the most vulnerable Americans. That disparity renders these new requirements irrational. Because the Administration has not adequately explained why burdensome income verification measures are needed, the provisions of the 2019 Rule that impose them are arbitrary and capricious.
83. By making it harder for consumers to obtain insurance tax credits, these provisions of the 2019 Rule will likely mean that more consumers will choose to go without coverage entirely—i.e., that the rate of the uninsured will increase. The deterrent effects of
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paperwork burdens are well-documented as a general matter.84 Moreover, in this specific
context, paperwork burdens have historically deterred enrollment of people with relatively low need for health care; those with high health care needs will work harder to get coverage.85 For
example, a verification pilot study found that only 55 percent of young adults submitted required documents compared to 73 percent of older applicants.86 As such, extending verification to
additional groups will worsen the risk pool and raise premiums, causing coverage to become less
affordable.
84. This challenge will be even greater among the lower-income enrollees targeted by
this policy since they are more likely to have fluctuating income, part-year or part-time
employment, and multiple employers, and to have difficulty accessing and supplying necessary
documentation. One analysis estimates that 50 percent of adults with income below 200 percent
of the poverty level experience income changes that make them move between eligibility for Medicaid and the exchanges.87
84 See, e.g., Tricia Brooks, Why is NH Proposing to Replace Proven Electronic Citizenship Verification with Burdensome Medicaid Paperwork Requirements?, Georgetown University Health Policy Institute, Center for Children and Families (June 28, 2018), https://ccf.georgetown.edu/2018/06/28/why-is-nh-proposing-to-replace-proven-electroniccitizenship-verification-with-burdensome-medicaid-paperwork-requirements/. 85 Stan Dorn, Helping Special Enrollment Periods Work Under the Affordable Care Act 5-6, Urban Institute (June 2016), https://www.urban.org/sites/default/files/publication/81806/2000834-Helping-SpecialEnrollment-Periods-Work-Under-the-Affordable-Care-Act.pdf. 86 Pre-Enrollment Verification for Special Enrollment Periods, CMS, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Pre-EnrollmentSEP-fact-sheet-FINAL.PDF. 87 Benjamin D. Sommers & Sara Rosenbaum, Issues in Health Reform: How Changes in Eligibility May Move Millions Back and Forth Between Medicaid and Insurance Exchanges, Health Affairs (Feb. 2011), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2010.1000.
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Driving Up Costs 85. Lastly, other provisions of the 2019 Rule make health insurance coverage more expensive for consumers.
1. Exacerbating Risk Selection 86. The 2019 Rule allows states to petition CMS to reduce by half so-called “risk adjustment” transfer payments—payments by insurers with healthier enrollees to insurers with sicker enrollees. See 83 Fed. Reg. at 16,955-60. In so doing, the Rule provides insurers a dramatically increased incentive to sign up healthy individuals and families and deter enrollment by individuals and families with preexisting conditions or other high medical costs. 87. Adverse selection is a major concern in health insurance markets.88 One form of adverse selection, called risk selection, arises when “health plans manipulate their offerings to deter the sick and attract the healthy.”89 For a variety of reasons, “[t]he premiums that insurers are paid may not fully reflect their population mix, say because premiums are set in advance or because employers do not fully assess the mix of enrollees before bargaining with a plan over the premium.”90 “In such circumstances, insurers have incentives to attract healthy insureds and repel sick insureds” by manipulating their plans and outreach.91 88. To provide a partial solution to the problem of risk selection, the ACA requires each state to “assess a charge on health plans and health insurance issuers . . . if the actuarial risk of the enrollees of such plans or coverage for a year is less” than other issuers. 42 U.S.C. § 18063(a)(1) (emphasis added). By the same token, it requires each state to “provide a
88 David M. Cutler & Richard J. Zeckhauser, Adverse Selection in Health Insurance, in 1 Frontiers in Health Policy Research 1, 1 (Alan M. Garber, ed. 1998). 89 Id. at 2. 90 Id. at 10. 91 Id. at 12.
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payment” to insurers if the average actuarial risk of their plans is greater than other issuers. Id. § 18063(a)(2). In other words, the ACA’s risk adjustment scheme aims to defray the costs of signing up sicker enrollees, while limiting the financial benefit to pursuing largely healthy enrollees, thereby discouraging risk selection. Indeed, as CMS noted in the 2019 Rule, “[r]isk adjustment is widely used in health insurance markets, and is recognized as a critical measure in mitigating the effects of adverse selection.” 83 Fed. Reg. at 16,955.
89. The 2019 Rule, however, allows states to petition CMS to cut these payments in half. Specifically, the 2019 Rule permits states to ask to reduce risk adjustment transfer payments by up to 50 percent by “identifying the State-specific rules or market dynamics that warrant an adjustment and demonstrating the actuarial risk differences in plans in the applicable State market are attributable to factors other than systematic risk selection.” 83 Fed. Reg. at 16,957. In CMS’s view, the fact that “States are the primary regulators of their insurance markets,” id. at 16,956, justified this unwarranted reduction in payments needed to ensure that health insurance markets remain stable. That change is arbitrary and capricious.
90. Most importantly, CMS did not seriously grapple with the arguments presented by commenters—and corroborated by multiple studies—that substantial reductions in risk adjustment transfer payments would encourage risk selection by insurers, undermining the very purpose of the risk adjustment program specifically and the ACA generally. Instead, CMS simply parroted its assertion that “unique State rules or other relevant factors could support a reduction,” 83 Fed. Reg. at 16,958, elevating state flexibility over the statutory mandate for an effective risk adjustment program. In doing so, CMS also failed to respond to multiple comments pointing out, among other things, that the risk adjustment transfer methodology already accounts for state-specific factors, and that states can obtain additional flexibility simply by operating their
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own risk adjustment programs, see 45 C.F.R. § 153.330, which no state currently does, 83 Fed. Reg. at 16,958.
91. Moreover, CMS provided insufficient explanation for why it decided to expand the proposed reductions to insurers in individual markets. To the contrary, CMS acknowledged that “adverse selection in the individual market is not mitigated by group enrollment or minimum participation requirements as is the selection in the small group market,” 83 Fed. Reg. at 16,956; that “those enrolled in the individual or merged markets typically have higher actuarial risk, risk selection, and risk segmentation in plan selection than those enrolled in the small group market,” id. at 16,958; and that “risk adjustment transfers are particularly required in these markets to mitigate issuers’ risk of adverse selection and incentives to avoid risk,” id. Despite these meaningful differences between individual and small group insurance markets, CMS allowed states to request the same 50 percent reduction for individual markets as well (while not soliciting comments on this amount for this market). In other words, CMS entirely failed to consider an important aspect of the problem.
92. Finally, if CMS truly wished to provide states with additional flexibility, then it would have similarly allowed states to increase risk adjustment transfers based on “unique State rules or other relevant factors” as well. In rejecting that proposal, CMS made arguments flatly contrary to the reasons underlying its proposed reductions: that “State regulators under their own State authority could take actions outside of this flexibility,” and “can also elect to establish and operate the [ACA] risk adjustment program.” 83 Fed. Reg. at 16,959. Ultimately, CMS failed to explain why it decided to make the risk adjustment system a one-way ratchet. Because CMS’s decision is therefore internally inconsistent and inadequately explained, it is likewise arbitrary and capricious.
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93. For these reasons, the 2019 Rule arbitrarily—and unlawfully—allows insurers with healthier enrollees to pay less, thereby decreasing the payments that insurers with sicker enrollees will receive. Experience with other systems suggests that insurers will respond by skimping on the quality of care or altering benefit design to try to lower cost for or avoid sicker enrollees altogether.92 It will also cause insurers to raise premiums now on account of the added uncertainty of state action in the future, as well as the inadequacy of compensation once a state does act. This would discourage enrollment of healthy enrollees while disincentivizing employers from enrolling less healthy enrollees—those more likely to need health coverage in the first place—thereby increasing the number of underinsured or uninsured.
2. Curtailing Review of Insurance Rate Increases 94. The 2019 Rule also decreases the federal government’s role in reviewing insurance rates, giving insurers greater flexibility to increase premiums without any justification. Under the ACA, “[t]he Secretary, in conjunction with States, shall establish a process for the annual review . . . of unreasonable increases in premiums for health insurance coverage.” 42 U.S.C. § 300gg-94(a)(1). Pursuant to this statutory duty, CMS has promulgated regulations that require insurers to justify annual rate increases above a given threshold. See 45 C.F.R. §§ 154.101 et seq. 95. The 2019 Rule, however, changes this scheme—and thereby flouts CMS’s statutory duties—in two respects. First, the 2019 Rule exempts student health plans from rate review beginning July 1, 2018. 83 Fed. Reg. at 16,972. Second, the 2019 Rule raises the threshold for rate review to rate increases of 15 percent rather than the current 10 percent. Id. at
92 Wynand P.M.M. van de Ven et al., Risk Selection Threatens Quality of Care for Certain Patients: Lessons from Europe’s Health Insurance Exchanges, Health Affairs (Oct. 2015), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2014.1456.
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16,972-73. Both of these changes limit the federal government’s review of unwarranted rate increases and are unlawful.
96. To start, the 2019 Rule’s carve-out for student health plans is contrary to the text of the ACA. As explained above, the ACA requires review of “unreasonable increases in premiums for health insurance coverage,” 42 U.S.C. § 300gg-94(a)(1), which are defined as “benefits consisting of medical care,” id. § 300gg-91(b)(1)—a term that encompasses student health plans, which plainly provide medical care benefits like any other health insurance plan. Currently, the only exceptions to rate review are for “excepted benefits” and “grandfathered health plan” coverage, both of which are mandated by statute, see 42 U.S.C. §§ 300gg-91(c), 18011, and for large group plan rates, which are negotiated on a group-by-group basis and therefore cannot be effectively reviewed. By its plain terms, therefore, the ACA requires rate review of student health plans.
97. Moreover, the 2019 Rule’s student health plan exception is arbitrary and capricious. As CMS admitted, “[s]tudent health insurance coverage is considered by HHS to be a type of individual market coverage and is generally subject to . . . individual market requirements.” 83 Fed. Reg. at 16,972. CMS provided an insufficient explanation for its decision to change course and treat student health plans like large group plans rather than individual plans. CMS also failed to meaningfully address comments that explained how exempting such plans “would result in minimal oversight and decreased affordability.” Id. Instead, CMS argued that states can step in by engaging in rate review themselves. Id. Acknowledging that some states lack “an Effective Rate Review Program,” however, CMS claimed that it would continue to monitor rates “based on complaints and as part of targeted market conduct examinations,” id.—
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ignoring the need for automatic, systemic review of increased rates that underlies the rate review program.
98. The 2019 Rule’s increased threshold for rate review is also arbitrary and capricious. CMS raised the threshold “in recognition of significant rate increases,” 83 Fed. Reg. at 16,972—but larger rate increases are a reason for more, rather than less, review. CMS also gave short shrift to the “many” commenters concerned about increasing rates, arguing that the increased threshold would have implicated only one rate filing later found to be unreasonable. Id. at 16,973. In doing so, CMS ignored the fact that one of the core functions of rate review is to deter unreasonable increases from being submitted in the first place. CMS again invoked state rate review procedures as a stopgap measure, see id.—meaning that its explanation is again deficient for the reasons stated above. All told, CMS failed to consider important aspects of the problem, rendering its decision arbitrary and capricious.
99. Overall, the 2019 Rule’s unlawful changes to rate review will make it easier for insurers to increase rates without adequate justification; the purpose of rate review is for insurance commissioners and the public to examine the proposed reasons for health insurance premium increases in the individual and small-group market and adjust them as appropriate to improve affordability for consumers. In 2011, one in five proposed premium increases was reduced through rate review, with rates that went into effect approximately one-fifth lower than those initially requested by the insurer.93 In 2015, rate review lowered premiums in the individual and small group markets by $1.5 billion.94 And if prices are permitted to increase
93 Kaiser Family Foundation, Quantifying the Effects of Health Insurance Rate Review 3 (Oct. 2012), https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8376.pdf. 94 HHS, Rate Review Annual Report 5 (Dec. 2015), https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/RateReview-Annual-Report_508.pdf.
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without the significant check provided by rate review, individuals will increasingly decide to go without appropriate coverage or any coverage at all—driving up the rate of uninsured and underinsured individuals.
3. Reducing Rebates for Poor Insurer Performance 100. Lastly, the 2019 Rule makes it easier for insurers to avoid paying rebates to consumers if they provide subpar coverage. Under the ACA, insurers must pay rebates if the percentage of each premium that they spend on paying claims and improving their services—the “medical loss ratio” or “MLR”—drops below 85 percent (for large group insurance plans) or 80 percent (for small group and individual insurance plans). 42 U.S.C. § 300gg-18(b)(1)(A). “These minimum MLR standards are intended to help ensure that individuals covered under private health insurance plans (enrollees) receive adequate value for their premiums and to create incentives for insurers to become more efficient in their operations.”95 101. The 2019 Rule, however, alters the method by which rebates are awarded in two ways. First, the 2019 Rule allows insurers to claim a flat 0.8 percent of premium credit for quality improvement activities (“QIA”)—i.e., “activities that improve health care quality,” 42 U.S.C. § 300gg-18(a)(2)—when calculating medical loss ratio, rather than a percent based on the amount actually spent on such activities, see 83 Fed. Reg. at 17,032-33. In other words, the 2019 Rule allows insurers to take credit for improving their services whether or not they actually did so. Second, the 2019 Rule makes it easier for states to request reduced medical loss ratio thresholds in multiple respects: among other things, the Secretary may lower the threshold if doing so would somehow “help stabilize the individual market in that [s]tate,” id. at 17,034; the
95 GAO-14-580, Private Health Insurance: Early Effects of Medical Loss Ratio Requirements and Rebates on Insurers and Enrollees 1, U.S. Government Accountability Office (July 2014), https://www.gao.gov/assets/670/664719.pdf.
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state need not provide information about its MLR standard formula for assessing compliance, id.; and the state need not comply with several other data collection requirements, id. at 17,033-34. All of these changes are unlawful.
102. To start, allowing insurers to claim a flat credit for quality improvement activities is contrary to the text of the ACA. The ACA requires an issuer to report “the percentage of total premium revenue . . . that such coverage expends” for, among other things, “activities that improve health care quality.” 42 U.S.C. § 300gg-18(a)(2). The statute’s language requires insurers to report the amount actually spent on QIA—much like insurers are obligated to report how much they actually spent on reimbursing claims. Id. § 300gg-18(a)(1). The statute does not permit CMS to instead throw up its hands and give every insurer the same credit, whether or not the funds are actually expended. To the contrary, that approach undermines the statute’s clear purpose: to encourage insurers to improve the quality of their services, lest they be forced to pay a rebate.96
103. CMS’s decision is also arbitrary and capricious. CMS decided to allow insurers to claim a flat credit because of what it saw as “issuers’ relatively low and consistent reported expenditures on QIA and the significant burden associated with identifying, tracking, and reporting these expenditures.” 83 Fed. Reg. at 17,032. But CMS failed to corroborate its assertions of substantial burden, or to meaningfully address comments pointing out that “allowing issuers who spend nothing on QIA to take a standardized credit for QIA would disincentivize issuers from making such investments.” Id. Recognizing the validity of those concerns, CMS did modify its proposal to specify that insurers “that elect the standardized QIA reporting option must apply it consistently across all of their [s]tates and markets.” Id. at 17,033.
96 Id.
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That is an inadequate bandaid; nothing would stop an insurer from consistently failing to engage in quality improvement and simply claiming the newly invented flat-rate credit for all their plans. CMS added that insurers have other incentives to improve quality, but Congress explicitly created the MLR scheme because it believed that additional incentives are necessary.
104. CMS’s attempts to make it easier for states to request reduced MLR thresholds constitute another impermissible effort to lift burdens on insurers at the expense of consumers. In doing so, CMS recognized that “the adjustments to the individual market MLR standard should not undermine consumer protections and that the integrity of the adjustment review process should not be compromised.” 83 Fed. Reg. at 17,036. But CMS simply asserted that states should be permitted to “develop strategies involving an adjusted MLR standard” without complying with what it deemed “duplicative, burdensome requirements” or “up-front restrictions on how much or what direction of an adjustment a State may seek.” Id. CMS therefore failed to weigh the importance of a robust MLR system, and the importance of each individual requirement, against the purported administrative hurdles those requirements impose. That failure, too, is arbitrary and capricious.
105. These changes will increase the rate of the uninsured and underinsured. Since the ACA’s medical loss ratio policy began in 2011, enrollees in the individual market have received nearly $1.2 billion in rebates.97 Preliminary data for 2017 suggest that rebates will be much higher than the previous year, with the average MLR dropping from 96 to 82 percent in the
97 CMS, Summary of 2016 Medical Loss Ratio Results, https://www.cms.gov/CCIIO/Resources/DataResources/Downloads/Medical_Loss_Ratio_2016_Annual_Report.pdf.
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individual market.98 By allowing insurers to increasingly avoid paying these rebates, the 2019 Rule will effectively cause consumers to pay more for worse insurance, leading to an increase in the number of consumers that lack appropriate coverage. II. Additional Executive Actions Demonstrating Defendants’ Violation of Their
Constitutional Duty to Faithfully Execute the ACA 106. As detailed above, the 2019 Rule includes at least nine separate provisions that illustrate how Defendants are violating their obligation to faithfully implement the Affordable Care Act. In addition, President Trump and his Administration have taken many other actions with the intent and effect of sabotaging the Act generally and its private insurance reforms and exchanges in particular. Taken together, all of these actions—those described above and those detailed below—establish Defendants’ pattern and practice of taking executive action to undermine the Act, and they demonstrate Defendants’ violation of the Take Care Clause.
Directing Agencies to Sabotage the Act 107. Hours after he was sworn in, President Trump signed Executive Order No. 13,765, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” 82 Fed. Reg. 8,351 (Jan. 20, 2017). The Order turned what had been candidate Trump’s promises to repeal the ACA into President Trump’s official policy. Id. § 1 (“It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act . . . .”). “[P]ending such repeal,” the Order directs Administration officials to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act.” Id.; see id. §§ 2-4. Yet President Trump’s estimation of whether or not the Act’s reforms are “warranted” does not, and must not, affect his obligation to take care that the Act is faithfully
98 Cynthia Cox et al., Individual Insurance Market Performance in 2017 at 2, Kaiser Family Foundation (May 2018), http://files.kff.org/attachment/Issue-Brief-Individual-Insurance-MarketPerformance-in-2017.
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executed, and actions his Administration has characterized as “consistent with law” have flown in the face of that constitutional obligation.
108. Executive Order No. 13,765 is not merely a statement of policy. Rather, its issuance marked the start of the Trump Administration’s usurpation of Congress’s authority in its unilateral effort to repeal the ACA. The Order authorizes agencies to “waive, defer, grant exemptions from, or delay the implementation of any” ACA provision or requirement that, in the Administration’s estimation, would impose fiscal or regulatory burdens. Id. § 2. As the press reported at the time, the Order “essentially allow[ed] the dismantling of the law to begin even before Congress move[d] to repeal it.”99 Indeed, five days after signing the Executive Order, President Trump affirmed his agenda to “let [the ACA] explode” so as to be better positioned to “go in and . . . do a new plan.” “We’re gonna have an explosion,” he promised,100 and Executive Order No. 13,765 delivered.
109. Joshua Peck, who served as Chief Marketing Officer for the federal government’s ACA exchange (HealthCare.gov) until 2016, estimated that by signaling that the Administration might not enforce the ACA’s individual mandate, Executive Order No. 13,765 resulted in 130,000 fewer individuals enrolling in health insurance during the open enrollment period for 2017 plan year insurance that was ongoing at the time.101 And as projected, within a month of its
99 Julie Hirschfield Davis & Robert Pear, Trump Issues Executive Order Scaling Back Parts of Obamacare, New York Times, Jan. 20, 2017, https://www.nytimes.com/2017/01/20/us/politics/trump-executive-order-obamacare.html. 100 Transcript: ABC News Anchor David Muir Interviews President Trump, ABC News (Jan. 25, 2017), http://abcnews.go.com/Politics/transcript-abc-news-anchor-david-muir-interviewspresident/story?id=45047602. 101 Joshua Peck, Trump Blocked Nearly 500,000 People From Getting Coverage, Medium, Feb. 2, 2017, https://medium.com/get-america-covered/trumped-blocked-nearly-500-000-peoplefrom-getting-coverage-70317eedaaa4.
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being issued, the Executive Order indeed resulted in reduced enforcement of the individual mandate,102 as further detailed below.
110. By issuing and implementing Executive Order No. 13,765, President Trump and his Administration have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, the Order has limited and will likely continue to reduce progress in decreasing the number of uninsured Americans, directly undermining the Act’s aim. And second, by shrinking the risk pool, the Order will make health insurance less affordable, a result counter to the Affordable Care Act’s central goal—a goal so critical that it is featured in the Act’s title.
Attempting to Destabilize the Exchanges 111. As described above, Congress constructed the ACA to both support, and be supported by, robust enrollment in ACA-compliant plans on ACA exchanges. Key to strong enrollment numbers are competitive exchanges with low premiums that attract a broad range of consumers, not just those with high medical expenses, and a broad range of insurers, to foster competition. If one were setting out to weaken the exchanges, therefore, one could hardly do better than to sow uncertainty about the rules that govern them and the government support for them. Insurance companies strive to minimize risk and uncertainty. When risk and uncertainty increase, issuers raise premiums to compensate, or even exit insurance markets entirely. Sowing uncertainty in insurance markets is precisely what the Trump Administration has done from day
102 Michael Hiltzik, Trump’s IRS Stages a Stealth Attack on Obamacare, Los Angeles Times, Feb. 15, 2017, http://www.latimes.com/business/hiltzik/la-fi-hiltzik-irs-obamacare-20170215story.html.
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one, including by issuing Executive Order No. 13,765, described above, and by taking the discrete executive actions detailed below.
112. Exemplifying the Trump Administration’s strategy is the way in which the Administration, over the course of the summer and the fall in 2017, repeatedly threatened to discontinue reimbursing insurers for cost-sharing reductions—to stop paying insurers back for the reductions in copayments, coinsurance, and so on, that the Act requires them to provide to consumers.103 At the time, pending litigation raised questions concerning those payments, but the merits of those questions are not what is at issue here; rather, the Administration’s actions, aimed toward provoking a legislative repeal, were deliberately designed to introduce uncertainty into the exchanges through threats that the CSR payments would cease. As the President himself asserted, in one of his many intentionally intimidating statements, “If you don’t make them, [the ACA exchange] fails.”104
113. The threats served their purpose. Throughout the country, some insurers that had previously sold health insurance through the exchanges for the 2017 plan year exited them entirely, refusing to offer coverage for the 2018 plan year because of the Administration’s refusal
103 See, e.g., Chad Terhune & Julie Appleby, Uncertainty Over Obamacare Leaves Next Year’s Rates in Limbo, NPR, July 19, 2017, https://www.npr.org/sections/healthshots/2017/07/19/538099050/uncertainty-over-obamacare-leaves-next-years-rates-in-limbo; Robert Pear & Thomas Kaplan, Trump Threat to Obamacare Would Send Premiums and Deficits Higher, New York Times, Aug. 15, 2017, https://www.nytimes.com/2017/08/15/us/politics/cboobamacare-cost-sharing-reduction-trump.html. 104 Aaron Blake, President Trump’s Thoroughly Confusing Fox Business Interview, Annotated, Washington Post, Apr. 12, 2017, https://www.washingtonpost.com/news/thefix/wp/2017/04/12/president-trumps-throughly-confusing-fox-business-interviewannotated/?utm_term=.0b4ab6f8b1a6.
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to guarantee that CSR payments would continue.105 That left some counties with decreased competition among issuers, which (again) drives up prices and decreases overall enrollment. Indeed, at the time, the Congressional Budget Office warned that terminating CSR payments could increase the percentage of people living in areas not served by a single insurer between 2018 and 2020.106 Other insurers raised premiums by as much as 23 percent for 2018 to guard against the risk that they would not receive the payments. And (again)—as the Administration knew—rising premiums and decreased enrollment threaten the long-term success of the ACA by increasing adverse selection and weakening the market, leading to yet lower enrollment and higher premiums.
114. Tellingly, the Trump Administration ultimately stopped making CSR payments on October 12, 2017, shortly after the reconciliation instruction for legislation to repeal and replace the ACA expired.107 Confirming his aim all along, days later President Trump declared that the Act was “dead” and “gone,” and that “[t]here is no such thing as Obamacare anymore.”108 Some insurers and insurance commissioners adjusted to the Administration’s action by raising premiums rather than pulling out of the exchanges entirely. The Congressional Budget Office estimated that 2018 silver plan premiums were 10 percent higher because of the
105 Rachel Roubein, No Certainty on Cost-sharing Payments to Insurers, The Hill, June 8, 2017, http://thehill.com/policy/healthcare/336974-no-certainty-on-cost-sharing-payments-to-insurers (citing the exit of Anthem in Ohio in particular). 106 Congressional Budget Office, The Effects of Terminating Payments for Cost-Sharing Reductions (Aug. 15, 2017), https://www.cbo.gov/publication/53009. 107 Dan Mangan, Obamacare Bombshell: Trump Kills Key Payments to Health Insurers, CNBC, Oct. 12, 2017, https://www.cnbc.com/2017/10/12/obamacare-bombshell-trump-kills-keypayments-to-health-insurers.html. 108 Rebecca Savransky, Trump: There Is No Such Thing as ObamaCare Anymore, The Hill, Oct. 16, 2017, http://thehill.com/policy/healthcare/355658-trump-there-is-no-such-thing-asobamacare-anymore.
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Administration’s actions, and will be 20 percent higher by 2021.109 While few enrollees actually
paid this sticker price in light of the ACA’s premium tax credits, this likely contributed to a reduction in enrollment among people not eligible for premium tax credits.110 And the cost to the
federal government of those premium tax credits—and, therefore, to federal taxpayers—
ballooned.
115. The Administration’s approach to CSR payments—create uncertainty at every
turn—weakened insurance markets, particularly given the Administration’s timing. One recent
study explains:
Several subjects amplified that the Trump [A]dministration’s decision to cancel cost-sharing reduction payments for the final quarter of 2017, well after it was too late for insurers to adjust their 2017 rates, and just a few days before their deadline to decide on 2018 participation, “had a concussive quality” and was the “straw that broke the camel’s back” because it “sent a clear signal” to insurers that they “cannot rely on the federal government to keep its [funding] commitments” in the future . . . .111 These views emphasize that “[a]lthough actuarial uncertainty is always present, what has
especially bedeviled ACA insurers is the political uncertainty over adverse change in rules.”112 Over time, as further detailed below, Defendants have recognized and
deliberately exploited their ability to generate such uncertainty, and experts have found—
as the Trump Administration has known—that many of the actions discussed below will
109 May 2018 CBO Report, supra n.9, at 7, 9. 110 Jeanne Lambrew, No “ObamaCare Implosion” from Trump Payment Freeze, The Century Foundation, Apr. 19, 2018, https://tcf.org/content/commentary/no-obamacare-implosion-trumppayment-freeze/. 111 Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 20, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-and-Strenghtening-theIndividual-Health-Insurance-Market2.pdf (alteration in original). 112 Id. at 19.
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lead to increased premiums on ACA exchanges.113 If these actions are allowed to stand, they will contribute to the Administration’s stated goal of undermining the Act.
1. Promoting Bare-Bones Plans to Try to Weaken ACA Exchanges 116. On October 12, 2017, President Trump signed Executive Order No. 13,813, entitled “Promoting Healthcare Choice and Competition Across the United States,” 82 Fed. Reg. 48,385 (Oct. 12, 2017). Alleging that the ACA “has severely limited the choice of healthcare options available to many Americans and has produced large premium increases in many State individual markets for health insurance,” id. § 1(a), the Order directs the Administration to “prioritize three areas for improvement in the near term: association health plans (AHPs), shortterm, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs),” id. § 1(b). All three—AHPs, STLDI, and HRAs—provide coverage, often bare-bones coverage, that does not need to comply with the ACA’s requirements.114 For example, short-term, limitedduration insurance can refuse to offer coverage at all, or exclude coverage, for preexisting conditions; charge a higher rate based on an individual’s health history and health status; exclude benefits such as prescription drugs, maternity care, mental health services, and substance use
113 See American Academy of Actuaries, Drivers of 2019 Health Insurance Premium Changes 2, 4, http://www.actuary.org/files/publications/Premium_Drivers_2019_061318.pdf (addressing the effect of the elimination of cost-sharing reduction payments, and of expanded access to STLDI and AHPs, on premiums). 114 Association health plans purport to group small businesses, including self-employed workers, together to obtain coverage as though they were a single large employer. Short-term, limitedduration insurance, in keeping with its name, has historically been used to provide stop-gap coverage, for example when an individual transitions from one type of major medical coverage to another. Health reimbursement arrangements, also known as health reimbursement accounts, are funds set aside by employers to reimburse employees for qualified medical expenses. See generally Bernadette Fernandez et al., Background Information on Health Coverage Options Addressed in Executive Order 13813 at i-ii, Congressional Research Service, https://fas.org/sgp/crs/misc/R45216.pdf.
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disorder services; can include a dollar cap on services and stop paying medical bills after that cap
is reached; and are not required to limit consumer out-of-pocket costs.
117. By directing his Administration to expand access to bare-bones plans like AHPs,
STLDI, and HRAs, Executive Order No. 13,813 will “open doors for young and healthy people
to flee [the] ACA-compliant market,” i.e., the exchanges, “and find lower premiums” off of the exchanges.115 Because on-exchange purchasers will as a group be older and sicker than they have
been in prior years, premiums for on-exchange purchasers will increase. This will lead to
decreased enrollments in ACA-compliant plans, particularly among the young and healthy. The
Order will thereby increase costs and decrease coverage, phenomena that the ACA was designed
to prevent.
118. Specifically, the Urban Institute estimated that expanded access to short-term, limited duration policies would cause 2.6 million people to lose coverage in 2019.116 The Office
of the Actuary at CMS projected that such enhanced access would increase premiums for ACA-
115 Timothy Jost, Trump Executive Order Expands Opportunities For Healthier People To Exit ACA, Health Affairs Blog, Oct. 12, 2017, http://www.healthaffairs.org/do/10.1377/hblog20171022.762005/full/; see Mark A. Hall & Michael J. McCue, How Do Noncompliant Health Plans Affect the Market?, To the Point, Nov. 15, 2017, http://www.commonwealthfund.org/blog/2017/how-do-noncompliant-health-plansaffect-market (“Actuaries and other analysts have expressed concern that allowing compliant and noncompliant health plans to be sold side by side in the same market could destabilize the market for the compliant plans. If people who benefit the least from the standard requirements are allowed to opt for cheaper noncompliant plans, then the risk pool for the compliant plans will worsen, driving their prices higher, and possibly to an unsustainable level.”). 116 See Linda J. Blumberg et al., Updated: The Potential Impact of Short-Term Limited-Duration Policies on Insurance Coverage, Premiums, and Federal Spending 6, Urban Institute (Mar. 2018), https://www.urban.org/sites/default/files/publication/96781/2001727_updated_finalized.pdf [hereinafter March 2018 Urban Institute Study].
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compliant plans by 3 to 6 percent.117 And one analysis estimated that increased access to association health plans would increase premiums for ACA-compliant individual market plans by 1.4 to 4.4 percent.118 Overall, the Congressional Budget Office estimated that the combined effect of additional access to short-term, limited duration insurance and association health plans would increase premiums for ACA-compliant plans by 2 to 3 percent, with 6 million people enrolling in these STLID and AHPs—plans with far fewer consumer protections.119
119. Given this, it is no surprise that one analysis found that more than 98 percent of healthcare groups that commented on the Administration’s proposed STLDI regulation expressed serious concerns or opposed it outright; the figure was 95 percent for the AHP regulation. “Among the groups were virtually every leading patient advocate in the country, including the American Lung Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the March of Dimes, the National Multiple Sclerosis Society, Susan G. Komen, AARP and the advocacy arm of the American Cancer Society. Not a single group representing patients, physicians, nurses or hospitals voiced support in the public comments for the two Trump [A]dministration proposals.”120
117 Paul Spitalnic, Estimated Financial Effects of the Short-Term, Limited-Duration Policy Proposed Rule 2, CMS (Apr. 6, 2018), https://www.cms.gov/Research-Statistics-Data-andSystems/Research/ActuarialStudies/Downloads/STLD20180406.pdf. 118 Sabrina Corlette et al., New Rules to Expand Association Health Plans, The Actuary (May 2018), http://www.theactuarymagazine.org/new-rules-to-expand-association-health-plans/. 119 May 2018 CBO Report, supra n.9, at 10. 120 Noam N. Levey, Trump’s New Insurance Rules Are Panned by Nearly Every Healthcare Group That Submitted Formal Comments, Los Angeles Times, May 30, 2018, http://www.latimes.com/politics/la-na-pol-trump-insurance-opposition-20180530-story.html.
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120. In signing Executive Order No. 13,813, President Trump confirmed its intent,
saying, “I just keep hearing repeal-replace, repeal replace. Well, we’re starting that process.”121
And thus, by using Executive Order No. 13,813 to begin unilateral executive efforts to repeal the
ACA, the Administration directly usurped Congress’s lawmaking function. At least one member
of Congress, Sen. Rand Paul, claimed to have worked directly with President Trump to craft the
Order, in order to achieve the reforms that Congress itself had failed to advance.122 And a
comparison of the Order with Sen. Paul’s proposed Obamacare Replacement Act, S. Bill No.
222, 115th Congress (2017-18),123 reveals multiple similarities.
121. In keeping with Executive Order No. 13,813’s directive, as of the date of this
filing the Administration has finalized rules expanding access to association health plans124 and
short-term limited duration insurance.125
122. By issuing and implementing Executive Order No. 13,813, Defendants have
violated their constitutional obligation to take care that the ACA is faithfully executed. Rather,
they have purposefully undermined the Act—the aim of which is to expand access to quality
121 Margot Sanger-Katz, What We Know About Trump’s Twin Blows to Obamacare, New York Times, Oct. 12, 2017, https://www.nytimes.com/2017/10/12/upshot/what-did-trumps-healthcare-executive-order-do.html. 122 See Max Greenwood, Rand Paul: I’ve Been Working with Trump for Months on Health Care Order, The Hill, Oct. 10, 2017, http://thehill.com/policy/healthcare/354663-rand-paul-ive-beenworking-with-trump-for-months-on-health-care-order. 123 Available at https://www.congress.gov/bill/115th-congress/senate-bill/222/text. 124 See Department of Labor, Definition of “Employer” Under Section 3(5) of ERISA— Association Health Plans, 83 Fed. Reg. 28,912 (June 21, 2018); see also New York v. U.S. Dep’t of Labor, No. 18-cv-1747 (D.D.C. filed July 26, 2018) (challenging the Administration’s AHP rule under the Administrative Procedure Act). 125 See Department of the Treasury, Final Rule, Short-Term, Limited-Duration Insurance, -- Fed. Reg. -- (Aug. 1, 2018), https://www.cms.gov/CCIIO/Resources/Files/Downloads/dwnlds/CMS9924-F-STLDI-Final-Rule.pdf; see also Department of the Treasury, Short-Term, LimitedDuration Insurance, 83 Fed. Reg. 7,437 (Feb. 21, 2018) (proposed rule).
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coverage—in at least two ways. First, the Order will result in fewer individuals receiving ACAcompliant health insurance coverage, directly undermining the Act’s goal. And second, by decreasing enrollments in ACA-compliant plans, the Order will increase premiums for quality plans, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
2. Undermining the Individual Mandate 123. As noted above, when Congress enacted the ACA it imposed an individual mandate that now, in light of congressional amendments in 2017, requires those without insurance to make a shared responsibility payment through December 31, 2018. See 26 U.S.C. §§ 5000A, 5000A note. On February 14, 2017, citing President Trump’s Executive Order No. 13,765, the Internal Revenue Service announced that it was scrapping a new policy that had been designed to strengthen the individual mandate by automatically rejecting tax returns of those who fail to answer whether they had health insurance.126 The press reported that this change signaled that the Administration was “loosening up on enforcement of . . . [the] individual mandate.”127 Indeed, the IRS confirmed that at the direction of Executive Order No. 13,765, its decision aimed “to reduce potential burden”—i.e., to lessen enforcement—of the ACA.128 124. Although the IRS subsequently reversed course, it waited until October 2017 to do so.129 This was after insurers indicated, in summer 2017, that they would either raise
126 See Peter Sullivan, IRS Loosening Enforcement of ObamaCare Mandate, The Hill, Feb. 15, 2017, http://thehill.com/policy/healthcare/319672-irs-takes-step-against-obamacare-mandate. 127 Id. 128 Id. 129 Michael Cohn, IRS Won’t Accept Tax Returns Next Year Without Health Coverage, Accounting Today, Oct. 17, 2017, https://www.accountingtoday.com/news/irs-wont-accept-taxreturns-next-year-without-health-coverage.
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premiums or withdraw from the market if they did not have clarity on enforcement prior to the
September 5, 2017 rate filing deadline.130 The months-long threat of underenforcement of the
individual mandate created uncertainty, thereby weakening markets and causing insurers to
increase prices.
125. On November 1, 2017, the first day of open enrollment, President Trump
suggested that Congress repeal the individual mandate as part of a tax reform package.131 He did
not, like his predecessor, encourage people to review their health insurance options and sign up
for coverage.132 Then, on November 6, 2017, the press reported that in the face of Congress’s
unwillingness to pass a bill repealing the individual mandate, President Trump was readying an
executive order to attempt the same, by unilateral executive action.133
126. Even after the 2017 tax bill reduced the shared responsibility payment to $0 for
the months starting after December 31, 2018, the Administration has endeavored to further
weaken the individual mandate while the payment remains in effect. For example, when it issued
the 2019 Rule, CMS also issued guidance providing expanded access to so-called “hardship
exemptions” from the mandate.134
130 Rabah Kamal et al., An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges, Kaiser Family Foundation (Aug. 10, 2017), https://www.kff.org/healthreform/issue-brief/an-early-look-at-2018-premium-changes-and-insurer-participation-on-acaexchanges/. 131 @realDonaldTrump, Twitter (Nov. 1, 2017, 7:59 AM), https://twitter.com/realDonaldTrump/status/925739132579729420. 132 Sarah Kliff, Trump Won’t Advertise Obamacare, So Obama is Stepping In, Vox, Nov. 1, 2017, https://www.vox.com/health-care/2017/11/1/16592274/obama-obamacare-video. 133 Kimberly Leonard, Trump Readies Executive Order to Unravel Obamacare’s Individual Mandate, Washington Examiner, Nov. 6, 2017, http://www.washingtonexaminer.com/trumpreadies-executive-order-to-unravel-obamacares-individual-mandate/article/2639728. 134 CMS, Guidance on Hardship Exemptions from the Individual Shared Responsibility Provision for Persons Experiencing Limited Issuer Options or Other Circumstances (Apr. 9, 2018), https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2018-
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127. There is no question that the ACA’s individual mandate has had an effect on
individuals’ decisions to purchase insurance. For instance, the uninsured rate among high-
income young adults, who faced increases in premiums due to the ACA insurance reforms,
sharply decreased between 2013 and later years, suggesting that the mandate affected their
insurance decisions.135 Moreover, multiple studies show that uninsured people who signed up
due to the mandate have health costs significantly below other enrollees.136
128. Congress acted to reduce the shared responsibility payment associated with the
mandate to $0 knowing that it would increase premiums by 10 percent in 2019. But prior to that,
the Trump Administration’s threats not to enforce the mandate drove up 2018 premiums all by
themselves. Preliminary analyses estimate that the deliberate uncertainty around the mandate’s
enforcement that the Administration introduced accounted for up to a 20 percent increase in 2018
individual market premiums.137 The Congressional Budget Office also attributed higher
premiums for 2018 and insurer withdrawals from the exchanges to uncertainty about the
Hardship-Exemption-Guidance.pdf; see also Dan Diamond, Seema Verma Previews Medicare Agenda, Politico, Mar. 23, 2018, https://www.politico.com/newsletters/politicopulse/2018/03/23/seema-verma-previews-medicare-agenda-148797 (reporting that Defendant Verma was “weighing more exemptions to the ACA individual mandate”). 135 Matthew Fiedler, How Did the ACA’s Individual Mandate Affect Insurance Coverage?, USC-Brookings Schaeffer Initiative for Health Policy (May 2018), https://www.brookings.edu/wp-content/uploads/2018/05/coverageeffectsofmandate2018.pdf 136 See, e.g., Martin B. Hackmann et al., Adverse Selection and An Individual Mandate: When Theory Meets Practice, 105 American Economic Review 1030 (2015); Amy Finkelstein et al., Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts (National Bureau of Economic Research, Working Paper No. 23668, 2017), available at https://scholar.harvard.edu/files/mshepard/files/finkelstein_hendren_shepard_SubsidizingInsuran ce.pdf. 137 Rabah Kamal et al., An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges, Kaiser Family Foundation (Aug. 10, 2017), https://www.kff.org/healthreform/issue-brief/an-early-look-at-2018-premium-changes-and-insurer-participation-on-acaexchanges/.
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enforcement of the individual mandate.138 Those premium increases, in turn, made it more difficult for other segments of the population to obtain coverage, eroding coverage overall.
129. By threatening underenforcement of the individual mandate, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, threatening underenforcement of the individual mandate will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, by decreasing health insurance enrollments, threatening underenforcement of the individual mandate will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
3. Refusing to Grant State Waiver Requests that Would Further the ACA’s Goals
130. The ACA permits states to apply for waivers of some of the law’s requirements in order to promote innovative policies that—and this is key—”provide coverage that is at least as comprehensive as” ACA-compliant coverage. 42 U.S.C. § 18052(b)(1)(A).
131. Although the Trump Administration has encouraged states to apply for waivers,139 it has either denied or not responded to many of the requests for waivers that it has received,140
138 May 2018 CBO Report, supra n.9, at 2-3. 139 See, e.g., Letter from Thomas E. Price, former HHS Secretary, to state governors (Mar. 13, 2017), https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Downloads/March-13-2017-letter_508.pdf (“We welcome the opportunity to work with states on Section 1332 State Innovation Waivers….”). 140 See Alison Kodak, Administration Sends Mixed Signals On State Health Insurance Waivers, NPR (Oct. 19, 2017), http://www.npr.org/sections/healthshots/2017/10/19/558310690/administration-sends-mixed-signals-on-state-health-insurancewaivers. See generally Section 1332: State Innovation Waivers, CMS,
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especially when it believes that granting the waivers would faithfully implement the Act by
expanding access to coverage. (By contrast, the Administration has eagerly processed state
waivers that are designed to reduce access to quality health insurance.141) Indeed, the
Administration has dragged its feet even though some states’ waiver requests are designed to
lower premiums and stabilize insurance markets. For example, the press reported that, upon
learning about Iowa’s waiver request and claims that the state’s plan would improve its
exchange, President Trump personally called Defendant Seema Verma, whose agency—CMS—
is responsible for processing waiver requests, and instructed her to deny Iowa’s application.142
132. The Administration’s actions have frustrated states’ efforts to support the ACA
and its reforms and to expand access to affordable, quality health insurance. For example, in
withdrawing its waiver request owing to the Administration’s delay, Oklahoma Secretary of
Health and Human Services Terry Cline stated that CMS’s failure to approve the waiver would
“prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance
premiums in 2018.”143
https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Section_1332_State_Innovation_Waivers-.html (listing pending, approved, and denied waiver requests). 141 See Bruce Jaspen, Trump’s Medicaid Work Rules Hit States With Costs And Bureaucracy, Forbes, July 22, 2018, https://www.forbes.com/sites/brucejapsen/2018/07/22/trumps-medicaidwork-rules-hit-states-with-costs-and-bureaucracy/#745af26066f5; see also Stewart v. Azar, -- F. Supp. 3d --, No. 18-cv-152, 2018 WL 3203384 (D.D.C. June 29, 2018). 142 See Juliet Eilperin, As ACA Enrollment Nears, Administration Keeps Cutting Federal Support of the Law, Washington Post, Oct. 5, 2017, https://www.washingtonpost.com/politics/asaca-enrollment-nears-administration-keeps-cutting-federal-support-of-thelaw/2017/10/05/cc5995a2-a50e-11e7-b14f-f41773cd5a14_story.html?utm_term=.4c73ed0cbe7d. 143 Letter from Terry Cline, former Oklahoma Health Commissioner, to Steve Mnuchin, Secretary, United States Department of the Treasury, and Thomas E. Price, former HHS Secretary (Sept. 29, 2017), https://www.ok.gov/health2/documents/Oklahoma%201332%20Waiver%20Withdrawal%209.29 .17.pdf.
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133. By delaying and denying waiver requests, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, delaying and denying waiver requests will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, delaying and denying waiver requests will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
4. Attempting to Weaken Public Confidence in ACA Exchanges 134. Statements by President Trump and others in his Administration confirm that the driving force behind all of the Administration’s actions described here is to sabotage the Affordable Care Act. As exemplified by the statements catalogued above, see supra ¶¶ 42-46, the Trump Administration has been relentless in its efforts to paint a false picture of the Act as failing—or even, in President Trump’s words at a meeting of his Cabinet, as already “dead. It’s gone. It’s no longer—you shouldn’t even mention [it]. It’s gone. There is no such thing as Obamacare anymore.”144 The number of times that President Trump and others in his Administration have called “Obamacare . . . a disaster” can barely be counted.145 The President
144 Remarks by President Trump in Cabinet Meeting, The White House (Oct. 16, 2017), available at https://web.archive.org/web/20171016180503/https://www.whitehouse.gov/thepress-office/2017/10/16/remarks-president-trump-cabinet-meeting. 145 See, e.g., Jacqueline Thomsen, Trump Vows to Repeal and Replace ObamaCare ‘Disaster’, The Hill, Nov. 23, 2017, http://thehill.com/homenews/administration/361693-trump-vows-torepeal-and-replace-obamacare-disaster; Jay Willis, President Trump Couldn’t Repeal the Affordable Care Act, So He’s Trying to Sabotage It Instead, GQ, Sept. 1, 2017, https://www.gq.com/story/trump-sabotage-obamacare-marketing (collecting examples).
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has even gone so far as to assert that “ObamaCare is torturing the American People.”146 Vice President Mike Pence has called Obamacare a “nightmare.”147
135. It would be one thing if the Administration’s only goal were to build public
opposition to the Act, but that is not the case. Rather, the Administration’s communications
strategy is aimed at creating a false public impression about the ACA and reducing public
confidence in the law and its exchanges, thereby discouraging individuals from enrolling in
ACA-compliant insurance and weakening the exchanges. In March 2017, for example, HHS
launched an official website alleging “skyrocketing premiums and narrowing choices” in ACA
exchanges and asserting that the ACA “has done damage to” the market for individual insurance and “created great burdens for many Americans.”148 An official WhiteHouse.gov page likewise
proclaims that “Obamacare is hurting American families, farmers, and small businesses with skyrocketing health insurance costs.”149 And HHS press officials have labored to paint a picture of the ACA as “continu[ing] to collapse” and as having “been in a death spiral for years.”150
146 @realDonaldTrump, Twitter (July 25, 2017, 6:38 AM), https://twitter.com/realdonaldtrump/status/889796918615920640. 147 Juliet Eilperin et al., White House’s Decision to Atop ACA Cost-sharing Subsidies Triggers Strong Opposition, Washington Post, Oct. 13, 2017, https://www.washingtonpost.com/politics/white-house-tells-court-it-is-immediately-stoppingaca-cost-sharing-subsidies/2017/10/13/4c404234-b01d-11e7-be94fabb0f1e9ffb_story.html?noredirect=on&undefined=&utm_term=.2cc7c1747873&wpisrc=nl_m ost&wpmm=1. 148 Providing Relief Right Now for Patients, HHS, https://www.hhs.gov/healthcare/empoweringpatients/providing-relief-right-now-for-patients/index.html. 149 Healthcare, The White House, https://www.whitehouse.gov/issues/healthcare/. 150 Dan Mangan, Trump’s Health Chief Pushes ‘Waivers’ for States from Obamacare Rules, as HHS Says Program in ‘Death Spiral’, CNBC, May 16, 2017, https://www.cnbc.com/2017/05/16/trumps-health-chief-pushes-waivers-for-states-fromobamacare-rules.html.
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136. Less visibly, recent reports from the Sunlight Foundation have documented how
HHS has systematically removed information about the ACA from its websites.151 Worse,
Senators Schatz, Booker, and Murphy, “concerned that the use of appropriated funds to promote
legislation pending before Congress” to repeal the ACA “violate both HHS’s constitutional
responsibility to implement existing law, and legal prohibitions against using taxpayer dollars to
lobby in favor of pending legislation,” have collected numerous examples where HHS social
media accounts published “anti-ACA propaganda.”152 For example, then-Secretary of HHS Tom
Price tweeted videos that his agency produced to discredit the Act, see infra ¶ 156, with an
explicit admonition discouraging enrollment, commenting that “[u]nder Obamacare, coverage ≠
care.”153 Sec. Price also adorned social media posts featuring anti-ACA infographics with official
government logos.154 Such activities constitute impermissible uses of government funds; they
151 See Rachael Bergman, Affordable Care Act Page Quietly Removed from Medicare Website, Sunlight Foundation, May 17, 2018, https://sunlightfoundation.com/2018/05/17/affordable-careact-page-quietly-removed-from-medicare-site/; Rachel Bergman, Removal of the Affordable Care Act Website from within Medicaid.gov, Sunlight Foundation (July 2018), http://sunlightfoundation.com/wp-content/uploads/2018/07/AAR-7-CMS-Medicaid-ACA180710.pdf; see also Dan Diamond, Trump Policy Shop Filters Facts to Fit His Message, Politico, July 28, 2018, https://www.politico.com/story/2018/07/28/trump-facts-policy-shopadministration-research-714353. 152 Letter from Sen. Brian Schatz et al. to Thomas E. Price, former HHS Secretary, at 1 (July 21, 2017), https://www.schatz.senate.gov/imo/media/doc/7.21.17%20Schatz-BookerMurphy%20Letter%20to%20Sec.%20Price.pdf. 153 Id. at 5 (reproducing @SecPriceMD, Twitter (June 7, 2017, 4:42 PM), https://twitter.com/secpricemd/status/872554390506360833); see id. at 6-8 (reproducing additional examples). 154 Id. at 1, 9. See generally Audrey Carlsen & Haeyoun Park, The Same Agency That Runs Obamacare Is Using Taxpayer Money to Undermine It, New York Times, Sept. 4, 2017, https://www.nytimes.com/interactive/2017/09/04/us/hhs-anti-obamacare-campaign.html (collecting and displaying examples of anti-ACA videos, Twitter posts, infographics, and press releases publicized by Defendants, and citing instances where Defendants deleted materials from government websites that provided information about the Act).
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also exemplify how, rather than faithfully implement the ACA, the Trump Administration has endeavored to undermine it.
137. By working to weaken public confidence in the ACA and its exchanges, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, declining public confidence in the ACA’s insurance markets will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, declining public confidence will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
Working to Decrease Enrollment 138. Under the ACA, exchanges must “facilitate[] the purchase of qualified health plans.” 42 U.S.C. § 18031(b)(1)(a). Defendants, however, have shirked this duty in multiple ways, as detailed below, including by slashing funding for advertising and outreach and cutting in half the length of time during which federally-facilitated exchanges are open for enrollment. 139. As further discussed below, the Administration’s efforts to discourage enrollment are having effects. One study has found that two of the decisions at issue here—shortening open enrollment and reducing outreach—may result in as much as a 9 percent increase in premiums.155
155 Covered California, Individual Markets Nationally Face High Premium Increases in Coming Years Absent Federal or State Action, With Wide Variation Among States 3 (Mar. 8, 2018), http://hbex.coveredca.com/data-research/library/CoveredCA_High_Premium_Increases_3-818.pdf [hereinafter March 2018 Covered California Study].
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1. Shortening Open Enrollment 140. As described above, the ACA requires HHS to establish “annual open enrollment periods” during which individuals, via the exchanges, can enroll in new or different health insurance coverage for the coming year. 42 U.S.C. § 18031(c)(6)(B). Outside of open enrollment, individuals may enroll in coverage through an exchange only if they qualify for a special enrollment period, see id. § 18031(c)(6)(C), based on certain life events like getting married, having a baby, or losing other health coverage. The opportunity to buy insurance through the exchange is generally limited to established open enrollment periods in order to minimize adverse selection. If consumers could buy health insurance through an exchange at any time throughout the year, they could wait until they got sick to purchase insurance and drop it once they recover. 141. The 2016 open enrollment period ran from November 1, 2015 through January 31, 2016.156 Likewise, the 2017 open enrollment period ran from November 1, 2016 through January 31, 2017.157 142. In April 2017, however, the Trump Administration announced that it was cutting Open Enrollment for 2018 in half from prior years, setting it to run from November 1, 2017
156 2016 Marketplace Open Enrollment Period Public Use Files, CMS, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/Marketplace-Products/2016_Open_Enrollment.html. 157 CMS, Health Insurance Marketplaces 2017 Open Enrollment Period Final Enrollment Report: November 1, 2016 - January 31, 2017 (Mar. 15, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheetitems/2017-03-15.html.
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through December 15, 2017.158 Shortly thereafter, President Trump tweeted that “ObamaCare is in serious trouble” and that “it dies far sooner than anyone would have thought.”159
143. In addition, HHS told community groups that the federal health insurance
exchange, HealthCare.gov, would be subject to “[p]lanned” “[d]owntime” during the upcoming
open enrollment period for an “[o]vernight outage on Wednesday, November 1, 2017”; and on “Sundays [from] 12am-12pm ET, except on December 10, 2017”160—a significant increase in
downtime from prior years. While the actual downtime proved less than what had been
announced, that fact was not communicated, which may have been discouraged enrollment
during the times slated for outages.
144. HHS has claimed that reducing the open enrollment period will reduce adverse
selection. 82 Fed. Reg. at 18,353-54. However, HHS has not cited any evidence to show that
prior open enrollment periods enabled adverse selection, or that shortening the period will reduce
it. Indeed, experts have found weekly enrollment data inconclusive as to “whether longer
enrollment windows increase risk for health insurers through adverse selection or decrease risk by providing greater opportunities for enrollment by so-called ‘healthy procrastinators.’”161 Still,
these experts concluded that “reducing the length of the open enrollment period in 2018 may
158 CMS, Patient Protection and Affordable Care Act; Market Stabilization, 82 Fed. Reg. 18,346, 18,353-54 (Apr. 18, 2017); see 45 C.F.R. § 155.410(e). 159 @realDonaldTrump, Twitter (Apr. 23, 2017, 7:20 AM), https://twitter.com/realDonaldTrump/status/856150719656755200. 160 @philgalewitz, Twitter (Sept. 22, 2017, 12:06 PM), https://twitter.com/philgalewitz/status/911305725154140163/photo/1?ref_src=twsrc%5Etfw&; see Phil Galewitz, Sunday Hours: Obamacare Website To Be Shut Down For Portion of Most Weekends, Kaiser Health News (Sept. 22, 2017), https://khn.org/news/hhs-to-close-insuranceexchange-for-12-hours-on-sundays-during-enrollment/. 161 Paul Shafer & Stacie Dusetzina, Looking Ahead To 2018: Will A Shorter Open Enrollment Period Reduce Adverse Selection In Exchange Plans?, Health Affairs Blog, Apr. 14, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170414.059663/full/.
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cause as much or more harm for consumers (e.g., reduced plan switching among re-enrollees,
lower enrollment among those eligible but previously uninsured) than any potential reduction in
adverse selection for insurers.” Id. And there is broad consensus that later enrollees are,
generally speaking, younger and healthier than earlier enrollees.162
145. There can be no doubt that the Administration’s decision to shorten the 2018
enrollment period for FFEs made it more difficult for people to obtain health insurance. Unlike
the federal government, nine state-based exchanges opted to maintain a longer 2018 open
enrollment period than the Administration set for HealthCare.gov. Providing extra time for
people to sign up for coverage is but one example of actions SBEs have taken that have resulted
in increased enrollment and lower premiums there as compared to in FFEs.163
146. By cutting open enrollment in half, Defendants have violated their constitutional
obligation to take care that the ACA is faithfully executed. Rather, they have purposefully
undermined the Act—the aim of which is to expand access to quality coverage—in at least two
162 See id.; Express Scripts, Exchange Pulse: Public Health Exchange and Off-Exchange Report 2 (Oct. 2014), http://lab.express-scripts.com/lab/insights/governmentprograms/~/media/68c6ed3d98db484bbb9ac557acafa9de.ashx (finding that those who enroll later during open enrollment periods are, “on average, 4 years younger than early enrollees,” and that they “also have a lower prevalence of chronic conditions, such as heart disease, depression, high cholesterol and diabetes, and a lower prevalence of specialty conditions, such as cancer and multiple sclerosis”); see also Virgil Dickson, Market Stabilization Rule Could Collapse the ACA Exchanges, Modern Healthcare, Apr. 14, 2017, http://www.modernhealthcare.com/article/20170414/NEWS/170419910 (surveying experts and concluding that shortening open enrollment will disproportionately affect low-income individuals and limit participation in exchange plans). 163 Mark A. Hall & Michael J. McCue, Health Insurance Markets Perform Better in States That Run Their Own Marketplaces, To the Point, Mar. 7, 2018, https://www.commonwealthfund.org/blog/2018/health-insurance-markets-perform-better-statesrun-their-own-marketplaces; see Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 4, 9, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-andStrenghtening-the-Individual-Health-Insurance-Market2.pdf.
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ways. First, cutting open enrollment will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, by decreasing health insurance enrollments, and in particular by decreasing enrollments among younger and healthier populations, cutting open enrollment will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
2. Cutting Funding for Advertising and Refusing to Publicize Open Enrollment
147. In keeping with the exchanges’ duty to facilitate enrollment, HHS regulations specify that they “must conduct outreach and education activities . . . to educate consumers about the Exchange and insurance affordability programs to encourage participation.” 45 C.F.R. § 155.205(e).
148. In order to comply with this obligation for federally-facilitated exchanges, HHS has, in the past, funded advertising campaigns. In 2016, for example, HHS spent $100 million on advertising to educate consumers about, and promote their enrollment in, health insurance.164
149. So far, President Trump and his Administration have drastically reduced funding for such advertising—twice.
150. First, on January 26, 2017—in the waning days of that year’s open enrollment period—the Administration overruled the objections of career staff and “pull[ed] the plug on all Obamacare outreach and advertising in the crucial final days of the 2017 enrollment season,”
164 Timothy Jost, CMS Cuts ACA Advertising by 90 Percent Amid Other Cuts to Enrollment Outreach, Health Affairs Blog, Aug. 31, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170901.061790/full/.
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cutting funding by $5 million.165 Individuals could still sign up through the January 31, 2017
deadline, but the Administration decided not to “advertis[e] that fact any longer.”166
Subsequently, the Office of the Inspector General at HHS determined that the Administration’s
actions resulted in $1.1 million in unrecoupable costs.167 More importantly, the advertising cuts
resulted in fewer enrollments—to the tune of 350,000.168 Fewer enrollments mean higher
premiums. Indeed, the same day his Administration cut ACA advertising by $5 million,
President Trump again promised an ACA “explosion” and that “[n]obody’s going to be able to
afford” healthcare under the law.169
151. Second, on August 31, 2017, CMS announced that for the open enrollment period
that was slated to commence on November 1, 2017, it planned to spend only $10 million on
advertising, a 90 percent cut from the prior year.170 CMS further specified that it would “target
165 Paul Demko, Trump White House Abruptly Halts Obamacare Ads, Politico, Jan. 26, 2017, http://www.politico.com/story/2017/01/trump-white-house-obamacare-ads-234245. 166 Id. 167 HHS, Office of the Inspector General, Review of The Department of Health and Human Services Cancellation of Marketplace Enrollment Outreach Efforts, OEI-12-17-00290 at 5, https://oig.hhs.gov/oei/reports/oei-12-17-00290.pdf. 168 See Joshua Peck, Trump Blocked Nearly 500,000 People From Getting Coverage, Medium, Feb. 2, 2017, https://medium.com/get-america-covered/trumped-blocked-nearly-500-000-peoplefrom-getting-coverage-70317eedaaa4; Charles Gaba, UPDATED: Want Evidence Trump Killing HC.gov Ads Hurt Enrollment? Check This Out., Feb. 3, 2017, http://acasignups.net/17/03/16/updated-want-evidence-trump-killing-hcgov-ads-hurt-enrollmentcheck-out. 169 Transcripts: Trump Addresses GOP Leadership at Retreat in Philadelphia, CNN (Jan. 26, 2017), http://transcripts.cnn.com/TRANSCRIPTS/1701/26/wolf.02.html. 170 CMS, Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period 1 (Aug. 31, 2017), https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/Downloads/Policies-Related-Navigator-ProgramEnrollment-Education-8-31-2017.pdf [hereinafter “HHS Aug. 31, 2017 Announcement”]; see Timothy Jost, CMS Cuts ACA Advertising by 90 Percent Amid Other Cuts to Enrollment Outreach, Health Affairs Blog, Aug. 31, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170901.061790/full/.
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its advertising and outreach activities . . . through digital media, email, and text messages,” at the expense of television advertising.171 Shortly after they were announced, Joshua Peck, who previously had led such outreach efforts, estimated that CMS’s cuts to advertising would result in at least 1.1 million fewer enrollments.172
152. In justifying its drastic cuts to advertising, Administration officials “pointed to the fact that for 2017, even as spending on ads rose, enrollment ended up lower.”173 But as press reports pointed out, and as described above, “The Trump [A]dministration . . . withdrew about $5 million of ads at the end of the 2017 sign-up period, which likely contributed to the enrollment decline.”174
153. The Administration has slashed advertising funding and emphasized digital over television-based marketing notwithstanding that—or because—evidence known to HHS demonstrates that robust advertising, and television advertising in particular, is critical to fulfilling the ACA’s goal of increasing enrollments in health insurance coverage.175 Indeed, starting in 2015, CMS undertook randomized control trials and econometric modeling to measure the effectiveness of paid promotional activities and by 2017 concluded that paid
171 HHS Aug. 31 2017 Announcement, supra n.170, at 1. 172 Joshua Peck, Trump’s Ad Cuts Will Cost a Minimum of 1.1 Million Obamacare Enrollments, Medium, Oct. 23, 2017, https://medium.com/get-america-covered/trumps-ad-cuts-will-cost-aminimum-of-1-1-million-obamacare-enrollments-9334f35c1626. 173 Zachary Tracer & Anna Edney, Trump Guts Budget for Obamacare Ads, Bloomberg, Aug. 31, 2017, https://www.bloomberg.com/news/articles/2017-08-31/trump-health-department-issaid-to-slash-obamacare-ad-budget. 174 Id. 175 See id.
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outreach was responsible for 40 percent of all enrollments.176 The agency further found that
television ads were “the number one driver of enrollment.”177
154. That finding aligns with a study of the effectiveness of advertising in promoting
enrollment on Kentucky’s Exchange, which found that cuts in advertising during the 2016 open
enrollment period led to “450,000 fewer page views . . . and 20,000 fewer unique visitors per
week” to Kentucky’s state-based marketplace.178
155. Studies also found that the increased volume of television advertisement during
the 2014 open enrollment period contributed to increased enrollment and a substantial reduction
in the uninsured rate.179 States and exchanges that have engaged in their own marketing efforts
similarly report higher enrollment and more stable insurance markets: Covered California reports
that its marketing investment has yielded a healthier risk pool, premiums that are 6 to 8 percent
lower, and greater insurer participation.180
176 Lori Lodes, I Ran ACA Outreach Under Obama. Trump’s Funding Cuts Could Ruin the Health Care Law, Vox, Sept. 15, 2017, https://www.vox.com/the-bigidea/2017/9/12/16294784/aca-outreach-advertising-sabotage-funding. 177 Id. 178 Paul Shafer et al., Advertising Cutbacks Reduce Marketplace Information-seeking Behavior: Lessons From Kentucky for 2018, Incidental Economist, Sept. 2, 2017, http://theincidentaleconomist.com/wordpress/advertising-cutbacks-reduce-marketplaceinformation-seeking-behavior-lessons-from-kentucky-for-2018/. 179 Pinar Karaca-Mandic et al., The Volume of TV Advertisements During the ACA’s First Enrollment Period Was Associated with Increased Insurance Coverage, Health Affairs (Apr. 2017), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2016.1440?journalCode=hlthaff; Sarah E. Gollust et al., TV Advertising Volumes Were Associated With Insurance Marketplace Shopping And Enrollment In 2014, Health Affairs (June 2018), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1507. 180 Peter V. Lee et al., Marketing Matters: Lessons from California to Promote Stability and Lower Costs in National and State Individual Insurance Markets, Covered California (Sept. 2017), http://hbex.coveredca.com/data-research/library/CoveredCA_Marketing_Matters_917.pdf.
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156. President Trump and his Administration have not only dramatically reduced overall funding for advertising under the Affordable Care Act, but also have gone so far as to produce ads that impugn the law and its reforms. In June 2017, HHS produced and posted 23 video testimonials “from people who said they had been ‘burdened by Obamacare,’ including families, health care professionals and small business owners.”181 “While it’s not certain where the money for the videos came from, several former health officials who worked in the Obama Administration said that they suspect it came from the budget meant to promote the Affordable Care Act.”182 And when an individual featured in one of the videos “sat down for a recording at the HHS studio he said it ‘felt like they were pushing for a harder line against Obamacare’ than he was delivering.”183
157. Finally, when open enrollment for plan year 2018 began on November 1, 2017, neither HHS nor CMS even issued a press release, and the Twitter feeds of the agencies and of their leadership were silent, in stark contrast to the prior year’s intense push. Such silence is part of a pattern: as described above, through multiple changes to its own websites, HHS has endeavored to reduce access to information about the ACA.184 And Administration officials have indicated that they do not want to promote ACA-compliant plans.
181 Audrey Carlsen & Haeyoun Park, The Same Agency That Runs Obamacare Is Using Taxpayer Money to Undermine It, New York Times, Sept. 4, 2017, https://www.nytimes.com/interactive/2017/09/04/us/hhs-anti-obamacare-campaign.html?_r=0. 182 Id. 183 Sam Stein, Team Trump Used Obamacare Money to Run PR Effort Against It, Daily Beast, July 20, 2017, https://www.thedailybeast.com/team-trump-used-obamacare-money-to-run-adsagainst-it. 184 See Charles S. Clark, Report: How HHS Buried Information About the Affordable Care Act, Government Executive (May 17, 2018), https://m.govexec.com/oversight/2018/05/report-howhhs-buried-information-about-affordable-care-act/148283/.
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158. These actions do not simply represent a choice to spend resources in other ways; the Administration’s own statements show that they were acting to frustrate the goals of the ACA. Underscoring this is the fact that in the very year that the Administration shortened open enrollment, it decreased outreach. By slashing spending on ACA advertising, producing ads designed to criticize the law, and refusing to publicize open enrollment, Defendants have violated their constitutional obligation to take care that the law is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least three ways. First, the Administration’s advertising choices contradict the requirements of the Act and of its implementing regulations concerning education and outreach. 42 U.S.C. § 18031(b)(1)(a); 45 C.F.R. § 155.205(e). Second, the Administration’s advertising choices are resulting in fewer individuals receiving health insurance coverage, directly undermining the Act’s goal.185 And third, by decreasing health insurance enrollments— particularly among healthier people—the Administration’s advertising choices have weakened health insurance markets, which ultimately will lead to even fewer individuals being able to access affordable health care coverage.
3. Cutting Funding for Navigators and Encouraging Them to Undermine the Act
159. Twice—in 2017 and 2018—the Trump Administration has drastically cut funding for Navigators working in federally-facilitated exchanges. With its latest round of funding cuts, the Administration has gone even further, commandeering Navigators in its sabotage agenda by requiring them to compete for funding according to how enthusiastically they plan to advertise
185 Ashley Semanskee et al., Individual Insurance Market Performance in Early 2018, Kaiser Family Foundation (June 26, 2018), https://www.kff.org/private-insurance/issuebrief/individual-insurance-market-performance-in-early-2018/ (finding that these “recent policy changes,” among others, “have the potential to destabilize the individual market generally”).
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the availability of non-ACA compliant coverage—i.e., according to their willingness to assist the Administration in siphoning consumers away from the exchanges and convincing them to purchase inferior coverage. These decisions exemplify the Administration’s failure to take care to faithfully execute the ACA.
160. As explained above, the ACA requires exchanges to award grants to Navigators, 42 U.S.C. § 18031(i), who must maintain a current understanding of available health insurance options, conduct public education and awareness campaigns, help consumers understand their choices, facilitate consumers’ health insurance decisions, and ensure their access to consumer protections, see id. § 18031(i)(3); 45 C.F.R. §§ 155.210, 155.215. To ensure that exchanges run by the federal government comply with the requirement that all exchanges establish Navigator programs, see, e.g., 42 U.S.C. §§ 18031(d)(4)(K), 18031(i)(1); 45 C.F.R. §§ 155.205(d)(1), 155.210(a), HHS enters into cooperative agreements with Navigators.186
161. In the ACA, Congress recognized the importance of expert assistance, both to individuals and for the functioning of the exchanges. Navigators play vitally important roles at every step, from helping consumers make informed health insurance decisions to facilitating their applications and enrollment, thereby contributing to the success of the exchanges—and of the Act itself—overall. For example, one study concluded that “[t]he strongest overall predictor of completing the [insurance] application process was receiving assistance from a [N]avigator or
186 See, e.g., HHS, Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Marketplaces, Funding Opportunity No. CA-NAV-15-001 (Apr. 15, 2015) https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarketplaces/Downloads/Navigator_2015_FOA_FINAL_04_15_2015.pdf [hereinafter 2015 FOA]; see generally In-Person Assistance in the Health Insurance Marketplaces, CMS, https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarketplaces/assistance.html (describing the “FFE Navigator program”).
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social worker.”187 Additional research has documented that Hispanic and low-income individuals
disproportionately rely on direct assistance from Navigators and other entities when making
health insurance coverage decisions.188 Other experts have established the importance of the
broad range of Navigators’ duties for consumers and for exchanges.189
162. When issuing the 2015 Funding Opportunity Announcement, HHS estimated that
it “expect[ed] to award up to $201,000,000 over the three-year project period and up to
$67,000,000 during the first 12-month budget period.” 2015 FOA, supra n.186, at 11. Indeed, in
2015, HHS reported awarding $67 million in grants under the FFE Navigator program.190 And in
2016, HHS reported issuing continuation awards totaling “over $62.5 million” under the
program.191
187 Benjamin D. Sommers et al., The Impact of State Policies on ACA Applications and Enrollment Among Low-Income Adults in Arkansas, Kentucky, and Texas, 34 Health Affairs 1010 (July 2018), https://dash.harvard.edu/handle/1/25156070. 188 See Fredric Blavin et al., Obtaining Information on Marketplace Health Plans: Websites Dominate but Key Groups Also Use Other Sources, Urban Institute Health Policy Center (June 9, 2014), http://hrms.urban.org/briefs/obtaining-information-on-marketplace.html. 189 See Tricia Brooks & Jessica Kendall, Designing Navigator Programs to Meet the Needs of Consumers: Duties and Competencies, Georgetown University Health Policy Institute (Sept. 2012), http://files.www.cmhnetwork.org/news/navigator-grants/Navigator-Programs-Duties-andCompetencies.pdf. 190 Press Release, CMS, CMS Awards $67 Million in Affordable Care Act Funding to Help Consumers Sign-up for Affordable Health Insurance Marketplace Coverage in 2016 (Sept. 2, 2015), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Pressreleases-items/2015-09-02.html. 191 Randy Pate, Director, Center for Consumer Information and Insurance Oversight (“CCIO”), Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period (Aug. 31, 2017), https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/Downloads/Policies-Related-Navigator-ProgramEnrollment-Education-8-31-2017.pdf.
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163. Until late summer 2017, final preparations were underway to fund the HHS Navigator program at a similar level for the 2018 open enrollment—$60 million.192
164. Final preparations were also underway until late summer 2017 to allocate funding
for the 2018 open enrollment according to the process and criteria described in the 2015 FOA. In
a memo signed on August 23, 2017, agency staff explained that individual grantees’ continuation
award amounts for 2017 had been calculated “based on performance evaluations conducted by
[CMS project officers] and [CMS regional office liaisons],” which were based on the
“performance factors outlined in the 2015 FOA” and grantees’ “progress toward the goals outlined in their 2016 Non-Competing Continuation Application.”193
165. But at the direction of political appointees at the agency, HHS abruptly changed
course. In an August 31, 2017 announcement, HHS announced an entirely “new funding
formula”—nowhere to be found in the operative 2015 FOA, nor in the relevant statutes or
regulations—whereby “Navigator grantees will receive funding based” solely “on their ability to meet their enrollment goals during the previous year.” HHS Aug. 31, 2017 Announcement, supra
n.170, at 1. “For example, a grantee that achieved 100 percent of its enrollment goal for plan
year 2017 will receive the same level of funding as last year, while a grantee that enrolled only
192 See Memorandum from Randy Pate, Director, CCIIO, to Janet Loftus, Director, Division of Accounting Operations, CMS, regarding Patient Protection and Affordable Care Act— Cooperative Agreement Funds (dated Aug. 24, 2017; stamped Aug. 31, 2017), http://acasignups.net/17/09/04/exclusive-i-believe-whats-called-scoop (confirming that $60 million was appropriated on August 31, 2017); Memorandum from Gian Johnson, Acting Director, Division of Assister Programs, Consumer Support Group, CCIIO, to Jennifer Beeson, Director, Consumer Support Group, CCIIO, regarding Funding and Decision Memo- Request for Approval to Award Year 3 Funding for Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Exchanges 2 (signed Aug. 23, 2017), http://acasignups.net/17/09/04/exclusive-i-believe-whats-called-scoop [hereinafter Aug. 23, 2017 Memo] (“The Navigator program received $60 million for grant awards in FY 2017….”). 193 Aug. 23, 2017 Memo, supra n.192, at 2.
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70 percent of its enrollment goal would receive 70 percent of its previous year funding level, a
reduction of 30 percent.” Id.
166. Although HHS announced its new funding formula one day before the then-
current budget period expired, on September 1, 2017, the agency waited almost two weeks, until
September 13, 2017, to issue notices of awards to grantees under its new funding formula.
Accordingly, because “[e]ntities and individuals cannot serve as federally certified Navigators
without receiving federal grant funding to perform Navigator duties,” 2015 FOA, supra n.186, at
7, by delaying issuance of notices of award until September 13, 2017, HHS eliminated Navigator
programs in FFEs from September 2-12, 2017, further violating the ACA’s requirements.
167. HHS’s 2017 funding formula resulted in a nearly 40 percent decrease in overall funding for the FFE Navigator program, to about $36 million.194 Some individual Navigators saw cuts as high as 92 percent.195
168. But HHS’s 2017 cuts to Navigator funding pale in comparison to those the agency
announced in 2018. On July 10, 2018, HHS released a new funding opportunity announcement for the FFE Navigator program and stated that it “expects to award up to $10 million”196—
194 See Robert King, Trump Cuts Obamacare Ad Budget By 90 Percent, Washington Examiner, Aug. 31, 2017, http://www.washingtonexaminer.com/trump-cuts-obamacare-ad-budget-by-90percent/article/2633128; Press Release, CMS, CMS Announces New Funding Opportunity Announcement for the Federally-Facilitated Exchange Navigator Program (July 10, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releasesitems/2018-07-10-2.html. 195 See Juliet Eilperin & Amy Goldstein, HHS Slashes Funding to Groups Helping ACA Consumers Enroll by up to 92 Percent, Washington Post, Sept. 14, 2017, https://www.washingtonpost.com/national/health-science/hhs-slashes-funding-to-some-acanavigator-groups-by-more-than-60-percent/2017/09/14/729c394c-9957-11e7-b5693360011663b4_story.html?utm_term=.f7910e0bc711. 196 CMS, Press Release, CMS Announces New Funding Opportunity Announcement for the Federally-Facilitated Exchange Navigator Program (July 10, 2018),
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merely one-fourth the amount of funding provided for the prior year, and one-sixth the amount of funding provided for the year before that. Notwithstanding Navigators’ important place in the ACA’s statutory scheme and their vital role in facilitating enrollment, HHS has unlawfully arrogated to itself the authority to decide that their services are no longer important.197
169. Yet drastically reducing Navigator funding in FFEs was not enough. HHS also instructed applicants to compete for the limited funding available by “demonstrat[ing] how they provide information to people who may be unaware of the range of available coverage options in addition to qualified health plans . . . such as association health plans, short-term, limitedduration insurance, and health reimbursement arrangements.”198 This means that Navigators will now use funds that Congress designated to support the ACA for the opposite purpose—to undermine it. The Act is clear: Navigators must “conduct public education activities to raise awareness of the availability of qualified health plans,” “distribute fair and impartial information concerning enrollment in qualified health plans,” and “facilitate enrollment in qualified health plans.” 42 U.S.C. § 18031(i)(3) (emphasis added). HHS’s decision to incentivize Navigators to push plans designed to siphon consumers away from ACA exchanges, thus weakening them does not faithfully implement the ACA but rather undermines it.
170. By slashing funding for Navigators and encouraging them to advertise non-ACA compliant plans, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, reducing funding for
https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releasesitems/2018-07-10-2.html. 197 See id. 198 Id.
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Navigators will result in fewer individuals receiving ACA-compliant health insurance coverage
overall, directly undermining the Act’s goal. And second, by decreasing health insurance
enrollments, reducing funding for Navigators will weaken health insurance markets and increase
premiums, ultimately resulting in even fewer individuals being able to access affordable health
care coverage.
4. Refusing to Participate in Enrollment Events and Other Outreach 171. To effectuate the ACA’s education and outreach mandates, see, e.g., 42 U.S.C.
§ 18031(b)(1)(a); see also 45 C.F.R. § 155.205(e), in prior years HHS officials participated in
enrollment events around the country.199 That changed dramatically in 2017. During that
summer, the Trump Administration ended contracts that provided outreach, and that brought
enrollment assistance to libraries, businesses, and urban neighborhoods, in 18 cities.200 The
Administration stopped coordinating enrollment efforts with the Latino Affordable Care Act
Coalition, a group of local and national organizations that assisted with every previous open
enrollment period,201 and a number of other organizations as well.202 The Administration stopped
sending staff to regional enrollment events.203 After being informed that HHS would no longer
199 Kate Nocera & Paul McLeod, The Trump Administration Is Pulling Out Of Obamacare Enrollment Events, Buzzfeed, Sept. 27, 2017, https://www.buzzfeed.com/katenocera/the-trumpadministration-wont-support-state-obamacare. 200 Carla K. Johnson, Trump Administration Ends Affordable Care Act Assistance Contracts in 18 Cities, PBS NewsHour, July 20, 2017, https://www.pbs.org/newshour/health/trumpadministration-ends-affordable-care-act-assistance-contracts-18-cities. 201 Alice Ollstein, Trump Admin Abandons Latino Outreach For Obamacare Sign-Ups, Talking Points Memo, Aug. 10, 2017, https://talkingpointsmemo.com/dc/trump-hhs-abandons-latinooutreach-on-obamacare. 202 Allice Ollstein, Trump HHS Severs Key Partnerships For Obamacare Outreach, Talking Points Memo, Aug. 14, 2017, https://talkingpointsmemo.com/dc/trump-hhs-obamacarepartnerships-promotion-sabotage. 203 Dylan Scott, Trump Administration Abruptly Drops out of Obamacare Events in Mississippi, Vox, Sept. 27, 2017, https://www.vox.com/policy-and-politics/2017/9/27/16374158/obamacare-
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participate in such events, at least one group that had previously sponsored such events, and that
had planned to hold such events, decided to cancel them.204 Once again, the Administration’s
actions fit a pattern of reducing support for enrollment initiatives.”205
172. By cutting back on enrollment events and other outreach, Defendants have
violated their constitutional obligation to take care that the ACA is faithfully executed. Rather,
they have purposefully undermined the Act—the aim of which is to expand access to quality
coverage—in at least two ways. First, cutting back on enrollment events and outreach will result
in fewer individuals receiving ACA-compliant health insurance coverage overall, directly
undermining the Act’s goal. And second, by decreasing health insurance enrollments, cutting
back on enrollment events and outreach will weaken health insurance markets and increase
premiums, ultimately resulting in even fewer individuals being able to access affordable health
care coverage.
Refusing to Defend the Act
173. Finally, Defendants have abdicated their constitutional duty to defend the ACA in
court. “[T]he question of the executive’s obligation to enforce and defend implicates Article II’s
mississippi-hhs-events; see Kate Nocera & Paul McLeod, The Trump Administration Is Pulling Out Of Obamacare Enrollment Events, Buzzfeed, Sept. 27, 2017, https://www.buzzfeed.com/katenocera/the-trump-administration-wont-support-state-obamacare (further reporting about an HHS official’s email to an event sponsor stating that he would not be permitted to participate). 204 See id. 205 Id.; see, e.g., Carla K. Johnson, Trump Administration Ends Affordable Care Act Assistance Contracts in 18 Cities, PBS NewsHour, July 20, 2017, https://www.pbs.org/newshour/health/trump-administration-ends-affordable-care-act-assistancecontracts-18-cities; Leslie Small, Wide Array of Groups Say HHS Has Stopped Working with Them on ACA Outreach, Fierce Healthcare, Aug. 15, 2017, http://www.fiercehealthcare.com/aca/wide-array-groups-say-hhs-has-stopped-working-them-acaoutreach; Amanda Michelle Gomez, Obamacare State Officials Are Being Left in the Dark This Open Enrollment Period, ThinkProgress, Aug. 24, 2017, https://thinkprogress.org/trump-adminobamacare-enrollment-state-marketplace-d8064210e501/.
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requirement that the president ‘take Care that the Laws be faithfully executed.’” Daniel J.
Meltzer, Executive Defense of Congressional Acts, 61 Duke L.J. 1183, 1192 (2012). Indeed,
a range of considerations, including the distinctive capacities of the executive branch, the nature of relations between career lawyers and political appointees in the government, the virtues of institutional continuity within the executive branch, and the relationship between the executive branch and Congress, reinforce the wisdom of the conventional practice of providing a defense even of statutes that the incumbent administration views as offensive and possibly invalid.
Id. at 1186-87.
174. On June 7, 2018, Attorney General Jeff Sessions notified Congress that the
Department of Justice would “not defend the constitutionality” of the ACA’s individual mandate
provision, and would “argue that certain provisions of the [ACA] are inseverable from that
provision,” namely the guaranteed-issue and community-rating provisions, in a pending case in federal district court in Texas.206 He did so despite acknowledging that “the Executive Branch
has a longstanding tradition of defending the constitutionality of duly enacted statutes if reasonable arguments can be made in their defense.”207 The Attorney General’s decision
constituted “a dramatic break from the executive branch’s tradition of arguing to uphold existing statutes and a land mine for health insurance changes the ACA brought about.”208
175. The Attorney General’s decision deprives the courts of the federal government’s
considerable expertise and experience regarding the ACA, and inhibits the proper functioning of
our adversary system, which is essential to ensuring that courts receive a robust presentation of
206 Letter from Jefferson B. Sessions, U.S. Attorney General, to Speaker, House of Representatives, Paul Ryan 1 (June 7, 2018), https://www.justice.gov/file/1069806/download. 207 Id. at 2. 208 Amy Goldstein, Trump Administration Won’t Defend ACA in Case Brought by GOP States, Washington Post, June 7, 2018, https://www.washingtonpost.com/national/health-science/trumpadministration-wont-defend-aca-in-cases-brought-by-gop-states/2018/06/07/92f56e86-6a9c11e8-9e38-24e693b38637_story.html.
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competing views. More troublingly, it is a dramatic example of how Defendants are eager to invalidate, rather than to implement, core ACA provisions. Because of Defendants’ decision, consumers and other stakeholders cannot fully rely on the ACA’s guaranteed-issue and community-rating provisions, which are essential to ensuring that individuals with preexisting conditions can obtain necessary insurance coverage.
DEFENDANTS’ UNLAWFUL ACTIONS ARE HARMING PLAINTIFFS 176. Although the ACA has proven more resilient than Defendants might have hoped, Defendants’ actions are taking a toll. Through all the mechanisms described above, Defendants’ actions are aimed at weakening insurance markets; they are making it harder and more expensive for consumers and small businesses to procure health insurance coverage; and they are driving up the size of the uninsured and underinsured populations. Local governments and individuals nationwide, including Plaintiffs in this case, are paying the price. I. Defendants’ Unlawful Actions Are Causing Premiums to Rise and the Rate of the Uninsured to Increase 177. The myriad ways in which Defendants’ actions cause premiums to rise, enrollment in ACA exchanges to drop, and the rate of the uninsured to increase, are described above, action by action. As detailed below, the overall consequences are being felt now and, without intervention, will worsen. 178. The executive actions at issue here are making it harder for Americans to afford and purchase quality health insurance, in part by increasing premiums for plans on the ACA exchanges. According to one analysis, “absent” various “policy changes,” including the actions challenged here, “it is likely that insurers would generally have required only modest premium
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increases” from 2017 to 2018, and from 2018 to 2019 “as well.”209 But as a result of Defendants’ actions and other factors, premiums are increasing substantially. The Congressional Budget Office has estimated that the average premium for a benchmark ACA plan for 2018 is about 37 percent higher than it was in 2017.210 One analysis concluded that “a substantial portion” of such rate increases was “due to political and regulatory factors that arose in 2017”—including the Trump Administration decisions at issue here.211 Insurers have agreed: the press reported that in May 2017, “[h]ealth insurers across the country [were] making plans to dramatically raise Obamacare premiums or exit marketplaces amid growing exasperation with the Trump [A]dministration’s erratic management of the program and its conflicting signals about the fate of aid for low-income consumers and other key issues.”212
179. Looking ahead, according to an assessment by Covered California, in 2019, statewide average premium increases for ACA plans could range from 12 to 32 percent, with additional increases of 10 to 21 percent expected in both 2020 and 2021.213 “Cumulatively, these premium increases would average 50 percent over the three-year period, with a projected range
209 Cynthia Cox et al., Individual Insurance Market Performance in 2017, Kaiser Family Foundation (May 17, 2018), https://www.kff.org/private-insurance/issue-brief/individualinsurance-market-performance-in-2017/. 210 May 2018 CBO Report, supra n.9, at 2. 211 Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 4, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-and-Strenghtening-theIndividual-Health-Insurance-Market2.pdf; see also May 2018 CBO Report, supra n.9, at 2. 212 See, e.g., Noam N. Levey, Health Insurers Plan Big Obamacare Rate Hikes—and They Blame Trump, Los Angeles Times, May 22, 2017, http://www.latimes.com/politics/la-na-polobamacare-trump-mismanagement-20170518-story.html. 213 March 2018 Covered California Study, supra n.155, at 2.
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of 36 percent to 94 percent.”214 Once again, the actions by Defendants challenged here are in part
to blame. The Urban Institute has calculated that some of Defendants’ actions will contribute to
an increase of over 18 percent in premiums for ACA-compliant plans in most states.215 The
Kaiser Family Foundation, in reviewing proposed premiums for 2019, also found evidence that
they are substantially higher than they would otherwise have been because of Defendants’
actions.216 Indeed, a review of proposed premiums found insurers citing “[t]he increase in the
overall sickness of the risk pool,” which they attribute “to ACA-related policy changes that lead
to the loss of young and healthy enrollees,” as driving recent increases.217 These increases reflect
the concern in insurance markets that the executive actions under review here have caused. Such
concern has also resulted in insurers exiting ACA exchanges entirely.218 For example, in
discussing whether to stay in ACA exchanges, the CEO of CareFirst Blue Cross Blue Shield, the
214 Id. The Congressional Budget Office has estimated that the average premium for a benchmark ACA plan for 2019 will increase by 15 percent, and will further increase by an average of about 7 percent per year between 2019 and 2028. May 2018 CBO Report, supra n.9, at 2-3. 215 March 2018 Urban Institute Study, supra n.116, at 2. 216 Rabah Kamal et al., Tracking 2019 Premium Changes on ACA Exchanges, Kaiser Family Foundation (updated July 24, 2018), https://www.kff.org/private-insurance/issue-brief/tracking2019-premium-changes-on-aca-exchanges/ [hereinafter KFF Tracking 2019 Premium Changes]; see also National Analysis Projects 2019 Premium Hikes of 30 Percent in Some States and Cumulative Increases of 90 Percent or More in the Next Three Years, Covered California (Mar. 8, 2018), https://coveredcanews.blogspot.com/2018/03/national-analysis-projects-2019premium.html [hereinafter March 2018 Covered California Post] (finding that as a result of “ongoing federal uncertainty, premium increases for every state could range from 12 to 32 percent in 2019”). 217 Sabrina Corlette, The Effects of Federal Policy: What Early Premium Rate Filings Can Tell Us About the Future of the Affordable Care Act, CHIRblog, May 21, 2018, http://chirblog.org/what-early-rate-filings-tell-us-about-future-of-aca/. 218 See Sabrina Corlette et al., Insurers Remaining in Affordable Care Act Markets Prepare for Continued Uncertainty in 2018, 2019, Urban Institute (Mar. 2018), https://www.rwjf.org/content/dam/farm/reports/issue_briefs/2018/rwjf444308.
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largest insurer in the mid-Atlantic (covering Maryland, Washington, D.C., and parts of Virginia),
said that “[c]ontinuing actions on the part of the [A]dministration to systematically undermine
the market . . . make it almost impossible to carry out the mission.”219
180. Increased premiums lead to an increase in the rate of the uninsured and
underinsured.220 So just as the rate of the uninsured fell as a result of the Affordable Care Act’s
faithful implementation in its initial years, that rate appears to be on the rise again, thanks in part
to Defendants’ actions. The Congressional Budget Office has estimated that the number of
uninsured Americans under age 65 has risen by 2 million between 2016 and 2018.221 The overall
decline in enrollment in ACA-compliant plans from its 2016 peak, particularly among those not
eligible for subsidies, is contributing to this trend.222
219 Paige Winfield Cunningham, The Health 202: Leading Obamacare Insurer Says Things Are ‘Materially Worse’ Under Trump Administration, Washington Post, May 1, 2018 https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/05/01/the-health202-leading-obamacare-insurer-says-things-are-materially-worse-under-trumpadministration/5ae76f2230fb04371192693b/?utm_term=.d54f46a7a0a1. 220 It has long been understood that among the most important reasons why the uninsured lack coverage is the unaffordability of coverage. See, e.g., supra ¶ 38 (citing CMS’s statement); KFF Key Facts, supra n.18 (“Even under the ACA, many uninsured people cite the high cost of insurance as the main reason they lack coverage. In 2016, 45% of uninsured adults said that they remained uninsured because the cost of coverage was too high.”); M. Susan Marquis et al., Consumer Decision Making In The Individual Health Insurance Market, Health Affairs (May/June 2006), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.25.w226 (“Affordability of insurance is believed to be the most important reason that the uninsured lack coverage . . . .”). 221 See Congressional Budget Office, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026 at 2 (March 2016), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51385healthinsurancebaselineonecol.pdf; May 2018 CBO Report, supra n.9, at 1, 5. 222 Press Release, CMS, Centers for Medicare and Medicaid Services Releases Reports on the Performance of the Exchanges and Individual Health Insurance Market (July 2, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releasesitems/2018-07-02.html; see also May 2018 CBO Report, supra n.9, at 1, 5 (reporting that for 2018, a monthly average of about 9 million people under age 65 will be insured through nongroup plans purchased on ACA exchanges, a decline from 2017, when the estimated monthly average was 10 million); Ashley Semanskee et al., Data Note: Changes in Enrollment in the
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181. Specifically, “[a]fter peaking in 2016 at 12.7 million, there was an approximately
3.9 [percent] decline in ACA marketplace insurance enrollment in 2017” nationwide,223 and from
2017 to 2018, enrollment dropped by an additional 3.7 percent overall, and by 5.3 percent in
states with federally-facilitated exchanges.224 And while the primary government survey found
no change in the overall rate of the uninsured through the end of 2017,225 preliminary
information for 2018 suggests it is climbing. For example, one survey found that the uninsured
rate among working-age people had risen to 15.5 percent by March 2018, up from 12.7 percent
as of April 2016—meaning that about 4 million working-age people lost insurance coverage.226
Among the likely causes? For all the reasons described above, some of the very actions at issue
Individual Health Insurance Market 3, Kaiser Family Foundation (July 2018), http://files.kff.org/attachment/Data-Note-Changes-in-Enrollment-in-the-Individual-HealthInsurance-Market (reporting that enrollment in ACA-compliant plans peaked at 11.1 million in 2016 and dropped to 10.6 million in the first quarter of 2018). 223 Dan Witters, Uninsured Rate Rises in 17 States in 2017, Gallup, May 9, 2018, https://news.gallup.com/poll/233597/uninsured-rate-rises-states-2017.aspx (citing data from CMS). 224 Press Release, Kaiser Family Foundation, National ACA Marketplace Signups Dipped a Modest 3.7 Percent This Year (Feb. 7, 2018), https://www.kff.org/health-reform/pressrelease/national-aca-marketplace-signups-dipped-a-modest-3-7-percent-thisyear/?utm_source=link_newsv9&utm_campaign=item_233597&utm_medium=copy. 225 Robin A. Cohen et al., Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2017, National Center for Health Statistics (May 2018), https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201805.pdf. An analysis by Gallup and Sharecare, however, found that the rate of the uninsured rose by 1.3 percent from the last quarter of 2016 to the last quarter of 2017—the “largest single-year increase Gallup and Sharecare have measured since beginning to track the rate in 2008, including the period before the [ACA] went into effect.” Zac Auter, U.S. Uninsured Rate Steady at 12.2% in Fourth Quarter of 2017, Gallup, Jan. 16, 2018, https://news.gallup.com/poll/225383/uninsured-rate-steady-fourth-quarter2017.aspx. 226 Sara R. Collins et al., First Look at Health Insurance Coverage in 2018 Finds ACA Gains Beginning to Reverse, To the Point, May 1, 2018, https://www.commonwealthfund.org/blog/2018/first-look-health-insurance-coverage-2018-findsaca-gains-beginning-reverse.
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here: the Trump “[A]dministration’s deep cuts in advertising and outreach during the marketplace open-enrollment periods, a shorter open enrollment period, and other actions that collectively may have left people with a general sense of confusion about the status of the law” or dissuaded enrollment.227
182. These problems will only grow if the Trump Administration’s sabotage efforts are not stopped. The Congressional Budget Office has projected that, between 2018 and 2019, the number of people enrolled in health insurance through the nongroup market—including plans purchased on ACA exchanges and otherwise—will decrease by 3 million, in part because “premiums faced by people who are ineligible for subsidies in the nongroup market will be higher.”228 II. Defendants’ Unlawful Actions Harm the City Plaintiffs by Forcing Them to Spend
More on Uncompensated Care 183. The City Plaintiffs—and, for that matter, many other cities and counties nationwide—are being harmed by Defendants’ unlawful attempts to undermine the ACA, and they will continue to be harmed as long as Defendants’ unlawful actions stand. By driving up the rate of uninsured or underinsured individuals within the City Plaintiffs’ jurisdictions, Defendants’ actions force the City Plaintiffs to devote additional funding, personnel, and other resources to subsidizing and providing uncompensated care for their residents. Defendants’ actions thereby hit the City Plaintiffs’ budgets, including the budgets for their public health departments, free or reduced-cost clinics, and ambulance services. 184. Fulfilling their responsibility to care for their residents, local governments often provide a variety of health services to those who, lacking adequate health insurance, cannot
227 Id. 228 May 2018 CBO Report, supra n.9, at 5, 14.
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otherwise pay for medical treatment. For that reason, “local governments (municipalities,
counties, and special-purpose health or hospital districts) bear a large share of the direct
financing of public hospital and clinic services.”229 In 2013, state and local governments spent
$19.8 billion to cover the costs of uncompensated care.230 As a result, an increase in “the number
of uninsured and the amount of uncompensated care . . . will translate into increased pressure on
state and local government to finance the growing cost of the uninsured.”231
185. Moreover, “compared to the insured population, the uninsured are more likely to
skip or postpone needed care due to cost, miss preventative care, and be diagnosed with cancer at
later stages resulting in earlier death.”232 Then, “when uninsured persons do use services, they
are likely to need more costly health services because of delays in seeking care.”233 There is,
therefore, a direct relationship between increases in the uninsured population and increased costs
for government, including local government.234
229 Institute of Medicine, A Shared Destiny: Community Effects of Uninsurance 128 (2003), https://www.ncbi.nlm.nih.gov/books/NBK221329/ [hereinafter IOM Shared Destiny]. 230 Patrick Kaiser & Eric Cochling, Increasing Access to Quality Healthcare for Low-Income Uninsured Georgians Policy Recommendations for the State of Georgia 12, Georgia Center for Opportunity (June 2014), https://georgiaopportunity.org/assets/2014/06/Charity-Care-Report.pdf. 231 John Holahan & Bowen Garnett, The Cost of Uncompensated Care With and Without Health Reform 4, Urban Institute (Mar. 2010), https://www.urban.org/sites/default/files/publication/28431/412045-The-Cost-ofUncompensated-Care-with-and-without-Health-Reform.PDF; see also Erin F. Taylor et al., Community Approaches to Providing Care for the Uninsured, 25 Health Affairs 173, 173 (2006), https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.25.w173 (“[i]ncreases in the number of uninsured people often strain local safety nets and health systems”). 232 James Benedict, Chronic Disease Management of the Uninsured Patient at Ohio Free Clinics 5, Walden University (2016), https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=3816&context=dissertations. 233 IOM Shared Destiny, supra n.229, at 125. 234 Cf. Jessica Schubel & Matt Broaddus, Uncompensated Care Costs Fell in Nearly Every State as ACA’s Major Coverage Provisions Took Effect, Center on Budget and Policy Priorities (May
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186. Costs like these—costs institutions bear as a result of providing uncompensated
care—motivated the passage of the ACA. In the Act itself, Congress observed the astronomical
costs “of providing uncompensated care to the uninsured”: “$43,000,000,000 in 2008.” 42
U.S.C. § 18091(2)(F). Congress also noted that individuals who choose “to forego health
insurance coverage and attempt to self-insure . . . increase[] financial risks to households and
medical providers.” Id. § 18091(2)(A). Indeed, during the debates over the Act, members of
Congress frequently referred to the need to reduce the costs that providers face because of
uncompensated care.235 And in explaining his Administration’s health care reform agenda in a
speech to the U.S. Conference of Mayors in 2009, President Obama highlighted the need for
action because, among other things, “spiraling health care costs” were “straining budgets across
government.”236 In sum, there is no doubt that reducing the financial burden upon entities that
provide health services, including cities, was one of the core aims of the ACA.
23, 2018), https://www.cbpp.org/research/health/uncompensated-care-costs-fell-in-nearly-everystate-as-acas-major-coverage. 235 See, e.g., 155 Cong. Rec. S13800 (daily ed. Dec. 23, 2009) (statement of Sen. Kaufman) (“Rising medical costs, skyrocketing premiums, increasing numbers of the uninsured and the strain on both business and providers have brought the critical need for health reform back to the Senate this year. Make no mistake, we need health care reform now.”); 155 Cong. Rec. S14126 (daily ed. Dec. 24, 2009) (statement of Sen. Akaka) (“Our health care providers are struggling to meet the increasing burdens imposed on them by greater numbers of uninsured patients and rising costs.”); 156 Cong. Rec. H1880 (daily ed. Mar. 21, 2010) (statement of Rep. Jackson Lee) (claiming that in her district, the ACA would “[r]educe the cost of uncompensated care for hospitals and other health care providers by $27 million annually”); 156 Cong. Rec. H1871 (daily ed. Mar. 21, 2010) (statement of Rep. Ellison) (“When insurance coverage for 358,000 Fifth District residents is improved—and when the cost of uncompensated care for hospitals and other health care providers is reduced by $101 million—that is positive change.”). 236 President Barack Obama, Remarks to the United States Conference of Mayors 127, Feb. 20, 2009, https://www.gpo.gov/fdsys/pkg/PPP-2009-book1/pdf/PPP-2009-book1-doc-pg126.pdf; see also Sen. Nancy Pelosi, Remarks at the 2010 Legislative Conference for National Association of Counties, March 9, 2010, https://www.democraticleader.gov/newsroom/pelosi-remarks-2010legislative-conference-national-association-counties/.
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187. The City Plaintiffs operate or subsidize free or reduced-cost health care centers and clinics, which “have patients who are primarily uninsured, rely on volunteers and resources of the community, and face persistent financial struggles.”237 “The primary reason for using a free clinic is lack of insurance.”238 For example, one study found that nearly 50 percent of the individuals who use publicly funded sexually transmitted infection clinics are uninsured.239 Similarly, uninsured individuals primarily rely on free or reduced-cost immunization clinics to obtain necessary vaccinations.240
188. The City Plaintiffs will have to bear greater costs to maintain their health care centers and clinics if the number of uninsured or underinsured individuals increases. There is a direct relationship between the uninsured rate in a given state and the rate of uninsured visits for which the clinic does not receive full compensation. In states that expanded Medicaid, for example, “[t]here was a substantial decrease in uninsured community health center visits and a
237 David O. Barbe, Council on Medical Services, Free Clinics and the Uninsured 1, American Medical Association (2009), https://www.ama-assn.org/sites/default/files/mediabrowser/public/about-ama/councils/Council%20Reports/council-on-medical-service/a09-cmsfree-clinics.pdf. 238 Akiko Kamimura et al., Uninsured Free Clinic Patients’ Experiences and Perceptions of Healthcare Services, Community Resources, and the Patient Protection and Affordable Care Act, 3 Patient Experience J. 12, 12 (2016), http://pxjournal.org/cgi/viewcontent.cgi?article=1100&context=journal. 239 Karen W. Hoover et al., Continuing Need for Sexually Transmitted Disease Clinics After the Affordable Care Act, American Journal of Public Health (Nov. 2015), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4627523/. 240 Association of State & Territorial Health Officials, Identifying and Vaccinating Uninsured Adults: Strategies and Practices 12 (Sept. 2016), http://www.astho.org/Programs/Immunization/Documents/ASTHO-Identifying-and-VaccinatingUninsured-Adults-(FINAL-5_19_17)/.
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significant increase in Medicaid-covered visits” relative to states that did not.241 But “[d]espite
the uninsured rate dipping to 9.1 percent in 2015, a record low in the U.S., there has been a slow
trend upward” as a result of Defendants’ unlawful actions “that has many clinic leaders
worried—and fighting for funding.”242
189. The City Plaintiffs also operate or subsidize ambulance services, which answer
emergency calls regardless of whether the individual needing care has health insurance. Studies
have shown that “the uninsured . . . disproportionately rely on ambulance service for transport to
the [emergency department].”243 As the number of uninsured or underinsured individuals
increases, ambulance services will have to respond to a larger number of calls for which they
cannot seek reimbursement from insurers. Thus, the ambulance service and, by extension, the
city that runs or subsidizes the service, is left to absorb the increased costs.
190. The City Plaintiffs must address these budgetary shortfalls, and must do so in
ways that impose still greater costs on cities and their residents. “Public subsidy of
uncompensated care delivered to uninsured persons requires that additional public revenues be
raised, resulting in a higher tax burden at the local level, the receipt of monies from federal
241 Heather Angier et al., An Early Look at Rates of Uninsured Safety Net Clinic Visits After the Affordable Care Act, 13 Annals of Family Med. 10, 10 (Jan.-Feb. 2015), https://www.annemergmed.com/article/S0196-0644(10)00384-7/fulltext. 242 Joseph Jaafari, The Demand for Volunteer Physicians Is Rising. The Number of Uninsured Is Too., Nation Swell, Oct. 27, 2017, http://nationswell.com/demand-volunteer-physicians-freehealth-clinics/. 243 Benjamin T. Squire et al., At-Risk Populations and the Critically Ill Rely Disproportionately on Ambulance Transport to Emergency Departments, 20 Annals of Emergency Med. 1, 6 (2010), https://www.ncbi.nlm.nih.gov/pubmed/20554351; see also Zachary F. Meisel et al., Variations in Ambulance Use in the United States: The Role of Health Insurance, Academy Emergency Medicine (Oct. 2011), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3196627/pdf/nihms314403.pdf (“EMS use is higher among those who historically have had difficulty accessing routine medical care, specifically poor and uninsured patients.”)
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coffers, or the diversion of resources from other public purposes.”244 An unexpected increase in the rate of uninsured or underinsured individuals therefore translates to additional strain on already overburdened city budgets and overtaxed city residents.
191. Aside from the direct impact on their public safety and health departments, the City Plaintiffs will have to confront the many downstream effects of a population that is necessarily sicker, less productive, and less able to participate in the community and civic life. Multiple studies have shown that “in areas with many uninsured people, the quality of care was lower, as well,” in part because “it is difficult for health providers to maintain services in areas with large numbers of patients who cannot pay for care.”245 More broadly, “[f]or the communities in which uninsured individuals and families live, the lack or loss of health insurance coverage by some may undermine the shared economic and social foundations of the entire community.”246
192. The effects will be felt throughout the City Plaintiffs’ budgets. As one mayor has put it, “if people don’t get the medical care they need, it’s going to be city fire departments and police departments responding to preventable emergencies.”247 Public school teachers will have
244 IOM Shared Destiny, supra n.229, at 123. 245 Julie Rovner, Millions More Uninsured Could Impact Health of Those With Insurance, Too, Kaiser Health News, July 14, 2018, https://khn.org/news/millions-more-uninsured-could-impacthealth-of-those-with-insurance-too/. 246 IOM Shared Destiny, supra n.229, at 120. 247 Sara Durr, The Nation’s Mayors Stress Impact of Affordable Care Act Repeal, U.S. Conference of Mayors (Jan. 25, 2017), https://www.usmayors.org/2017/01/25/the-nationsmayors-stress-impact-of-affordable-care-act-repeal/ (statement of Mesa, Ariz., Mayor John Giles).
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to deal with students that either miss school or come to school and spread illnesses to other students.248 And other social services departments will face increased demand for public benefits.
193. The City Plaintiffs’ economies will suffer too: “An increasing or high uninsured rate, and the attendant high public costs, may discourage employers from locating or continuing to make their home in a community.”249 Moreover, “the uneven availability of workplace health benefits keeps workers ‘locked in’ to their jobs if they already have coverage through their employer,” inhibiting growth and dynamism in the City Plaintiffs’ economies.250 For example, employees may be unwilling to move to a new job or start a new business, and thereby forego employer-provided health insurance, if doing so forces them to purchase costly insurance on the individual market.
194. All of these costs—budgetary, economic, political, and social—are being borne by each of the City Plaintiffs in this case.
Columbus, Ohio 195. The City of Columbus will be harmed in at least three ways by the rise in the rates of the uninsured and underinsured caused by Defendants’ unlawful actions: it will be forced to pay more to support community health centers that serve its uninsured residents, its ambulance system will face greater unrecouped costs from calls by uninsured and underinsured individuals,
248 Press Release, U.S. Department of Education, Obama Administration Encourages Schools and Districts to Enroll Students in Health Care Coverage Through School Registration (Aug. 31, 2016), https://www.ed.gov/news/press-releases/obama-administration-encourages-schools-anddistricts-enroll-students-health-care-coverage-through-school-registration (“Research shows that children who have access to health coverage are more likely to graduate from high school and college than uninsured children.”). 249 IOM Shared Destiny, supra n.229, at 130. 250 Id.
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and it will suffer all of the downstream costs of a population that is necessarily sicker and less productive.
196. To start, Columbus has a public health department, Columbus Public Health, which “is charged with assuring conditions in which people can be healthy.” Columbus Public Health “is made up of a range of programs providing clinical, environmental, health promotion, and population-based services,”251 and has an annual budget of approximately $56 million and is staffed by 490 full- and part-time employees.
197. Columbus Public Health subsidizes a number of community health centers that, as described above, will face greater demand from uninsured or underinsured individuals who cannot obtain health care elsewhere. In 2017, these community health centers saw a total of 45,616 patients. In total, these centers have an annual budget of approximately $38 million.
198. Most importantly, Columbus Public Health financially supports PrimaryOne Health, which is a collection of ten Columbus neighborhood health centers in medically underserved areas.252 PrimaryOne is designed to be a “system of health center sites throughout Columbus and Franklin County to serve the health care needs of vulnerable, un/under and insured residents within the community.”253
199. In 2017, Columbus subsidized PrimaryOne with $4,367,145 in public funds. That same year, the centers served over 45,000 patients. This included more than 15,000 uninsured patients, an increase of almost 3,000 more uninsured patients than the year before. In contrast,
251 About Columbus Public Health, City of Columbus, https://www.columbus.gov/publichealth/About-Columbus-Public-Health/. 252 The History of PrimaryOne Health, PrimaryOne, http://www.primaryonehealth.org/about/. 253 Id.
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the number of uninsured patients dropped from 17,752 in 2013 to 14,272 in 2014, after the individual mandate took effect.
200. If the rate of uninsured or underinsured individuals increases, then the PrimaryOne Health centers will necessarily see even more patients, and Columbus will either have to provide them with additional funding or let them decrease the range of services they are able to provide. See supra ¶ 188.
201. Columbus Public Health also operates a number of specialty clinics for alcohol and drug abuse prevention, dental services, family planning, immunizations, sexual health, tuberculosis control, women, infants, and children nutrition, and women’s health and wellness.254 Each of these clinics operates on a free or reduced-fee scale and principally serves the uninsured and underinsured populations.255 As with PrimaryOne Health, growth in the uninsured and underinsured population will translate to additional costs for Columbus.
202. Columbus also maintains “one of the best Emergency Medical Services (EMS) in the United States,” operated by the Columbus Division of Fire.256 That system dispatches ambulances to meet urgent health needs, regardless of whether the call comes from an individual who has health insurance or is otherwise able to pay for the call. In 2017, the Columbus Division of Fire answered over 132,000 emergency medic calls and had a budget of over $240 million.
254 About Columbus Public Health, City of Columbus, https://www.columbus.gov/publichealth/About-Columbus-Public-Health/. 255 See, e.g., Dental Clinic, City of Columbus, https://www.columbus.gov/publichealth/programs/Dental-Clinic/. 256 Division of Fire, City of Columbus, https://www.columbus.gov/publicsafety/fire/reports/EMS-Reports/.
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203. If possible, “[r]eimbursement for the expense of emergency ambulance transport is sought from a patient’s Medicare, Medicaid, or commercial health insurance coverage.”257 If an individual “live[s] in the City of Columbus and do[es] not have health insurance coverage, [they] will not receive a bill for transport”; thus, “no Columbus resident will pay anything ‘out of pocket’ as the result of being transported to a hospital by The Columbus Division of Fire.”258 Indeed, while Columbus recoups from 40 to 80 percent of its costs for transports for individuals with private insurance, Columbus only recoups less than 4 percent of its costs for uninsured individuals. For that reason, reimbursements “in no way cover all the costs incurred for treatment and transport.”259
204. As explained above, an increase in the number of uninsured or underinsured individuals will result in more transports for which Columbus does not receive reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 189. Indeed, Columbus’s data shows that this concern is far from speculative: In 2014, after the individual mandate took effect, the number of uninsured transports dropped from 11,123 to 7,943—a decrease of 29 percent. Since then, uninsured transports have remained flat. As the uninsured rate goes up again, however, Columbus can expect to provide additional unreimbursed transports, which will be paid for out of Columbus’s own coffers.
205. Aside from these budgetary impacts, Columbus—a city of nearly 900,000 people, with an economy of $132 billion—is harmed by the need to care for a population that becomes increasingly uninsured and less healthy. As explained above, an increase in the rate of uninsured
257 Id. 258 Id. 259 Id.
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and underinsured individuals will impose additional drains on the city’s budget and its personnel, and will make the city a less attractive place to live and work.
206. Each of these harms is traceable to Defendants’ unlawful actions. As explained above, Defendants’ actions increase the rate of the uninsured and underinsured, which in turn affects Columbus’s budget and diminishes Columbus’s economic prospects. Indeed, the Urban Institute projects that Defendants’ sabotage efforts, among other factors, will cause enrollment in ACA-compliant plans to decrease in Ohio by 31.6 percent for 2019—45.6 percent if expanded access to short-term policies is factored in260—thus increasing the rate of the uninsured and the underinsured. That is unsurprising, given that one study estimates that Ohio has a “catastrophic risk” of a potential 90 percent premium increase.261 Moreover, Columbus, and surrounding Franklin County, tend to have a higher rate of uninsured individuals than Ohio overall.262 Columbus is therefore particularly vulnerable to Defendants’ attempts to sabotage the ACA and the resulting increase in the rate of uninsured. By the same token, each of these harms will be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
Baltimore, Maryland 207. The City of Baltimore, Maryland, will be harmed in many of the same ways as Columbus. By increasing the rate of uninsured and underinsured individuals, Defendants’ actions will make it costlier for Baltimore to support its health clinics and other programs; they will
260 March 2018 Urban Institute Study, supra n.116, at 11. 261 March 2018 Covered California Post, supra n.155. 262 See 2017 Community Health Assessment 2-5, Columbus, Worthington, Franklin County (Sept. 2017), https://www.columbus.gov/WorkArea/DownloadAsset.aspx?id=2147499258; Selected Characteristics of Health Insurance Coverage in the United States, U.S. Census Bureau (2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (select table and enter “Ohio” and “Columbus city, Ohio”).
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likewise force Baltimore to spend more to cover unrecouped costs from city ambulance calls; and Baltimore, too, will suffer the many harms associated with a population that is necessarily less healthy.
208. “The Baltimore City Health Department is the oldest continuously-operating health department in the United States, formed in 1793.” It is charged with “working to improve the health and well-being of Baltimore residents”—and thereby “make Baltimore a city where all residents realize their full health potential.” To that end, the department “has a wide-ranging area of responsibility,” including matters like acute communicable diseases, chronic disease prevention, HIV/STD, maternal-child health, school health, and senior services. It is staffed by approximately 800 employees and has an annual budget of approximately $126 million.263
209. In particular, the Baltimore City Health Department operates a number of specialty clinics out of two principal facilities. These include clinics for reproductive health, sexually transmitted diseases, dental and oral health care, and immunizations.264 The department also subsidizes a Men’s Health Center, which operates out of space provided at one of the department’s own facilities.265 Each of these clinics provides services on a free or reduced-fee scale and therefore serves as an essential resource for the uninsured and underinsured populations.266 Consequently, any growth in the uninsured and underinsured population will mean additional costs for the city.
263 About the Baltimore City Health Department, Baltimore City Health Department, https://health.baltimorecity.gov/about. 264 Health Clinics & Services, Baltimore City Health Department, https://health.baltimorecity.gov/programs/health-clinics-services. 265 Men’s Health Center, Baltimore City Health Department, https://health.baltimorecity.gov/health-clinics-services/mens-health-center. 266 See, e.g., Family Planning & Reproductive Health Clinic, Baltimore City Health Department, https://health.baltimorecity.gov/health-clinics-services/family-planning-reproductive-health.
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210. The Baltimore City Health Department also provides or subsidizes a number of other services for Baltimore’s uninsured and underinsured residents. In particular, the Department funds a visiting-nurse program that makes house calls for individuals who tend to use ambulance services frequently, including those with chronic health conditions like diabetes, hypertension, asthma, and mental health disorders. The Department also funds a number of other programs focused on specific health conditions, including a Community Asthma Program, a Tuberculosis Control Program, a Childhood Lead Poisoning Prevention Program, and programs for substance abuse.267 And the Department subsidizes a number of other entities that provide services to Baltimore residents, including the Baltimore Family League and Health Care Access Maryland. An increase in the uninsured rate will similarly impose additional burdens on each of these programs, and therefore require more funding from the city.
211. Like Columbus, the Baltimore City Fire Department also maintains an ambulance system that answers calls whether or not they come from individuals with health insurance or who are otherwise able to pay.268 In 2017, the Baltimore City Fire Department answered over 100,000 emergency medic calls (with 17,000 from uninsured residents) and had a budget of over $42 million for emergency medical services.
212. The Baltimore City Fire Department attempts to recoup its costs for ambulance services by seeking reimbursement from a patient’s Medicare, Medicaid, or commercial health
267 See, e.g., Asthma, Baltimore City Health Department, https://health.baltimorecity.gov/node/454; Health Clinics & Services, Baltimore City Health Department, https://health.baltimorecity.gov/programs/health-clinics-services; Lead Poisoning, Baltimore City Health Department, https://health.baltimorecity.gov/lead/lead-poisoning; Substance Use and Misuse, Baltimore City Health Department, https://health.baltimorecity.gov/programs/substance-abuse; Tuberculosis, Baltimore City Health Department, https://health.baltimorecity.gov/node/164. 268 See Welcome to the Baltimore City Fire Department, Baltimore City Fire Department, https://fire.baltimorecity.gov/.
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insurance coverage. If a patient lacks insurance, the department will seek reimbursement from the patient personally, making several attempts to collect on the debt. However, the Department is rarely successful; while, on average, the department recoups 90 percent or more of its costs for ambulance calls from individuals with private insurance, it only recoups less than 7 percent of its costs for uninsured individuals. Thus, as with Columbus, more uninsured and underinsured individuals means more ambulance calls for which Baltimore does not receive reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 189.
213. Indeed, Baltimore’s ambulance system will be hit especially hard; in its recent strategic plan, the Baltimore City Fire Department identified “[r]esources allocation for EMS: allotment of resources with increasing EMS call volume; staffing; too many calls for amount of personnel we have; potential closings” as the community’s chief area of concern.269 Baltimore has adopted multiple programs to try to deal with this problem, including the visiting nurse program described above, and a High Utilizer Task Force “focused on strategies to support the most vulnerable patients, whose unmet social, complex medical, behavioral health, or environmental needs contribute to repetitive, avoidable use of acute health services.”270 An increase in the uninsured rate will only further strain a system which is already overstretched.
214. Finally, Baltimore—a city of over 600,000 people, with a $187.4 billion economy—is similarly harmed by the burdens imposed by a sicker population. As with Columbus, an increase in the uninsured rate will drain Baltimore’s budget and resources across the board, and will make the city a less attractive place to live and work.
269 Strategic Plan 2016-2021 at 9, Baltimore City Fire Department (2016), http://fire.baltimorecity.gov/sites/default/files/Baltimore%20Strategic%20Plan%2020162021%20FINAL%2016%2010%2016%20corrected.pdf. 270 High Utilizer Task Force, Baltimore City Health Department, https://health.baltimorecity.gov/high-utilizer-task-force.
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215. These harms, again, can be traced directly to Defendants’ unlawful actions. Defendants’ actions are contributing to stark premium increases in Maryland. The two insurers on the state’s ACA exchange “requested average rate increases for 2019 that ranged from 18.5 percent to 91.4 percent, depending on the type of plan.”271 Maryland has been cleared by state legislators to petition CMS to “establish a reinsurance program that would create a pot of money for insurers to cover the most expensive claims,” but a health economist “said he would be shocked if the Trump [A]dministration approved such a request, given its efforts to weaken Obamacare”: “It just seems very unlikely to me that Trump would approve this . . . . Maryland is easily saying we want to help prop up Obamacare, which the Trump administration doesn’t want to have anything to do with.”272
216. Beyond 2019, one study describes Maryland as having a “high risk” of experiencing premium increases of up to 50 percent.273 Another predicts premium increases averaging 30 percent.274
217. Higher premiums mean more uninsured families and individuals. Sharply rising premiums have already had an effect on Maryland, with enrollees on Maryland’s ACA exchange dropping 13 percent from 2017 to 2018.275 Looking ahead, the Urban Institute estimates a further
271 Andrea K. McDaniels, CareFirst and Kaiser Ask Again for Large Rate Increases on Insurance Sold on State Exchange, Baltimore Sun, May 7, 2018, http://www.baltimoresun.com/health/bs-hs-insurance-rate-requests-20180507-story.html. 272 Id. 273 See March 2018 Covered California Post, supra n.155. 274 KFF Tracking 2019 Premium Changes, supra n.216. 275 Andrea K. McDaniels, CareFirst and Kaiser Ask Again for Large Rate Increases on Insurance Sold on State Exchange, Baltimore Sun, May 7, 2018, http://www.baltimoresun.com/health/bs-hs-insurance-rate-requests-20180507-story.html.
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20.1 percent decrease in 2019.276 Like Columbus, Baltimore has a higher uninsured rate than the rest of its state, meaning that Baltimore is also particularly vulnerable to an increase in the uninsured rate caused by Defendants’ sabotage efforts.277 And again like Columbus, Baltimore’s harms will be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
Cincinnati, Ohio 218. The City of Cincinnati will, like Columbus and Baltimore, be harmed by having to pay more to support clinics that serve the uninsured and underinsured population, to maintain ambulance services that respond to calls from uninsured residents, and to manage an increasingly less healthy and less productive population. 219. “Since 1826, the Cincinnati Health Department . . . has been committed to protecting and improving the health of the people of Cincinnati.” The Department is “a nationally recognized leader in public health” that “advocates for responsive health and human services that promote healthy living environments and social well-being, as well as works to reduce health inequities such as poverty and unemployment.”278 The Department has an annual budget of approximately $51 million and is staffed by 490 employees. 220. The Cincinnati Health Department subsidizes a number of health centers that will, again, face greater demand as the rate of uninsured and underinsured individuals increases. These centers have an annual budget of $23 million. In 2017, these centers saw about 45,000
276 March 2018 Urban Institute Study, supra n.116, at 10. 277 See Selected Characteristics of Health Insurance Coverage in the United States, U.S. Census Bureau (2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (select table and enter “Maryland” and “Baltimore city, Maryland”). 278 About the Health Department, City of Cincinnati, https://www.cincinnatioh.gov/health/about-the-health-department/.
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patients, with 95,000 individual visits. Specifically, these centers saw 13,123 uninsured patients—an 11 percent increase over the 2016 figure of 11,776 patients.
221. Most importantly, the Cincinnati Health Department operates seven freestanding primary-care centers, which provide a full range of general medical services to Cincinnati’s uninsured residents. Cincinnati also operates nine dental centers, including one combined vision and dental center. The Department’s centers operate on a sliding-fee scale basis, where uninsured residents pay based on their income. Thus, an increase in the uninsured and underinsured rate will mean that Cincinnati must pay more to provide care to its residents.
222. Aside from its free-standing health clinics, the Cincinnati Health Department operates thirteen School Based Health Centers, serving 10,000 students, out of Cincinnati public schools, which provide “physicals, asthma management, immunizations, prescription medications, sick and injury care, and health education to children and families.”279 These centers are available to uninsured students, and will likewise see greater demand if those students and their families lack health insurance coverage.
223. The Cincinnati Health Department also operates several other programs designed to improve the health of city residents. For example, the Department operates a First Steps Program that provides services, including home visits, to new mothers and their infant children;280 a Men’s Health Initiative that “specializes in providing health education and linking services to men who have been historically underserved”;281 and a Community Health Nursing
279 School & Adolescent Health, City of Cincinnati, https://www.cincinnatioh.gov/health/cincinnati-health-department-divisions1/school-adolescent-health/. 280 Maternal and Infant Health, City of Cincinnati, https://www.cincinnatioh.gov/health/cincinnati-health-department-divisions1/fetal-infant-mortality/. 281 Men’s Health, City of Cincinnati, https://www.cincinnati-oh.gov/health/cincinnati-healthdepartment-divisions1/men-s-health1/.
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Program that provides “comprehensive nursing services” on a sliding-scale basis because “when coverage stops, we don’t.”282 Each of these services, too, will cost more to run as the rate of the uninsured and underinsured goes up.
224. Cincinnati also maintains an emergency medical services system, operated by the Cincinnati Fire Department.283 That system dispatches ambulances to meet urgent health needs, regardless of whether the call comes from an individual who has health insurance or is otherwise able to pay for the call. In 2017, the Cincinnati Fire Department had a budget of over $60 million, and answered over 62,000 emergency medic calls. Around 34,000 of those calls resulted in hospital transports, and around 4,300 of those transports involved uninsured patients. Each of these numbers increased from 2016 to 2017, and all else being equal will continue to increase in 2018 because of the Trump Administration’s actions.
225. If a transported patient lacks insurance, Cincinnati will attempt to recoup its costs from the patient directly. However, while Cincinnati recoups between 93 percent and 94 percent of its billed costs from private insurers (based on rates negotiated by the city), it recoups less than 3 percent of its costs from uninsured individuals. Thus, as explained above, an increase in the number of uninsured or underinsured individuals will result in more transports for which Cincinnati receives little reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 189.
226. Setting aside these budgetary impacts, Cincinnati—a city of around 300,000 people, with an economy of $132 billion—is harmed by the need to care for an increasingly
282 Nursing Services, City of Cincinnati, https://www.cincinnati-oh.gov/health/cincinnati-healthdepartment-divisions1/nursing-services/. 283 EMS Operations, City of Cincinnati, https://www.cincinnati-oh.gov/fire/operations/emsoperations/.
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uninsured and less healthy population. As explained above, an increase in the rate of uninsured and underinsured individuals will impose additional drains on Cincinnati’s budget and its personnel, and will make the city a less attractive place to live and work.
227. Cincinnati’s harms, too, are traceable to Defendants’ unlawful actions—as explained above, those actions increase the rate of the uninsured and underinsured, which in turn affects Cincinnati’s budget and diminishes Cincinnati’s economic prospects. As explained above, Defendants’ actions are causing the uninsured rate in Ohio to rise. See supra ¶ 206. Like Columbus, Cincinnati has a higher uninsured rate than Ohio overall, and is likewise particularly vulnerable to Defendants’ attempts to sabotage the ACA.284 Accordingly, each of these harms will also be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
Chicago, Illinois 228. Much like Columbus, Baltimore, and Cincinnati, the City of Chicago, too, will be harmed by the rise in the uninsured and underinsured rate caused by Defendants’ unlawful actions, including by being forced to pay more to operate and subsidize the clinics that serve its uninsured and underinsured residents, to fund its ambulance system in the face of greater unrecouped costs from calls by uninsured and underinsured individuals, and to manage the downstream costs of a population that is necessarily sicker and less productive.
284 See Community Health Assessment 33, City of Cincinnati, https://www.cincinnatioh.gov/health/assets/File/EDIT%20THIS%20CHA_12_21_17%20FINAL.pdf (last updated Dec. 21, 2017); Selected Characteristics of Health Insurance Coverage in the United States, U.S. Census Bureau (2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (select table and enter “Ohio” and “Cincinnati city, Ohio”).
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229. Chicago has a Department of Public Health that seeks to promote and improve the health of city residents. The Department has an annual budget of about $159 million and is staffed by more than 600 full-time employees.285
230. The Chicago Department of Public Health operates free or reduced-cost clinics that, as described above, will face greater demand from uninsured or underinsured individuals who cannot obtain health care elsewhere. Specifically, the Department operates five clinics that provide free vaccinations;286 five clinics that provide mental-health services at no cost for uninsured Chicago residents;287 and three clinics that provide free testing and treatment for sexually transmitted infections.288 Collectively, these clinics serve thousands of uninsured city residents.
231. The Chicago Department of Public Health also partners with community-based health centers to offer a wide array of medical services, including for uninsured patients. These health centers operate six clinics that provide primary care as well as care directed to the needs
285 2018 Budget Overview 122, City of Chicago, https://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/2018Budget/2018_Budget _Overview.pdf [hereinafter 2018 Budget Chicago Overview]. 286 Walk-In Immunization Clinics, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/supp_info/healthprotection/immunizations_walk-inclinics.html. 287 Mental Health Centers, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/supp_info/behavioralhealth/mental_health_centers.html. 288 STI/HIV Testing and STI Treatment, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/provdrs/health_services/svcs/get_yourself_eva luatedforstihivaids.html.
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of women and children and two primary-care clinics for people living with HIV/AIDS.289 Chicago provides funding for these clinics as well.290
232. If the rate of uninsured or underinsured individuals increases, then the clinics operated by the Chicago Department of Public Health and its community-based partners will necessarily have to provide free or reduced-cost care to more patients. In that event, Chicago either must provide the Department and its partners with more funding, or the Department and its partners must decrease the services that they provide.
233. The Chicago Fire Department also provides ambulance transportation services to its residents, including its uninsured and underinsured residents. The Department receives about $88 million in annual funding for emergency medical services, employing nearly 800 people to provide those services.291 The Department’s paramedics provide ambulance-transportation services approximately 250,000 times per year.
234. The Chicago Fire Department provides ambulance services regardless of the patient’s income or insurance status. Chicago generally seeks reimbursement for ambulance services from the patient or, if applicable, the patient’s insurer.292 But Chicago usually does not receive full reimbursement for ambulance services from its uninsured residents. In 2017, for example, the Chicago Fire Department provided ambulance services to 53,326 patients for whom
289 Health Services, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/provdrs/health_services.html. 290 Neighborhood Health Clinic Information 2012, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/supp_info/clinical_health/neighborhood_healt hclinicinformation2012.html. 291 2018 Chicago Budget Overview, supra n.285, at 119. 292 Ambulance Bills, City of Chicago, https://www.cityofchicago.org/city/en/depts/fin/supp_info/revenue/ambulance_bills.html.
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no insurance was identified. Chicago charged these patients $55,242,627 for ambulance services but collected just $1,755,545—a loss of $53,487,082.
235. As explained above, an increase in the number of uninsured or underinsured individuals will result in more ambulance transports for which Chicago does not receive reimbursement and thus must make up for the shortfall in its budget.
236. Aside from these budgetary impacts, Chicago—a city of some 2.7 million people with a gross regional product exceeding $600 billion—is, unsurprisingly, harmed by the need to care for a population that is increasingly uninsured and less healthy. As explained above, an increase in the rate of uninsured and underinsured individuals will impose additional drains on the city’s budget and its personnel and will make the city a less attractive place to live and work.
237. Each of these harms is traceable to Defendants’ unlawful actions. As explained above, Defendants’ actions increase the rate of the uninsured and underinsured, which in turn affects Chicago’s budget and diminishes Chicago’s economic prospects. Indeed, the Urban Institute projects that Defendants’ sabotage efforts, among other factors, will cause enrollment in ACA-compliant plans to decrease in Illinois by 25 percent for 2019—39.1 percent if expanded access to short-term policies is factored in293—thus increasing the rate of the uninsured and the underinsured. Another study estimates that Illinois has a “high risk” of a potential 50 percent premium increase.294 Moreover, Chicago tends to have a higher rate of uninsured individuals than Illinois overall, leaving Chicago particularly exposed to Defendants’ sabotage efforts.295
293 March 2018 Urban Institute Study, supra n.116, at 10. 294 March 2018 Covered California Study, supra n.155. 295 See Selected Characteristics of Health Insurance Coverage in the United States, U.S. Census Bureau (2016), https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (select table and enter “Illinois” and “Chicago city, Illinois”).
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Once again, each of these harms will be redressed by enjoining the challenged provisions of the 2019 Rule and Defendants’ efforts to sabotage the ACA. III. Defendants’ Unlawful Actions Harm the Individual Plaintiffs by Making Insurance
Coverage Harder and More Expensive to Procure 238. Defendants’ unlawful actions have also harmed individuals and families, by making it harder and more expensive for them to purchase health insurance on the individual market. As explained above, Defendants’ conduct has caused premiums and deductibles to skyrocket nationwide, and will only drive them higher still. 239. Every additional dollar that, owing to Defendants’ actions, an individual must spend to acquire health insurance constitutes financial harm. There can be no dispute that the rising cost of health insurance is a problem Congress specifically set out to address in enacting the ACA. Congress specifically noted its desire to “significantly reduc[e] the number of the uninsured,” and thereby “lower health insurance premiums.” 42 U.S.C. § 18091(2)(F). In other words, the ACA expressly “seeks to make insurance more affordable” for individuals and families. King, 135 S. Ct. at 2487. 240. Since President Trump took office, however, premiums for health insurance purchased on the individual market have sharply increased. In the spring of 2017, insurers planned for single-digit premium increases; by the fall, insurers had begun announcing hikes of 40 percent or higher. Many experts agree that “[i]f the White House had made a good-faith effort to implement Obamacare . . . premiums on the marketplaces likely would have increased by single digits on average.”296 Similarly, “[i]nsurers in several states have requested large rate
296 Dylan Scott, Obamacare Premiums Were Stabilizing. Then Trump Happened, Vox, Oct. 18, 2018, https://www.vox.com/policy-and-politics/2017/10/18/16458316/obamacare-premiumstrump.
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hikes for 2019, with many pointing to steps taken by President Donald Trump and Republicans
in Congress as the main reasons why.”297
241. Perhaps nowhere has the rising cost of health insurance been felt more than in
Charlottesville, Virginia. For the 2018 benefit year, “[m]onthly health-care insurance premiums
increased all over America . . . but nowhere as dramatically as in Charlottesville,” according to
the Kaiser Family Foundation.298 “An exodus of carriers, which was blamed on losses caused by
the instability of the Obamacare marketplace,” and in turn directly attributable to the Trump
Administration’s actions, “created a coverage vacuum, leaving locals and insurance regulators
scrambling.”299 As a result, monthly premiums for individuals and families tripled for 2018—
becoming the highest in the nation.300
242. Specifically, Optima Health, then the area’s only individual market insurer,
offered plans with premiums around $2,500 to $3,000 a month for a family of four, with an
annual deductible of around $10,000 to $15,000—meaning that a family would have to pay
nearly $50,000 before it saw any benefit from its health insurance.301 Rising premiums and
297 Tami Luhby, Trump Moves Pushing Up Obamacare Premiums for 2019, CNN, June 7, 2018, https://www.cnn.com/2018/06/07/politics/obamacare-premiums/index.html. 298 Colby Itkowitz, Where Are the Most Expensive ACA Plans in America? Charlottesville., Washington Post, Nov. 16, 2017, https://www.washingtonpost.com/local/where-are-the-mostexpensive-aca-plans-in-america-charlottesville/2017/11/16/e1b352d8-ca27-11e7-aa9654417592cf72_story.html. 299 Rachel Bluth, The City With the Most Expensive ACA Insurance in the U.S., Atlantic, Apr. 24, 2018, https://www.theatlantic.com/health/archive/2018/04/the-city-with-the-most-expensiveaca-insurance-in-the-united-states/558605/. 300 Lisa Provence, Sticker Shock: Charlottesville Health Insurance Premiums Spike to Highest in Nation, C-Ville, Nov. 14, 2017, http://www.c-ville.com/sticker-shock-charlottesville-healthinsurance-premiums-spike-highest-nation/#.W1dgkdJKhyw. 301 Robert Pear, Middle-Class Families Confront Soaring Health Insurance Costs, New York Times, Nov. 16, 2017, https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiumsmiddle-class.html?_r=0.
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deductibles forced Charlottesville residents to resort to desperate measures to afford health insurance, including hiring an unnecessary employee to purchase small business insurance, moving to another county, cutting their own pay, obtaining a new job, or purchasing multiple non-ACA compliant plans.302
243. Insurers have again sought to increase their rates in Virginia for 2019 by around 20 percent.303 While Optima sought to slightly decrease its rates, that reduction does not come close to canceling out the impact of its staggering rate increases in the past.304 Moreover, Optima’s (and other insurers’) rates would likely be lower still, if not for Defendants’ attempts to sabotage the ACA.
244. For all the reasons described above, Defendants’ actions have caused these staggering increases in the cost of health insurance, in Virginia and nationwide. The Virginia Bureau of Insurance reports that insurers are raising rates “due to the rising cost of health care but also federal actions or inaction that raise costs and create uncertainty in the insurance markets.”305 Multiple independent studies have also connected rising health care premiums to Defendants’ sabotage efforts. The Urban Institute, for example, attributes a potential 19.1 percent
302 Colby Itkowitz, Where Are the Most Expensive ACA Plans in America? Charlottesville., Washington Post, Nov. 16, 2017, https://www.washingtonpost.com/local/where-are-the-mostexpensive-aca-plans-in-america-charlottesville/2017/11/16/e1b352d8-ca27-11e7-aa9654417592cf72_story.html. 303 John Tozzi, Obamacare Premiums to Surge Next Year, Early Requests Show, Bloomberg, May 7, 2018, https://www.bloomberg.com/news/articles/2018-05-07/obamacare-premiums-tosurge-next-year-early-rate-requests-show. 304 Id. 305 Press Release, Virginia Gov. Ralph S. Northam, Governor Northam Statement on Anticipated Double-Digit Health Insurance Rate Increases (May 10, 2018), https://www.governor.virginia.gov/newsroom/all-releases/2018/may/headline-825487-en.html.
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increase in insurance premiums in Virginia to Defendants’ policies, among other factors.306 Similarly, the Kaiser Family Foundation reports increases of 7 to 14 percent for lower-cost insurance plans in 2019.307 And Covered California describes Virginia as being at “high risk” for future premium increases of up to 50 percent due to “ongoing federal uncertainty.”308 By the same token, premiums and deductibles would fall if Defendants implemented the Affordable Care Act faithfully, as they are required to do.
245. Optima has also placed the blame on Defendants, justifying its 2018 rate increases by pointing to “marketplace changes,” including “the uncertainty in Washington, and other carriers withdrawing from the market or reducing their service area.”309 Specifically, Optima’s 2018 rate filing attributed the increases to “growing uncertainty in the marketplace, particularly with respect to various aspects of the Affordable Care Act . . . that continue to remain undecided and unstable,” including “the effectiveness / enforceability of the individual mandate, stability of available plan options in the marketplace (e.g., carriers exiting the market), unknown funding of the CSR subsidies, and preliminary rate filings indicating substantial rate actions for 2018 across various marketplaces, including Virginia.”310 Optima’s then-CEO and President, Michael
306 March 2018 Urban Institute Study, supra n.116, at 16. 307 KFF Tracking 2019 Premium Changes, supra n.216; see also John Tozzi, Obamacare Premiums to Surge Next Year, Early Requests Show, Bloomberg, May 7, 2018, https://www.bloomberg.com/news/articles/2018-05-07/obamacare-premiums-to-surge-next-yearearly-rate-requests-show. 308 March 2018 Covered California Post, supra n.216. 309 2018 Individual & Family Plan Information, Optima Health, https://www.optimahealth.com/plans/individual/2018-plan-coverage-information. 310 Part III Actuarial Memorandum, Optima Health Plan Individual Rate Filing 6, 28-29 Milliman (Sept. 15, 2017), http://ratereview.healthcare.gov/files/1023591_2018_I_OHP_PartIII_Act_Memo_20170915.pdf.
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Dudley, confirmed that “Optima is affected by the same factors destabilizing insurance markets
elsewhere.”311
246. Other regional insurers, like CareFirst Blue Cross Blue Shield and Evergreen
Health, have stated that Defendants are partly responsible for these substantial premium hikes.312
And still others, like Anthem, have cited Defendants’ sabotage efforts in defending their decision
to exit the Virginia market, thus limiting choice and driving up prices for individual
consumers.313 These are not isolated cases: a study of insurer decisionmaking by the Urban
Institute found that most insurers “remain committed to participating in the individual market,”
but that their “commitment has been tested by the continued erosion of policies designed to
maintain the stability of the individual market.”314
247. Steve Vondra and Bonnie Morgan, a married couple who have been residents of
Charlottesville since 2009 and 2010, respectively, have therefore been forced to pay higher
premiums for lower-quality insurance because of Defendants’ actions.
311 Robert Pear, Middle-Class Families Confront Soaring Health Insurance Costs, New York Times, Nov. 16, 2017, https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiumsmiddle-class.html?_r=0.. 312 Sarah Kliff, The Trump Administration Is Making Obamacare More Expensive, Vox, May 8, 2017, https://www.vox.com/2017/5/8/15563448/trump-insurance-premiums-2018. 313 Michael Martz, Anthem, State’s Largest Health Insurer, Drops Out of Virginia’s Individual Market for 2018, Richmond Times-Dispatch, Aug. 11, 2017, https://www.richmond.com/news/virginia/government-politics/anthem-state-s-largest-healthinsurer-drops-out-of-virginia/article_c704aecb-f84d-5602-92ce-a04b711edb30.html; Katie O’Connor, 58 Virginia Counties Left Without an Insurance Option in 2018 Exchanges as Deadline Approaches, Richmond Times-Dispatch, Sept. 13, 2017, https://www.richmond.com/life/health/virginia-counties-left-without-an-insurance-option-inexchanges-as/article_2e83056f-3d2e-5a04-9967-32bcbc93ea71.html. 314 Sabrina Corlette et al., Insurers Remaining in Affordable Care Act Markets Prepare for Continued Uncertainty in 2018, 2019 at 3, Urban Institute (Mar. 2018), https://www.rwjf.org/content/dam/farm/reports/issue_briefs/2018/rwjf444308.
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248. Steve has a preexisting condition. Before the ACA, Steve’s health insurance situation was precarious: he had not had health insurance since 2005, when he closed his business. He was unable to purchase insurance because, at the time, insurers were able to discriminate against individuals on the basis of their health history and health status. While Bonnie had insurance through her work, Steve was ineligible, as the two were not married at the time.
249. After the ACA prohibited discrimination on the basis of preexisting conditions, Steve and Bonnie were finally able to purchase insurance on the individual exchange. In 2016, they purchased a bronze plan with a premium of around $1050 a month for the two of them. They subsequently upgraded their coverage in 2017 to a silver plan with a premium of around $1270 a month.
250. Defendants’ attempts to sabotage the ACA, however, have dramatically increased the prices Steve and Bonnie pay for coverage. Steve and Bonnie do not receive subsidized coverage (advance premium tax credits) under the Act. In 2018, Steve and Bonnie returned to a bronze plan, sold by Optima. However, the monthly premium rose to a staggering $3327.65 for the two of them—a 261 percent increase above what they paid for a silver plan in 2017. Moreover, the plan’s annual deductible, around $14,400, is also significantly higher than the deductible for the plans they purchased in 2016 and 2017. Combining a year’s worth of premiums and the annual deductible, Steve and Bonnie would have to spend nearly $55,000 before receiving any benefit from their insurance.
251. Steve and Bonnie have been injured by having to pay higher premiums and deductibles for their health coverage—the very injury the ACA was intended to prevent. That injury is the direct result of Defendants’ ongoing attempts to sabotage the ACA, including the
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2019 Rule and Defendants’ other unlawful actions. And Steve and Bonnie’s injury would be redressed if Defendants were instead required to implement the ACA lawfully and in good faith.
CLAIMS FOR RELIEF Count One (Violation of the Administrative Procedure Act) 252. Plaintiffs repeat and incorporate by reference each of the foregoing allegations as if fully set forth herein. 253. The 2019 Rule is “final agency action for which there is no other adequate remedy in a court” and is “subject to judicial review.” 5 U.S.C. § 704; see id. § 702. 254. Under the Administrative Procedure Act, a “reviewing court shall . . . hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. § 706(2)(A). 255. As detailed above, Defendants HHS, Secretary Azar, CMS, and Administrator Verma have failed to provide adequate reasons, and failed to adequately respond to comments, for many provisions of the 2019 Rule, such that they are “arbitrary” and “capricious.” Id. In addition, as also detailed above, many provisions of the 2019 Rule violate the Affordable Care Act, and therefore are “not in accordance with law.” Id. Accordingly, upon application by the specified Plaintiffs, this Court must “hold unlawful and set aside” the following provisions of the 2019 Rule: a. The provision depriving taxpayers of advance premium tax credits for
failing to reconcile credits for prior years on their tax returns without direct notification of their ineligibility. See supra ¶¶ 50-54. (Columbus, Baltimore, Cincinnati, Chicago, Individual Plaintiffs) b. The provision outsourcing plan review on FFEs to states. See supra ¶¶ 5561. (Columbus, Cincinnati, Individual Plaintiffs)
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c. The provision allowing insurance agents, brokers, and insurers to select their own third-party auditors. See supra ¶¶ 62-66. (Columbus, Cincinnati, Chicago, Individual Plaintiffs)
d. The provision discontinuing support for standardized option insurance plans. See supra ¶¶ 68-72. (Columbus, Cincinnati, Chicago, Individual Plaintiffs)
e. The provisions eliminating the requirements that exchanges have at least two Navigators, that one of those Navigators be a community non-profit, and that Navigators have a physical presence in the state. See supra ¶¶ 7377. (Columbus, Baltimore, Cincinnati, Chicago, Individual Plaintiffs)
f. The provision eliminating requirements that Small Business Health Options Program Health Insurance Exchanges maintain employee eligibility, premium aggregation, and online enrollment functionality. See supra ¶¶ 78-80. (Columbus, Cincinnati, Chicago)
g. The provision requiring consumers who attest to income between 100 percent and 400 percent of the federal poverty line to verify their income if available electronic data sources indicate their income to be below the federal poverty line. See supra ¶¶ 81-84. (Columbus, Cincinnati, Chicago, Individual Plaintiffs)
h. The provision allowing states to petition for a reduction in risk adjustment transfer payments. See supra ¶¶ 86-93. (Columbus, Baltimore, Cincinnati, Chicago, Individual Plaintiffs)
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i.

The provisions exempting student health insurance plans from rate review

and increasing the threshold for insurance rate increases subject to review

to 15 percent. See supra ¶¶ 94-99. (Columbus, Baltimore, Cincinnati,

Chicago, Individual Plaintiffs)

j.

The provision allowing insurers to claim a standard 0.8 percent of

premium for quality improvement activities when calculating medical loss

ratio. See supra ¶¶ 100-05. (Columbus, Baltimore, Cincinnati, Chicago,

Individual Plaintiffs)

Count Two (Violation of the Take Care Clause)

256. Plaintiffs repeat and incorporate by reference each of the foregoing allegations as

if fully set forth herein.

257. Under the Take Care Clause of the U.S. Constitution, the President and his or her

Administration must “take care that the laws be faithfully executed.” U.S. Const. art. II, § 3.

258. As detailed above, Defendants have violated the Take Care Clause by failing to

take care to faithfully execute the Affordable Care Act.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that this Court:

1. declare that the provisions of the 2019 Rule identified in Count One are arbitrary,

capricious, or otherwise not in accordance with law under the Administrative Procedure Act;

2. vacate the provisions of the 2019 Rule identified in Count One under the

Administrative Procedure Act;

3. declare that Defendants are violating the Take Care Clause by not faithfully

executing the Affordable Care Act;

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4. declare that Defendants are violating the Take Care Clause by taking executive

action to:

a. suppress the number of individuals and families obtaining health insurance

through ACA exchanges;

b. increase premiums for health insurance in the ACA exchanges;

c. diminish the availability of comprehensive, reasonably-priced health

insurance for individuals and families with preexisting conditions;

d. discourage individuals and families from obtaining health insurance that

provides the coverage that Congress, in the ACA, determined is necessary

to protect American families against the physical and economic

devastation that results from lesser insurance, with limits on coverage that

leaves them unable to cover the costs of an accident or unexpected illness;

5. order Defendants to comply with their constitutional obligation to take care to

faithfully execute the ACA, including by acting to:

a.

expand, rather than suppress, the number of individuals and families

obtaining health insurance through ACA exchanges;

b.

reduce, rather than increase, premiums for health insurance in the ACA

exchanges;

c.

promote, rather than diminish, the availability of comprehensive,

reasonably-priced health insurance for individuals and families with

preexisting conditions;

d.

encourage, rather than discourage, individuals and families to obtain

health insurance that provides the coverage that Congress, in the ACA,

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determined is necessary to protect American families against the physical and economic devastation that results from lesser insurance, with limits on coverage that leaves them unable to cover the costs of an accident or unexpected illness; 6. enjoin Defendants from implementing Executive Order No. 13,765 so as to undermine, rather than faithfully execute, the ACA; 7. order Defendants to fully fund advertising under the ACA; 8. enjoin Defendants from producing and disseminating advertisements that aim to undermine the ACA; 9. order Defendants to fully fund Navigators under the ACA; 10. enjoin Defendants from incentivizing Navigators to advertise non-ACA compliant plans; 11. order Defendants to lengthen the open enrollment period; 12. order Defendants to resume participation in enrollment events and other outreach activities under the ACA; 13. order Defendants to faithfully enforce the individual mandate as prescribed in the ACA (as amended); 14. order Defendants to process states’ waiver applications under the ACA so as to faithfully implement the Act; 15. enjoin Defendants from implementing Executive Order No. 13,813 so as to undermine, rather than faithfully execute, the ACA; 16. award Plaintiffs their costs, attorneys’ fees, and other disbursements for this action; and
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17. grant any other relief this Court deems appropriate.

Dated: Aug. 2, 2018

Respectfully submitted,

City of Columbus Zach Klein (OH Bar No. 0078222) City Attorney

Javier M. Guzman (D.C. Bar No. 462679) (pro hac vice motion forthcoming)
Legal Director

Lara N. Baker-Morrish (OH Bar No. 0063721) City Solicitor General
Charles P. Campisano (OH Bar No. 0095201) Jennifer L. Shea (OH Bar No. 0085239) Assistant City Attorneys
Columbus City Attorney’s Office 77 N. Front St., 4th Floor Columbus, OH 43215 (614) 645-7385 zmklein@columbus.gov lnbaker-morrish@columbus.gov cpcampisano@columbus.gov jlshea@columbus.gov

Adam Grogg (D.C. Bar No. 1552438) (pro hac vice motion forthcoming)
Senior Counsel
John Lewis (D.C. Bar No. 1033826) (pro hac vice motion forthcoming)
Counsel
Democracy Forward Foundation 1333 H St. NW Washington, DC 20005 (202) 448-9090 jguzman@democracyforward.org agrogg@democracyforward.org jlewis@democracyforward.org

Mayor and City Council of Baltimore Andre M. Davis #00362 City Solicitor
Suzanne Sangree #26130 Senior Counsel for Public Safety & Director of Affirmative Litigation

/s/ Sara E. Kropf Sara E. Kropf (D. Md. Bar No. 26818) Law Office of Sara Kropf, PLLC 701 8th St. NW, Suite 300 Washington, DC 20001 (202) 627-6900 sara@kropf-law.com

Elizabeth R. Martinez #29394 Assistant Solicitor, Litigation

Counsel for Plaintiffs

City of Baltimore Department of Law City Hall, Room 109 100 N. Holliday St. Baltimore, MD 21202 (443) 388-2190 andre.davis@baltimorecity.gov suzanne.sangree2@baltimorecity.gov liz.martinez@baltimorecity.gov

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City of Cincinnati Paula Boggs Muething (OH Bar No. 0080018) City Solicitor Office of the City Solicitor, Cincinnati City Hall, Room 214 801 Plum St. Cincinnati, OH 45202 City of Chicago Edward N. Siskel (IL Bar No. 6279423) Corporation Counsel Jane Elinor Notz (IL Bar No. 6270361) Deputy Corporation Counsel Affirmative Litigation Division Stephen J. Kane (IL Bar No. 6272490) Assistant Corporation Counsel Affirmative Litigation Division City of Chicago Department of Law 121 N. LaSalle St., Room 600 Chicago, IL 60602 edward.siskel@cityofchicago.org
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 Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 1 of 148

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

CITY OF COLUMBUS 90 W. Broad St. Columbus, OH 43215;
MAYOR AND CITY COUNCIL OF BALTIMORE
100 N. Holliday St., Suite 101 Baltimore, MD 21202;
CITY OF CINCINNATI City Hall, Room 214 801 Plum St. Cincinnati, OH 45202;
CITY OF CHICAGO 121 N. Lasalle St., Room 600 Chicago, IL 60602;
CITY OF PHILADELPHIA 1515 Arch St., 17th Floor Philadelphia, PA 19102;
STEPHEN VONDRA c/o Democracy Forward Foundation 1333 H St. NW Washington, DC 20005; and
BONNIE MORGAN c/o Democracy Forward Foundation 1333 H St. NW Washington, DC 20005;
Plaintiffs,
vs.
DONALD J. TRUMP, in his official capacity as President of the United States of America,
1600 Pennsylvania Ave. NW Washington, DC 20500;

Case No. 18-cv-2364

Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 2 of 148
ALEX M. AZAR, II, in his official capacity as Secretary of the United States Department of Health and Human Services,
200 Independence Ave. SW Washington, DC 20201;
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
200 Independence Ave. SW Washington, DC 20201;
SEEMA VERMA, in her official capacity as Administrator of the Centers for Medicare and Medicaid Services,
7500 Security Blvd. Baltimore, MD 21244; and the
CENTERS FOR MEDICARE AND MEDICAID SERVICES
7500 Security Blvd. Baltimore, MD 21244,
Defendants.
AMENDED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 3 of 148
TABLE OF CONTENTS
NATURE OF THE ACTION ......................................................................................................... 4 JURISDICTION AND VENUE ..................................................................................................... 7 PARTIES ........................................................................................................................................ 7 FACTS .......................................................................................................................................... 10
I. The Individual Health Insurance Markets and the Affordable Care Act .............. 10 II. The Administration’s Intent to Repeal the ACA, With or Without Congress ...... 18 DEFENDANTS’ EXECUTIVE ACTIONS TO SABOTAGE THE AFFORDABLE CARE ACT............................................................................................................................................... 30 I. The 2019 Rule....................................................................................................... 30
Eliminating Protections that the ACA Guarantees ................................... 30 1. Permitting Exchanges to Strip Individuals of Eligibility for Tax
Credits Without Providing Direct Notification............................. 31 2. Outsourcing to States the Compliance Review of Insurance
Plans to be Offered on Federal Exchanges ................................... 33 3. Reducing Oversight of Insurance Brokers Participating in
Direct Enrollment.......................................................................... 36 Deterring Americans from Enrolling in Quality Health Insurance Plans . 38 1. Making It Harder to Compare Insurance Plans............................. 38 2. Undermining the Navigator Program............................................ 41 3. Making Small Business Exchanges Less User-Friendly .............. 44 4. Imposing Unnecessary Income Verification Requirements ......... 45 Driving Up Costs ...................................................................................... 47 1. Curtailing Review of Insurance Rate Increases ............................ 47 2. Reducing Rebates for Poor Insurer Performance.......................... 50 II. Additional Executive Actions Demonstrating Defendants’ Violation of Their Constitutional Duty to Faithfully Execute the ACA............................................. 52 Directing Agencies to Sabotage the Act ................................................... 53 Attempting to Destabilize the Exchanges ................................................. 55 1. Promoting Bare-Bones Plans to Try to Weaken ACA
Exchanges ..................................................................................... 58 2. Undermining the Individual Mandate ........................................... 62 3. Refusing to Grant State Waiver Requests that Would Further
the ACA’s Goals ........................................................................... 66

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4. Enabling and Encouraging States to Seek Waivers that Would Undercut the ACA’s Goals ........................................................... 68
5. Attempting to Weaken Public Confidence in ACA Exchanges.... 69 Working to Decrease Enrollment.............................................................. 72 1. Shortening Open Enrollment ........................................................ 73 2. Cutting Funding for Advertising and Refusing to Publicize
Open Enrollment ........................................................................... 76 3. Cutting Funding for Navigators and Encouraging Them to
Undermine the Act ........................................................................ 82 4. Failing to Set Numeric Enrollment Targets for 2018 and 2019.... 88 5. Refusing to Participate in Enrollment Events and Other
Outreach ........................................................................................ 89 Arbitrarily Driving Up Premiums ............................................................. 90 Refusing to Defend the Act....................................................................... 92 DEFENDANTS’ UNLAWFUL ACTIONS ARE HARMING PLAINTIFFS ............................. 94 I. Defendants’ Unlawful Actions Are Causing Premiums to Rise and the Rate of the Uninsured to Increase...................................................................................... 94 II. Defendants’ Unlawful Actions Harm the City Plaintiffs by Forcing Them to Spend More on Uncompensated Care................................................................. 103 Columbus, Ohio ...................................................................................... 109 Baltimore, Maryland ............................................................................... 114 Cincinnati, Ohio ...................................................................................... 119 Chicago, Illinois ...................................................................................... 122 Philadelphia, Pennsylvania ..................................................................... 126 III. Defendants’ Unlawful Actions Harm the Individual Plaintiffs by Making Insurance Coverage Harder and More Expensive to Procure ............................. 131 CLAIMS FOR RELIEF .............................................................................................................. 137 Count One (Violation of the Administrative Procedure Act) ......................................... 137 Count Two (Violation of the Take Care Clause) ............................................................ 139 PRAYER FOR RELIEF ............................................................................................................. 139
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Plaintiffs the City of Columbus, Ohio, the Mayor and City Council of Baltimore, Maryland, the City of Cincinnati, Ohio, the City of Chicago, Illinois, the City of Philadelphia, Pennsylvania, Stephen Vondra, and Bonnie Morgan hereby sue Defendants Donald J. Trump, in his official capacity as President of the United States of America, Alex M. Azar, II, in his official capacity as Secretary of the United States Department of Health and Human Services, the United States Department of Health and Human Services, Seema Verma, in her official capacity as Administrator of the Centers for Medicare and Medicaid Services, and the Centers for Medicare and Medicaid Services, and allege as follows:
1. Having failed to persuade Congress to repeal the Affordable Care Act, President Trump and his Administration are waging a relentless campaign to sabotage and, ultimately, to nullify the law. President Trump has repeatedly admitted as much: because Congress rejected his demand to have “Obamacare repealed,” he has said, he decided “to go a different route” and “end[] Obamacare” through his own actions. To that end, President Trump and his Administration are deliberately trying to make the Act fail. They are discouraging Americans from enrolling in comprehensive plans that protect against debilitating medical expenses. They are working to raise prices and reduce choices for Americans seeking insurance in the Act’s exchanges. And they are misappropriating funds Congress allocated to support the Act, instead using those funds to attack it. The Trump Administration’s strategy: to deceptively shift the blame from their own actions to the Act itself. Their objective: to pressure Congress to repeal the Act or, if that fails, to achieve de facto repeal through executive action alone. The Administration’s actions are unlawful.
2. The scope of this Amended Complaint is testament to the breadth and persistence of the Trump Administration’s efforts to undermine the Affordable Care Act (“ACA”). As

Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 6 of 148
Plaintiffs—individuals and cities representing around 6 million Americans—allege in detail below, the Administration has tried to prevent families from obtaining health insurance through the ACA’s exchanges by, for example:
 promoting insurance that does not comply with the ACA’s requirements, including insurance that does not cover preexisting conditions;
 slashing funding for outreach strategies that have been proven to encourage individuals, and healthy individuals in particular, to sign up for coverage;
 misusing federal funds for advertising campaigns aimed at smearing the ACA and its exchanges, and spinning false narratives about the efficacy and success of the Act;
 providing individuals and families with less time to choose a plan that is appropriate for them; and
 imposing unnecessary and onerous documentation requirements, making enrollment even harder.
In addition, the Administration has worked to increase premiums for ACA-compliant insurance by, for example, shirking oversight of insurance rate increases and reducing rebates owed to consumers when insurers underperform. Finally, the Administration has attempted to make affordable, high-quality health insurance unavailable by sowing uncertainty in insurance markets, causing insurers to raise rates or exit markets altogether.
3. President Trump and his Administration have been remarkably transparent about their intent and their approach. “If we don’t get it done” in Congress, President Trump has said, “we are going to watch Obamacare go down the tubes, and we’ll blame the Democrats . . . [a]nd at some point, they are going to come and say, ‘You’ve got to help us.’” “[W]e are getting rid of Obamacare,” President Trump has boasted, “essentially, we have gotten rid of it,” “[i]t’s dead[,] [i]t’s essentially dead,” “there is no Obamacare, it’s dead.” Of course, as a matter of constitutional law, the Affordable Care Act has not been repealed; as a matter of fact, it is not dead, and indeed it has proven more resilient than the Administration might have hoped. But the
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Administration’s death-by-a-thousand-cuts campaign to undermine the Act via executive action alone has taken a toll.
4. All Americans are, quite literally, paying the price. The Trump Administration’s actions are driving insurers out of ACA exchanges, raising premiums, and increasing the population of underinsured and uninsured individuals. Defendants’ actions are therefore imposing significant costs on families and governments nationwide, including Plaintiffs in this case. Specifically, the Trump Administration’s actions force the cities of Columbus, Ohio, Baltimore, Maryland, Cincinnati, Ohio, Chicago, Illinois, and Philadelphia, Pennsylvania, to spend more on uncompensated care for their residents. The Trump Administration’s actions force Steve Vondra and Bonnie Morgan to pay more for the quality health insurance coverage they need—insurance that, for example, covers Steve’s preexisting condition. That is the precise opposite of what Congress intended the ACA to achieve. Congress passed the ACA to make comprehensive health insurance more affordable and to reduce the costs of uncompensated care. The ACA was achieving those aims before the Trump Administration came to power.
5. The Trump Administration’s actions are also an affront to the rule of law: to our constitutional system, under which Congress enacts laws and the President faithfully implements them. The Administration’s actions raise questions that go to the heart of our structure of government: whether the executive branch must “take care that the laws be faithfully executed,” U.S. Const. art. II, § 3, and whether the Constitution therefore prohibits the President and his appointees from wielding executive power to destroy a duly-enacted law. The Administration’s actions violate the Take Care Clause and the Administrative Procedure Act. They should be declared unlawful and set aside.
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NATURE OF THE ACTION 6. In 2010, the 111th Congress passed, and President Barack Obama signed into law, the Patient Protection and Affordable Care Act.1 In so doing, Congress and the President enacted the ACA into law pursuant to the “single, finely wrought and exhaustively considered[] procedure” set forth in the Constitution. INS v. Chadha, 462 U.S. 919, 951 (1983) (citing U.S. Const. art. I, §§ 1, 7). Under the Constitution, the ACA remains law unless Congress and the President revise or repeal it by that same procedure. Until then, President Trump and his Administration must “take care that the law[] be faithfully executed.” U.S. Const. art. II, § 3. 7. Defendants have not only neglected this obligation: they have defied it. Having campaigned on a promise to secure the ACA’s repeal but having failed to convince Congress to take that step, President Trump has turned to executive action alone to try to sabotage the law. Whereas the ACA is “designed to expand coverage in the individual health insurance market,” King v. Burwell, 135 S. Ct. 2480, 2485 (2015) (emphasis added), Defendants—by regulation, executive order, and otherwise—are obstructing individuals’ access to that market, purposefully attempting to destabilize it, laboring to increase insurance premiums and decrease enrollment, and using resources that Congress has provided to support the law in their blatant attempts to undermine it. 8. The executive actions challenged here have been undertaken to thwart the ACA’s goals and try to make the law fail. They are therefore “incompatible with the expressed . . . will of Congress,” such that the Executive’s “power is at its lowest ebb” and judicial scrutiny is at its
1 See Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended, Health Care Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010). The Affordable Care Act is also known as “Obamacare.”
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most strict, “for what is at stake is the equilibrium established by our constitutional system.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 637-38 (1952) (Jackson, J., concurring). President Trump may well believe, as he has repeatedly stated, that “[t]he best thing politically is to let [the ACA] explode.”2 But in acting on that intention—by neglecting to faithfully implement the ACA and affirmatively taking numerous executive actions to sabotage it— President Trump and his Administration have violated the Administrative Procedure Act, 5 U.S.C. § 706, and the Take Care Clause, U.S. Const. art. II, § 3.
9. At issue here are a final rule and a long list, ever-growing, of other executive actions, all undertaken by the Trump Administration to undermine the ACA.
10. The final rule is the Centers for Medicare & Medicaid Service’s Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (April 17, 2018), referenced here as the “2019 Rule” as it governs many aspects of ACA insurance markets starting in the 2019 plan year. The 2019 Rule implements a number of changes, detailed below, that increase the cost of health coverage and impose other barriers to enrollment. These changes lack adequate justification and, in some instances, violate the Affordable Care Act’s text; they are therefore “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U.S.C. § 706(2)(A), and must be “[held] unlawful and set aside,” id. § 706(2).
11. The 2019 Rule’s unlawful changes are also evidence of Defendants’ failure to comply with their duty under the Constitution to “take care that the [Affordable Care Act] be faithfully executed.” U.S. Const. art. II, § 3.
2 Amy Goldstein & Juliet Eilperin, Affordable Care Act Remains ‘Law of the Land,’ but Trump Vows to Explode It, Washington Post, Mar. 24, 2017, https://www.washingtonpost.com/national/health-science/affordable-care-act-remains-law-ofthe-land-but-trump-vows-to-explode-it/2017/03/24/4b7a2530-10c3-11e7-ab0707d9f521f6b5_story.html.
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12. The 2019 Rule does not stand alone. A slew of executive actions, starting with the very first executive order President Trump issued on the day of his inauguration and continuing through the present, further confirms Defendants’ failure to heed the obligations that the Take Care Clause imposes. Unquestionably, “[t]he Constitution does not confer upon [the President] any power to enact laws or to suspend or repeal such as the Congress enacts.” United States v. Midwest Oil Co., 236 U.S. 459, 505 (1915). Rather, “[u]nder our system of government, Congress makes laws and the President, acting at times through agencies . . . ‘faithfully execute[s]’ them.” Util. Air Regulatory Grp. v. Envtl. Prot. Agency, 134 S. Ct. 2427, 2446 (2014) (quoting U.S. Const. art. II, § 3) (final alteration in original).3 That principle, embodied in the Take Care Clause, is as fundamental as it is longstanding. Just as courts “cannot interpret federal statutes to negate their own stated purposes,” King, 135 S. Ct. at 2493, the President cannot “implement” a federal statute in ways designed to destroy it. This is precisely what President Trump and his Administration are doing. By actively and avowedly wielding executive authority to sabotage the ACA, Defendants are not acting in good faith; instead, they have usurped Congress’s lawmaking function, and they are violating the Constitution.
13. This Court must intervene. For the reasons set forth below, this Court should declare that Defendants have violated the Administrative Procedure Act and failed to fulfill their constitutional duty to faithfully execute the Affordable Care Act, enjoin Defendants’ attempts to
3 See Brief for the Cato Institute, Professor Randy E. Barnett, and Professor Jeremy Rabkin as Amici Curiae Supporting Respondents at 10, United States v. Texas, 136 S. Ct. 2271 (2016) (No. 15-674), https://object.cato.org/sites/cato.org/files/pubs/pdf/texas-v-us-sup-ct-final-2.pdf (“It bears emphasis how strong the language of the Take Care Clause is. It is pitched at the highest register of constitutional obligation. The president shall—not may. He shall take care—not merely attempt. He shall take care that the laws be executed—not merely obeyed. And he shall take care that they are executed faithfully. No other constitutional provision mandates that any branch execute a power in a specific manner. Yet the Constitution mandates that the president execute the laws in a specific way: faithfully.”).
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undermine the ACA, and order them to implement the Act so as to expand, rather than limit, access to quality health insurance.
JURISDICTION AND VENUE 14. This Court has jurisdiction pursuant to 28 U.S.C. § 1331. Plaintiffs’ claim challenging the 2019 Rule is reviewable under the Administrative Procedure Act, 5 U.S.C. §§ 702, 704, 706. As to Plaintiffs’ claim under the Take Care Clause, this Court has authority to issue “equitable relief . . . ‘[to] prevent[] entities from acting unconstitutionally.’” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 491 n.2 (2010) (quoting Correctional Servs. Corp. v. Malesko, 534 U.S. 61, 74 (2001)). 15. Venue is proper in this judicial district under 28 U.S.C. § 1391(e)(1)(A) because Defendants are agencies and officers of the United States and Defendant the Centers for Medicare and Medicaid Services is headquartered in Baltimore, Maryland.
PARTIES 16. Plaintiff the City of Columbus, Ohio, is a municipal corporation organized under Ohio law. See Ohio Const. art. XVIII. Columbus has all the powers of local self-government and home rule under the constitution and laws of the state of Ohio, which are exercised in the manner prescribed by the Charter of the City of Columbus.4 17. Columbus, located in Franklin County, is the capital of Ohio. It is the largest city in the state and the fourteenth largest city in the United States, with a population of around 880,000, according to 2017 Census estimates. Columbus provides a wide range of services on behalf of its residents, including health services for families and children, public health, public assistance, and emergency medical care.
4 See City Code and Charter, City of Columbus, https://www.columbus.gov/council/HelpfulLinks/City-Code-and-Charter; O.R.C. § 715.01.
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18. Plaintiff the Mayor and City Council of Baltimore (“Baltimore”) is a municipal corporation, organized pursuant to Articles XI and XI-A of the Maryland Constitution, and entrusted with all of the powers of local self-government and home rule afforded by those articles.
19. Baltimore is the largest city in Maryland and the thirtieth largest city in the United States, with a population of around 617,000, according to 2017 Census estimates. The Baltimore City Department of Health is a city agency that has wide-ranging responsibilities for providing health services to residents of the city.5
20. Plaintiff the City of Cincinnati, Ohio, is a municipal corporation organized under Ohio law. See Ohio Const. art. XVIII. Cincinnati has all the powers of local self-government and home rule under the constitution and laws of the state of Ohio, which are exercised in the manner prescribed by the Charter of the City of Cincinnati.6
21. Cincinnati, located in Hamilton County, is the third largest city in Ohio and the sixty-fifth largest city in the United States, with a population of around 300,000, according to 2017 Census estimates. Like Columbus, Cincinnati provides a wide range of services on behalf of its residents, including health services for city residents, public health, public assistance, and emergency medical care.
22. Plaintiff the City of Chicago, Illinois, is a municipal corporation and home-rule unit organized and existing under the constitution and laws of the State of Illinois. See Illinois Const. art. VII.
5 See Baltimore City Charter art. VII, §§ 54-56, http://ca.baltimorecity.gov/codes/01%20%20Charter.pdf. 6 See Municipal Code, City of Cincinnati, https://www.cincinnati-oh.gov/council/referencesresources/municipal-code/; O.R.C. § 715.01.
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23. Chicago, located in Cook County, is the largest city in Illinois and the third largest city in the United States, with a population of over 2.7 million, according to 2017 Census estimates. Chicago provides a wide range of services on behalf of its residents, including health services, public assistance, and emergency medical care.
24. Plaintiff the City of Philadelphia is a municipal corporation organized pursuant to the laws of the Commonwealth of Pennsylvania. The City is a political subdivision of the Commonwealth with powers derived from the Pennsylvania Constitution, Commonwealth law, and the City’s Home Rule Charter.
25. Philadelphia, located in Philadelphia County, is the largest city in Pennsylvania and the sixth largest city in the United States, with a population of around 1.6 million, according to 2017 Census estimates. Like the other City Plaintiffs, Philadelphia provides a wide range of services on behalf of its residents, including health services, public assistance, and emergency medical care.
26. Plaintiffs Steve Vondra and Bonnie Madison are a married couple who reside in Charlottesville, Virginia, and who purchase their health insurance on Virginia’s ACA exchange.
27. Defendant Donald J. Trump is sued in his official capacity as President of the United States of America.
28. Defendant Alex M. Azar, II, is sued in his official capacity as Secretary of the United States Department of Health and Human Services.
29. Defendant the United States Department of Health and Human Services (“HHS”) is a federal agency headquartered in Washington, D.C., at 200 Independence Ave. SW, Washington, DC, 20201.
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30. Defendant Seema Verma is sued in her official capacity as Administrator of the
Centers for Medicare and Medicaid Services.
31. Defendant the Centers for Medicare and Medicaid Services (“CMS”) is a
component of Defendant HHS and is headquartered in Baltimore, Maryland, at 7500 Security
Boulevard, Baltimore, MD, 21244.
FACTS I. The Individual Health Insurance Markets and the Affordable Care Act
32. Individual health insurance is insurance that individuals purchase themselves, in
contrast to, for example, joining employer-sponsored group health plans. Prior to the enactment
of the ACA, individual health insurance markets were dysfunctional:
One reason was that premiums for these policies were increasing more than 10% a year, on average, while the policies themselves had major deficiencies. They often excluded pre-existing conditions, charged higher premiums for people with health risks and for young women, placed limits on annual and lifetime benefits, or refused to renew policies for individuals who became sick. Many people who tried to buy plans were turned down. In 2010, an estimated 9 million adults who had tried to buy a plan in the individual market over the prior three years reported that they were turned down, charged a higher price, or had a condition excluded from their plan because of their health. Faced with unsubsidized premiums and flawed products, the majority of consumers who tried to buy a plan remained uninsured. Only healthy people could get policies, and only those with good incomes could afford the premiums.7
33. As the Supreme Court has explained, many state efforts to reform the individual
health insurance market in the 1990s were unsuccessful. King, 135 S. Ct. at 2485-86. The ACA
“grew out of [this] long history of failed health insurance reform,” id. at 2485, and aims to
7 David Blumenthal & Sara Collins, Where Both the ACA and AHCA Fall Short, and What the Health Insurance Market Really Needs, Harvard Business Review, Mar. 21, 2017, https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-thehealth-insurance-market-really-needs [hereinafter Blumenthal & Collins].
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achieve systemic improvements in the individual health insurance market by means of certain key reforms, including:
a. Nondiscrimination on the basis of health status and health history. The ACA requires “each health insurance issuer that offers health insurance coverage in the individual . . . market in a State [to] accept every . . . individual in the State that applies for such coverage,” 42 U.S.C. § 300gg-1(a), and bars insurers from charging higher premiums on the basis of a person’s health, id. § 300gg. ACA-compliant health insurance therefore covers preexisting conditions; it does not discriminate on the basis of an individual’s health status and health history. See id. § 300gg-4.
b. Essential health benefits. Insurance for individuals and families sold on ACA exchanges must cover “essential health benefits,” id. § 300gg-6(a), including hospitalization, prescription drugs, emergency services, ambulatory patient services, maternity and newborn care, mental health and substance use disorder services, preventive and wellness services, and pediatric services including oral and vision care, see id. § 18022(b)(1). In addition, to protect patients from being confronted with devastating costs when a medical condition exhausts their health coverage, the ACA limits so-called “cost-sharing”—for example, deductibles and copayments—for essential health benefits coverage, and prohibits plans from imposing annual or lifetime limits on such coverage. See id. §§ 300gg6(b), 18022(a)(2), (c).
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c. Subsidized coverage. The ACA “seeks to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line.” King, 135 S. Ct. at 2487 (citing 26 U.S.C. § 36B; 42 U.S.C. §§ 18081, 18082). Financial assistance comes through income-related, premium-based tax credits—known as advance premium tax credits, or “APTCs”—for qualified individuals. The Act also requires health insurance issuers to reduce certain individuals’ cost-sharing expenditures and directs HHS to reimburse issuers for such cost-sharing reductions (“CSRs”). See 18 U.S.C. § 18071.
34. In addition, as enacted, the ACA required individuals to maintain health insurance coverage or make a shared responsibility payment to the Internal Revenue Service. 26 U.S.C. § 5000A. As a result of congressional action in 2017, starting after December 31, 2018, the shared responsibility payment was reduced to $0.8 Although it was initially believed that the shared responsibility payment was essential for maintaining the stability of health insurance markets, experience from the ACA’s implementation has indicated that the elimination of the payment will increase premiums for unsubsidized enrollees by 10 percent for 2019 but will not destabilize markets.9
8 Budget Fiscal Year, 2018, Pub. L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (2017) (codified at 26 U.S.C. §§ 5000A, 5000A note). 9 Congressional Budget Office, Repealing the Individual Health Insurance Mandate: An Updated Estimate 1 (Nov. 2017), https://www.cbo.gov/system/files?file=115th-congress-20172018/reports/53300-individualmandate.pdf; Congressional Budget Office, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018 to 2028 at 2 (May 2018), https://www.cbo.gov/system/files?file=2018-06/53826-healthinsurancecoverage.pdf [hereinafter May 2018 CBO Report].
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35. To facilitate individuals’ ability to learn about and enroll in the health insurance options that are available to them, the ACA “requires the creation of an ‘Exchange’ in each State where people can shop for insurance, usually online.” King, 135 S. Ct. at 2487 (quoting 42 U.S.C. § 18031(b)(1)). These exchanges, also known as health insurance marketplaces, enable people not eligible for Medicare or Medicaid to obtain adequate, affordable private insurance independent of their jobs. The exchanges remedy a problem that had long bedeviled individual health insurance markets: individuals’ inability to intelligently compare different plans in terms of price and quality. For ease of comparison, the ACA differentiates plans along four standard metallic tiers—Bronze, Silver, Gold, and Platinum, from least to most generous—according to how they apportion costs between individuals and issuers. 42 U.S.C. § 18022(d).10 Thus, as the Supreme Court has summarized, an exchange in each state serves as “a marketplace that allows people to compare and purchase” ACA-compliant insurance plans, King, 135 S. Ct. at 2485, known as “qualified health plans” or “QHPs” under the Act, 42 U.S.C. § 18031(b)(1); see id. § 18021(a).
36. Individuals may enroll in qualified health plans on an exchange during a specified annual open enrollment period or, if they qualify on the basis of certain life events—such as getting married, having a baby, or losing other health coverage—they may enroll during a special enrollment period. Id. § 18031(c)(6).11
10 See Health Plan Categories, HealthCare.gov, https://www.healthcare.gov/glossary/healthplan-categories/. 11 See Open Enrollment Period, HealthCare.gov, https://www.healthcare.gov/glossary/openenrollment-period/. The exchanges also offer small businesses a way to find qualified health plans on a platform called the Small Business Health Options Program or “SHOP.” See 42 U.S.C. § 18031(b)(1)(B).
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37. ACA exchanges also help consumers make smart health insurance choices by running call centers and providing in-person assistance. For example, the ACA requires that exchanges award grants to healthcare “Navigators” to “carry out . . . duties” that are specified by statute, id. § 18031(i)(1); see id. § 18031(i)(3), and in HHS implementing regulations, see 45 C.F.R. §§ 155.210, 155.215. By law, Navigators’ essential responsibilities include maintaining a current understanding of available health insurance options, conducting public education and awareness campaigns, helping consumers understand their choices, facilitating consumer health insurance decisions, and ensuring access to consumer protections.
38. An exchange may be established by the state in which it operates or, in states that elect not to establish exchanges, by the federal government. See King, 135 S. Ct. at 2487 (citing 42 U.S.C. §§ 18031(b)(1), 18041(c)(1)); 45 C.F.R. § 155.105(f)). As of 2018, twelve states operated their “state-based exchanges” or “SBEs” (operating their own websites rather than using the federally-run HealthCare.gov), twenty-eight states relied entirely on the federal government to run their “federally-facilitated exchanges” or “FFEs” using HealthCare.gov, and eleven states had hybrid exchanges that assume some, but not all, exchange functions.12 As relevant here, the exchanges in Ohio and Pennsylvania are FFEs, the exchange in Maryland is an SBE, and the exchange in Illinois is a hybrid exchange.
39. The ACA requires that exchanges offer only quality health insurance: insurance that covers preexisting conditions, for example, and that does not impose annual or lifetime
12 State Health Insurance Marketplace Types, 2018, Kaiser Family Foundation, https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/; see HHS, Cooperative Agreement to Support Navigators in Federally-facilitated Exchanges: Notice of Funding Opportunity 89 (July 10, 2018), https://www.grantsolutions.gov/gs/preaward/previewPublicAnnouncement.do?id=62537 (click “View PDF”) (listing states that will have an FFE for plan year 2019).
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dollar limits on core coverage. Such coverage has been found to improve access to care and overall health, and to reduce financial burdens for both individuals and institutions that cover the costs of uncompensated care. But increasing enrollment in quality health insurance coverage is not only the ACA’s immediate goal; it is also key to the Act’s long-term success. “Achieving insurance market stability over time . . . requires robust enrollment.”13 Specifically, “[a]t the overall market level, enrollment must be high enough to reduce random fluctuations in claims from year to year.”14 In addition, “[b]ecause the ACA prohibits health plans from denying coverage or charging higher premiums based on preexisting health conditions, having affordable premiums depends on enrolling enough healthy individuals over which the costs of the lesshealthy individuals can be spread. Enrollment of only individuals with high health care needs . . . can produce unsustainable upward premium spirals.”15
40. Limiting the cost of health insurance is, in turn, essential to promoting increased enrollment. The Centers for Medicare and Medicaid Services has found that “cost is the top reason cited” for individuals ending their coverage.16 To that end, the ACA and its implementing regulations aim to drive costs down specifically for coverage available on the exchanges, spurring further enrollment and ensuring that health insurance markets function smoothly.
13 Blumenthal & Collins, supra n.7. 14 American Academy of Actuaries, An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes 5 (Jan. 2017), https://www.actuary.org/files/publications/Acad_eval_indiv_mkt_011817.pdf. 15 Id. 16 Press Release, CMS, High Costs, Lack of Affordability Most Common Factors that Lead Consumers to Cancel Health Insurance Coverage (June 12, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releasesitems/2017-06-12.html.
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41. When faithfully implemented, the ACA’s reforms successfully met Congress’s
goal of enabling more individuals—specifically, 20 million more individuals17—to enroll in
health insurance coverage. Indeed, the number of uninsured nonelderly Americans had decreased
from 44 million in 2013 (the year before the ACA’s major coverage provisions went into effect)
to around 28 million by the end of 2016.18 The uninsured rate had dropped across all
demographic groups; individuals with low and moderate incomes, young people, and those who
live in rural areas have experienced particularly dramatic coverage gains.19 In addition, the
Congressional Budget Office has concluded that under the ACA—assuming it is implemented
faithfully—the market for individual health insurance “would probably be stable in most
areas.”20
17 Namrata Uberio et al., Health Insurance Coverage and the Affordable Care Act, 2010-2016 at 8, HHS (March 3, 2016), https://aspe.hhs.gov/system/files/pdf/187551/ACA2010-2016.pdf. 18 See Key Facts About the Uninsured Population, Kaiser Family Foundation (Nov. 29, 2017), https://www.kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/ [hereinafter KFF Key Facts]; Robin A. Cohen et al., Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2016 at 2, National Center for Health Statistics (May 2017), https://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201705.pdf. 19 See Bowen Garret & Anuj Gangopadhyaya, Who Gained Health Insurance Coverage Under the ACA, and Where Do They Live?, Urban Institute (Dec. 2016), https://www.urban.org/sites/default/files/publication/86761/2001041-who-gained-healthinsurance-coverage-under-the-aca-and-where-do-they-live.pdf; Sara R. Collins et al., How the Affordable Care Act Has Improved Americans’ Ability to Buy Health Insurance on Their Own, Commonwealth Fund (Feb. 1, 2017), http://www.commonwealthfund.org/publications/issuebriefs/2017/feb/how-the-aca-has-improved-ability-to-buy-insurance; Kevin Quealy & Margot Sanger-Katz, Obama’s Health Law: Who Was Helped Most, New York Times, Oct. 29, 2014, https://www.nytimes.com/interactive/2014/10/29/upshot/obamacare-who-was-helped-most.html. 20 Congressional Budget Office, Congressional Budget Office Cost Estimate: American Health Care Act (Mar. 13, 2017), https://www.cbo.gov/system/files/115th-congress-20172018/costestimate/americanhealthcareact.pdf.
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42. Several aspects of the ACA contributed to the 57 percent increase in the number of people covered in the individual market (on and off exchanges) between 2013 and 2016.21
Overall, an estimated 40 percent of the coverage gain attributable to the ACA resulted from the exchanges’ policies.22 In addition, the ACA set up the exchanges to encourage competition
among insurers, both to keep premiums low and to improve customer service. To that end, it
significantly standardized benefits and cost-sharing to facilitate shopping on price, required that
the exchanges create tools to allow consumers to compare plans, and established a permanent
risk-adjustment program to prevent insurers from profiting by disproportionately enrolling
people with lower-than-average health care costs.
43. The results were clear: the unsubsidized cost of coverage in the exchanges, before
the start of the Trump Administration, was 10 percent lower than the average employersponsored insurance premium.23 In the early years after the exchanges opened, some insurers set
prices so low that they lost money in order to gain market share; others did not fully understand
the risks of their new customers. In 2017, they raised premiums to correct those mistakes. After
the 2017 price corrections, expert analyses indicated that premiums would have grown in single digits for 2018 but for Defendants’ policies, including those challenged here.24
21 Health Insurance Coverage of Nonelderly 0-64, 2013 and 2016, Kaiser Family Foundation, https://www.kff.org/other/state-indicator/nonelderly-0-64/. 22 See Molly Frean et al., Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act, 53 J. of Health Economics 72 (2016), http://www.nber.org/papers/w22213. 23 Linda J. Blumberg et al., Are Nongroup Marketplace Premiums Really High? Not in Comparison with Employer Insurance, Urban Institute (Sept. 2016), https://www.urban.org/research/publication/are-nongroup-marketplace-premiums-really-highnot-comparison-employer-insurance. 24 Matthew Fiedler, Taking Stock of Insurer Financial Performance in the Individual Health Insurance Market Through 2017, Brookings (Oct. 2017), https://www.brookings.edu/research/taking-stock-of-insurer-financial-performance-in-the-
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II. The Administration’s Intent to Repeal the ACA, With or Without Congress 44. Notwithstanding the ACA’s demonstrated successes, President Trump has
repeatedly vowed to ensure that the Act is repealed. For example, on June 15, 2015, in announcing his candidacy for the presidency, he stated, “So, just to sum up, I would do various things very quickly. I would repeal and replace the big lie, Obamacare.”25 On October 8, 2015, then-candidate Trump stated, “We’re gonna repeal Obamacare.”26 Then, on July 21, 2016, in accepting the Republican nomination for the presidency, Trump stated, “We will repeal and replace disastrous Obamacare.”27
45. Despite these promises by the President—and many, many more not catalogued here—and despite repeated attempts, Congress has declined to pass a bill repealing the Affordable Care Act.
46. President Trump has repeatedly admitted that three key elements of his strategy to convince Congress to repeal the ACA are asserting—falsely—that the law is failing, undermining the ACA by neglect, and sabotaging the ACA with affirmative executive actions:
individual-health-insurance-market-through-2017/; Mark A. Hall & Michael J. Cue, Health Insurance Markets Perform Better in States That Run Their Own Marketplaces, To the Point (March 7, 2018), https://www.commonwealthfund.org/blog/2018/health-insurance-marketsperform-better-states-run-their-own-marketplaces. 25 Here’s Donald Trump’s Presidential Announcement Speech, Time (June 16, 2015) http://time.com/3923128/donald-trump-announcement-speech/. 26 Presidential Candidate Donald Trump Rally in Las Vegas, C-SPAN (Oct. 8, 2015) https://www.c-span.org/video/?328645-1/presidential-candidate-donald-trump-rally-las-vegas. 27 Donald J. Trump, Republican Nomination Acceptance Speech (July 21, 2016), https://assets.donaldjtrump.com/DJT_Acceptance_Speech.pdf.
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a. On January 11, 2017, President-elect Trump stated, “[T]he easiest thing would be to let [the ACA] implode in ‘17 and believe me, we’d get pretty much whatever we wanted, but it would take a long time.”28
b. On January 25, 2017, President Trump stated, “[T]he best thing we could do is nothing for two years, let [the ACA] explode. And then we’ll go in and we’ll do a new plan and—and the Democrats will vote for it. Believe me . . . . So let it all come [due] because that’s what’s happening. It’s all coming [due] in ‘17. We’re gonna have an explosion. And to do it right, sit back, let it explode and let the Democrats come begging us to help them because it’s on them.”29
c. On January 26, 2017, President Trump stated, “If we waited two years, [the ACA is] going to explode like you’ve never seen an explosion. Nobody’s going to be able to afford it. It’s a disaster. And that’s politically what we should do . . . .”30
d. On January 26, 2017, President Trump stated, “[The ACA] actually explodes in ‘17. And I told the Republicans. I said, look, if you really want
28 Donald Trump’s News Conference: Full Transcript and Video, New York Times (Jan. 11, 2017), https://www.nytimes.com/2017/01/11/us/politics/trump-press-conference-transcript.html. 29 Transcript: ABC News Anchor David Muir Interviews President Trump, ABC News (Jan. 25, 2017), http://abcnews.go.com/Politics/transcript-abc-news-anchor-david-muir-interviewspresident/story?id=45047602. 30 Transcripts: Trump Addresses GOP Leadership at Retreat in Philadelphia, CNN (Jan. 26, 2017), http://transcripts.cnn.com/TRANSCRIPTS/1701/26/wolf.02.html.
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to do something, just let it explode, and then they’ll come begging us to fix it, OK? Begging.”31 e. On March 24, 2017, President Trump stated, “As you know, I’ve been saying for years that the best thing is to let Obamacare explode and then go make a deal with the Democrats and have one unified deal. And they will come to us, we won’t have to come to them. After Obamacare explodes . . . . Time will tell. Obamacare is in for some rough days. You understand that. It’s in for some rough, rough days. I’ll fix it as it explodes. They’re going to come to ask for help. They’re going to have to. Here’s the good news: Health care is now totally the property of the Democrats.”32 f. On March 25, 2017, President Trump tweeted, “ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!”33 g. On April 12, 2017, President Trump tied his Administration’s potential elimination of CSR payments, addressed below,34 to his overall sabotage
31 Cable Exclusive: Trump Sits Down with Sean Hannity at White House, Fox News (Jan. 26, 2017), http://www.foxnews.com/transcript/2017/01/26/cable-exclusive-president-trump-sitsdown-with-sean-hannity-at-white-house.html. 32 Robert Costa, ‘Hello, Bob’: President Trump Called My Cellphone to Say That the Healthcare Bill Was Dead, Washington Post, Mar. 24, 2017, https://www.washingtonpost.com/powerpost/president-trump-called-my-cellphone-to-say-thatthe-health-care-bill-was-dead/2017/03/24/8282c3f6-10ce-11e7-9b0d-d27c98455440_story.html. 33 @realDonaldTrump, Twitter (March 25, 2017, 10:37 AM), https://twitter.com/realDonaldTrump/status/845645916732358656. 34 See infra ¶¶ 104-08; Reed Abelson & Margot Sanger-Katz, Explaining the Health Payments That Trump Has Called ‘Ransom Money’, New York Times, Apr. 14, 2017,
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agenda, stating, “Even now, as I came in here, they’re saying payments have to be made that weren’t scheduled to be made on ObamaCare. If you don’t make them, it fails. I mean, you know, it’s just a mess. ObamaCare is a total mess.”35 h. Again referencing the possibility that his Administration would eliminate CSR payments, on April 12, 2017, President Trump stated, “that would mean that Obamacare doesn’t have enough money so it dies immediately as opposed to over a period of time. Even if it got that money, it dies, but it dies over a period of time.”36 That same day, President Trump elaborated on the theme: “Obamacare is dead next month if it doesn’t get that money . . . . What I think should happen and will happen is the Democrats will start calling me and negotiating.”37
https://www.nytimes.com/2017/04/14/upshot/explaining-the-health-payments-that-trump-isthreatening-to-end.html. 35 Aaron Blake, President Trump’s Thoroughly Confusing Fox Business Interview, Annotated, Washington Post, Apr. 12, 2017, https://www.washingtonpost.com/news/thefix/wp/2017/04/12/president-trumps-throughly-confusing-fox-business-interviewannotated/?utm_term=.64c0efc03f6a. 36 WSJ Trump Interview Excerpts: China, North Korea, Ex-Im Bank, Obamacare, Bannon, More, Wall Street Journal (Apr. 12, 2017), https://blogs.wsj.com/washwire/2017/04/12/wsjtrump-interview-excerpts-china-north-korea-ex-im-bank-obamacare-bannon/; https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-pressdemocrats-on-health-bill-1492029844. 37 Michael C. Bender et al., Trump Threatens to Withhold Payments to Insurers to Press Democrats on Health Bill, Wall Street Journal, Apr. 12, 2017, https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-pressdemocrats-on-health-bill-1492029844.
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i.

Similarly, on April 23, 2017, President Trump tweeted, “ObamaCare is in

serious trouble. The Dems need big money to keep it going - otherwise it

dies far sooner than anyone would have thought.”38

j.

On May 1, 2017, President Trump stated, “And I’ve said from day one,

the best thing I could do is let ObamaCare die and then come in with a

plan.”39

k.

On May 4, 2017, President Trump stated, “I predicted it a long time ago. I

said, [the ACA is] failing. And now, it’s obvious that it’s failing. It’s dead.

It’s essentially dead. If we don’t pay lots of ransom money over to the

insurance companies it would die immediately.”40

l.

On May 4, 2017, President Trump also pronounced that he was presiding

over the ACA’s “dea[th].”41

m. Likewise, on May 11, 2017, President Trump stated, “You know when

people say, ‘Oh, Obamacare is so wonderful,’ there is no Obamacare, it’s

dead. Plus we’re subsidising it and we don’t have to subsidise it. You

know if I ever stop wanting to pay the subsidies, which I will.”42

38 @realDonaldTrump, Twitter (Apr. 23, 2017, 7:20 AM), https://twitter.com/realDonaldTrump/status/856150719656755200.
39 Trump on North Korea: ‘Nobody’s Safe’, Fox News, May 1, 2017, http://www.foxnews.com/politics/2017/05/01/trump-on-north-korea-nobodys-safe.html.
40 Id.
41 Remarks by President Trump on Healthcare Vote in the House of Representatives, The White House (May 4, 2017), available at https://web.archive.org/web/20170504233618/https://www.whitehouse.gov/the-pressoffice/2017/05/04/remarks-president-trump-healthcare-vote-house-representatives.
42 Transcript: Interview with Donald Trump, Economist (May 11, 2017) https://www.economist.com/united-states/2017/05/11/transcript-interview-with-donald-trump.

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n. On June 12, 2017, according to the press, President Trump “stressed the need to ‘starve the beast’ of Obamacare in order to garner more public support for [a] Republican-backed [repeal] bill.”43
o. On June 28, 2017, President Trump stated, “Obamacare is dying. It’s essentially dead. If you don’t give it the subsidy, it would die within 24 hours. It’s been a headache for everybody. It’s been a nightmare for many.”44
p. On July 18, 2017, President Trump tweeted, “As I have always said, let ObamaCare fail and then come together and do a great healthcare plan.”45
q. On July 18, 2017, President Trump stated, “[L]et Obamacare fail, it will be a lot easier. And I think we’re probably in that position where we’ll let Obamacare fail. We’re not going to own it. I’m not going to own it. I can tell you the Republicans are not going to own it. We’ll let Obamacare fail and then the Democrats are going to come to us.”46
r. On July 19, 2017, President Trump stated, “If we don’t get it done, we are going to watch Obamacare go down the tubes, and we’ll blame the
43 Jake Lahut, Trump: Dems Wouldn’t Pass Healthcare Bill Even if It Was the Best in the World, Politico, June 12, 2017, http://www.politico.com/story/2017/06/12/trump-obamacarerepeal-bill-democrats-239428. 44 Remarks by President Trump and Secretary of Energy Rick Perry at Tribal, State, and Local Energy Roundtable, The White House (June 28, 2017), https://www.whitehouse.gov/the-pressoffice/2017/06/28/remarks-president-trump-and-secretary-energy-rick-perry-tribal-state-and. 45 @realDonaldTrump, Twitter (July 18, 2017, 4:58 AM), https://twitter.com/realDonaldTrump/status/887280380423938048. 46 Matthew Yglesias, Trump: ‘Let Obamacare Fail… I’m Not Going to Own It’, Vox, July 18, 2017, https://www.vox.com/2017/7/18/15990986/trump-let-obamacare-fail.
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Democrats. And at some point, they are going to come and say, ‘You’ve got to help us.’”47 47. One effort to repeal the ACA failed in the Senate in the early hours of July 28, 2017, with Sen. John McCain marking his decisive vote against repeal by a thumbs-down gesture.48 Thereafter, President Trump continued to push the false narrative that the ACA was failing. He also placed greater emphasis on the affirmative steps that he and his Administration were taking to sabotage the Act in order to provoke Congress to repeal it, or to achieve its de facto destruction: a. On July 28, 2017, shortly after the failed vote, President Trump tweeted, “3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let ObamaCare implode, then deal. Watch!”49 b. On July 28, 2017, President Trump stated, “You know, I said from the beginning, let Obamacare implode, and then do it. And I turned out to be right. Let Obamacare implode.”50 c. On October 10, 2017, in advance of issuing Executive Order No. 13,813, which directed his Administration to expand access to non-ACA compliant plans and thereby siphon consumers, especially healthy
47 Excerpts from the Times’s Interview with Trump, New York Times, July 19, 2017, https://www.nytimes.com/2017/07/19/us/politics/trump-interview-transcript.html?_r=0. 48 Robert Pear and Thomas Kaplan, Senate Rejects Slimmed-Down Obamacare Repeal as McCain Votes No, New York Times, July 28, 2017, https://www.nytimes.com/2017/07/27/us/politics/obamacare-partial-repeal-senate-republicansrevolt.html. 49 @realDonaldTrump, Twitter (July 27, 2017, 11:25 PM), https://twitter.com/realDonaldTrump/status/890820505330212864. 50 Jordan Fabian, Trump: Let ObamaCare Implode, The Hill, July 28, 2017, http://thehill.com/homenews/administration/344365-trump-let-obamacare-implode.
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consumers, away from ACA exchanges, see infra ¶¶ 109-15, President Trump tweeted, “[s]ince Congress can’t get its act together on HealthCare, I will be using the power of the pen.”51 d. On October 13, 2017, after announcing the end of cost-sharing reduction payments, see infra ¶¶ 104-08, President Trump stated, “You saw what we did yesterday with respect to health care. . . . We’re taking a little different route than we had hoped, because getting Congress—they forgot what their pledges were. . . . So we’re going a little different route. But you know what? In the end, it’s going to be just as effective, and maybe it’ll even be better.”52 e. On that same day, President Trump tweeted, “The Democrats [sic] ObamaCare is imploding. Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!”53 f. Also on October 13, 2017, President Trump tweeted, “ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”54 g. On October 14, 2017, a few months after he left the White House, Steve Bannon, one of President Trump’s key advisors, boasted that the
51 @realDonaldTrump, Twitter (Oct. 10, 2017, 3:30 AM), https://twitter.com/realDonaldTrump/status/917698839846576130. 52 President Trump Addresses Values Voter Summit, CNN (Oct. 13, 2017), http://www.cnn.com/TRANSCRIPTS/1710/13/cnr.04.html. 53 @realDonaldTrump, Twitter (Oct. 13, 2017, 2:36 AM), https://twitter.com/realDonaldTrump/status/918772522983874561. 54 @realDonaldTrump, Twitter (Oct. 13, 2017, 4:14 AM), https://twitter.com/realDonaldTrump/status/918797009133465600.
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Administration was undertaking executive action to “blow [the Act] up,”

reiterating its intent to “blow those [insurance] exchanges up.”55

h. On October 16, 2017, President Trump stated, “Obamacare is finished. It’s

dead. It’s gone. It’s no longer—you shouldn’t even mention [it]. It’s gone.

There is no such thing as Obamacare anymore.”56

i.

On October 17, 2017, President Trump stated, “Obamacare is virtually

dead. At best, you could say it’s in its final legs. The premiums are going

through the roof. The deductibles are so high that people don’t get to use

it. Obamacare is a disgrace to our nation, and we are solving the problem

of Obamacare.”57

j.

In late April 2018, at a rally in Michigan, President Trump bragged,

“Essentially, we are getting rid of Obamacare . . . . Some people would

say, essentially, we have gotten rid of it.”58

k. In signing a bill unrelated to the ACA on May 30, 2018, President Trump

stated: “For the most part, we will have gotten rid of a majority of

55 Martin Pengelly, Bannon Says Trump Will ‘Blow Up’ Obamacare as Subsidies Cut Stokes Fires, The Guardian, Oct. 15, 2017, https://www.theguardian.com/us-news/2017/oct/15/bannonindicates-trumps-aca-strategy-blow-that-thing-up (second alteration in original). 56 Remarks by President Trump in Cabinet Meeting, The White House (Oct. 16, 2017), available at https://web.archive.org/web/20171016180503/https://www.whitehouse.gov/thepress-office/2017/10/16/remarks-president-trump-cabinet-meeting. 57 Remarks by President Trump and Prime Minister Tsipras of Greece Before Bilateral Meeting, The White House (Oct. 17, 2017), available at https://web.archive.org/web/20171030160901/https://www.whitehouse.gov/the-pressoffice/2017/10/17/remarks-president-trump-and-prime-minister-tsipras-greece-bilateral. 58 Alan Rappeport, Trump Says He Got Rid of Obamacare. The I.R.S. Doesn’t Agree, New York Times, May 6, 2018, https://www.nytimes.com/2018/05/06/business/trump-obamacareirs.html.
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Obamacare.”59 He went on to confirm that his Administration’s objective

is to achieve by executive action alone what Congress has refused to do:

“Could have had it done a little bit easier, but somebody decided not to

vote for it, so it’s one of those things.”60

l.

Likewise, on June 4, 2018, President Trump tweeted: “We had Repeal &

Replace done (and the saving to our country of one trillion dollars) except

for one person”—presumably, Sen. John McCain—”but it is getting done

anyway.”61 Referencing the tax bill’s reduction of the shared responsibility

payment to $0, President Trump continued, “Individual Mandate is gone

and great, less expensive plans will be announced this month.”62

m. At a rally on June 23, 2018, according to an observer, President Trump

“mock[ed] John McCain’s ‘thumbs down’ on the Obamacare repeal” and

told audience members that “‘it doesn’t matter. We gutted it anyway.’”63

59 Remarks by President Trump at S.204 “Right to Try” Bill Signing, The White House (May 30, 2018), https://www.whitehouse.gov/briefings-statements/remarks-president-trump-s-204right-try-bill-signing/. 60 Id. 61 @realDonaldTrump, Twitter (June 4, 2018, 5:18 AM), https://twitter.com/realDonaldTrump/status/1003611857272360960. 62 Id. 63 @LauraLitvan, Twitter (June 23, 2018, 1:04 PM), https://twitter.com/LauraLitvan/status/1010614472946352128; see also Jake Sherman et al., Overheard at the DSCC Retreat on Martha’s Vineyard, Politico, June 24, 2018, https://www.politico.com/newsletters/playbook/2018/06/24/overheard-at-the-dscc-retreat-onmarthas-vineyard-281247.
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n. In that same vein, in a speech on July 23, 2018, according to an observer, President Trump stated that “Obamacare’s very rapidly fading away” and once again singled out Sen. McCain.64
o. On August 1, 2018, President Trump returned to the same theme, stating: We had Obamacare repealed and replaced, and a man—I won’t mention his name. But a man at 2 o’clock in the morning went thumbs down . . . We had the chance. . . . But still, I have just about ended Obamacare. We have great health care. We have a lot of great things happening right now. New programs are coming out. We got rid of the individual mandate. But that was very disappointing to me that night—and he did it because of me, probably. But that was very disappointing. That was a horrible thing he did to our country. And, frankly, it cost $1 trillion because we would have saved $1 trillion, on top of which we would have had good health care. But we’re doing it a different way. We have to go a different route.65
p. On October 2, 2018, President Trump referenced the ACA and stated, “We had it repealed and replaced. A little shock[] took place early in the morning. But the fact is, we didn’t get one Democrat vote. . . . But we’ve pretty much dismantled it.”66
64 @ddale8, Twitter (July 23, 2018, 3:40 PM), https://twitter.com/ddale8/status/1021480066029694978. 65 President Trump Calls the Show!, The Rush Limbaugh Show (Aug. 1, 2018), https://www.rushlimbaugh.com/daily/2018/08/01/president-trump-calls-the-show/amp/ (emphasis added). 66 Speech: Donald Trump Holds a Political Rally in Southaven, MS – October 2, 2018, Factbase, https://factba.se/transcript/donald-trump-speech-maga-rally-southaven-ms-october-22018.
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q. Finally—at least as of this filing—on November 2, 2018, President Trump boasted that his Administration is “decimating [the ACA] strike by strike;”67 “we’ve decimated Obamacare.”68
48. Statements disparaging the Affordable Care Act have also been made by other prominent members of President Trump’s Administration, including when announcing some of the very executive actions at issue here. For example, in announcing that open enrollment for the 2018 plan year would be cut in half from previous years, CMS’s press release touted, in bullet form, “[r]ecent statistics related to the Affordable Care Act” that were deliberately selected to paint a false picture of the Act as failing.69 On information and belief, CMS Administrator Seema Verma edited these bullets herself. And on a media call to explain the 2019 Rule, Ms. Verma said, “It’s clear that Obamacare continues to have negative effects on many Americans.”70 That view—mistaken, and more importantly, contrary to Congress’s judgment— permeates and drives the Administration’s campaign to undermine the ACA.
67 Speech: Donald Trump Holds a Political Rally in Huntington, West Virginia – November 2, 2018, Factbase, https://factba.se/transcript/donald-trump-speech-maga-rally-huntington-wvnovember-2-2018. 68 @Acosta, Twitter (Nov. 2, 2018, 8:19 PM), https://twitter.com/acosta/status/1058514065595777024?s=21. 69 Press Release, CMS, CMS Issues Final Rule to Increase Choices and Encourage Stability in Health Insurance Market for 2018 (Apr. 13, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releasesitems/2017-04-13-2.html. 70 Allison Inserro, CMS Creates New ACA Penalty Mandate Exemptions, Including Opposition to Abortion, AJMC, Apr. 10, 2018, https://www.ajmc.com/newsroom/cms-creates-new-acapenalty-mandate-exemptions-including-opposition-to-abortion.
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DEFENDANTS’ EXECUTIVE ACTIONS TO SABOTAGE THE AFFORDABLE CARE ACT 49. President Trump and his Administration have attempted to deliver on their repeated promises to sabotage the Affordable Care Act. The Administration knows what executive actions would faithfully implement the Act and further the Act’s objective of expanding affordable health insurance to every American.71 Yet the Administration has repeatedly refused to pursue such actions and has instead adopted policies affirmatively designed to undermine the Act. As detailed below, multiple provisions of the 2019 Rule, and many other executive actions, have the aim and effect of weakening ACA exchanges, driving up premiums, and driving out issuers, ultimately increasing the rate of the uninsured and underinsured. I. The 2019 Rule 50. In April 2018, the Centers for Medicare and Medicaid Services promulgated a final rule that undermines many of the Act’s safeguards and requirements. See Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (April 17, 2018). Specifically, many provisions of the 2019 Rule roll back protections that the Act guarantees, make it more difficult to enroll in ACA-compliant plans, and drive up the cost of ACA-compliant plans. For the reasons explained below, the enumerated provisions of the 2019 Rule violate the Administrative Procedure Act and must be set aside. Eliminating Protections that the ACA Guarantees 51. Numerous provisions of the 2019 Rule weaken or eliminate ACA protections necessary to ensure that individuals have access to quality, affordable health insurance coverage.
71 See, e.g., Letter from Andrew M. Slavitt to CMS Administrator Verma (Nov. 27, 2017), available at https://www.regulations.gov/contentStreamer?documentId=CMS-2017-01410240&attachmentNumber=1&contentType=pdf (commenting on the 2019 Rule as proposed).
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1. Permitting Exchanges to Strip Individuals of Eligibility for Tax Credits Without Providing Direct Notification
52. As noted above, many individuals who purchase health insurance through the exchanges are eligible for premium subsidies known as advance premium tax credits. The Affordable Care Act required HHS to promulgate regulations further defining APTC eligibility. 42 U.S.C. §§ 18081, 18082. Among other things, HHS regulations direct exchanges to deny APTCs to an individual if the Internal Revenue Service notifies the exchange that the individual or a member of her household did not reconcile the amount of advance premium tax credits she received with the amount of the actual premium tax credit she should have been allowed on her prior year’s tax return. See 45 C.F.R. § 155.305(f)(4) (describing process for filing a federal income tax return). This provision, known as the failure to reconcile provision, was amended in 2016 to specify that an exchange may not deny APTC under this provision “unless direct notification is first sent to the tax filer . . . that his or her eligibility will be discontinued as a result of the tax filer’s failure to comply with the requirement.” 45 C.F.R. § 155.305(f)(4)(ii) (2016) (effective Jan. 17, 2017 to June 17, 2018).
53. The 2019 Rule continues to require that exchanges deny APTCs to individuals who fail to reconcile APTCs received in a prior year on their tax return but, crucially, removes the requirement that exchanges first provide such individuals with direct notification that their eligibility will be discontinued as a result of their failure to comply with this requirement. 83 Fed. Reg. at 16,982. The 2019 Rule’s failure to reconcile provision is contrary to law and arbitrary and capricious, and therefore must be set aside.
54. The failure to reconcile provision conflicts with express statutory language requiring that any eligible individual be allowed to claim APTC. Under 26 U.S.C. § 36B, “[i]n the case of an applicable taxpayer, there shall be allowed as a credit against the tax
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imposed . . . for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.” The statute’s plain terms thus require that any applicable taxpayer be allowed to claim an APTC. The term “applicable taxpayer” means, “with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.” 26 U.S.C. § 36B(c)(1)(A). Whether an individual has reconciled her APTC has no bearing on whether she is an “applicable taxpayer” under the statute. Therefore, depriving an “applicable taxpayer” of the credit that the statute says “shall be allowed” based on a failure to reconcile his or her taxes violates the plain language of the statute.
55. In addition, CMS’s decision to remove the direct notification requirement is arbitrary and capricious. CMS attempted to justify its decision to remove the direct notification requirement by asserting that state exchanges are not equipped to send direct notices and in light of the agency’s belief that “ensuring consumers are not receiving APTC improperly is necessary for program integrity.” 83 Fed. Reg. at 16,984. This purported justification fails, and the 2019 Rule’s failure to reconcile provision is arbitrary and capricious, for at least two reasons. First, CMS offered no evidence that consumers are in fact “receiving APTC improperly.” Id. Second, the 2019 Rule indicates that FFEs will continue to provide direct notification, demonstrating that CMS recognizes the utility and importance of such notifications. See id. at 16,983. Indeed, the direct notice requirement was added to the failure to reconcile provision in 2016 in response to concerns that denying APTCs without direct notice would violate due process.72 CMS thus
72 HHS, Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods, 81 Fed. Reg. 94,058, 94,124 (Dec. 22, 2016).
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knows about the problem that direct notification was designed to solve, and yet is now eliminating the solution without setting forth any evidence that the problem has gone away.
56. The 2019 Rule will cause eligible individuals to lose the subsidies that the ACA guarantees, and will do so without providing any advance, direct notification. In 2017, annual premium tax credits averaged $4,458.73 The unexpected loss of this assistance would likely cause many if not most individuals to drop coverage entirely, especially since they will not know why they lost it or how to remedy their loss. Individuals might lose subsidies for any number of reasons that would ultimately prove unfounded; direct notification facilitated individuals’ efforts to determine why they had lost eligibility and how to fix the problem. Former Administration officials who worked to implement the ACA’s advance premium tax credit program estimate that this Administration’s decision could deprive up to 800,000 eligible individuals of their APTCs, leading to a significant rise in the number of uninsured Americans—directly contrary to the purpose of the Act.
2. Outsourcing to States the Compliance Review of Insurance Plans to be Offered on Federal Exchanges
57. According to the text of the ACA, the Secretary of Health and Human Services “shall, by regulation, establish criteria for the certification of health plans as qualified health plans,” 42 U.S.C. § 18031(c)(1), including criteria that “ensure a sufficient choice of providers,” id. § 18031(c)(1)(B)—i.e., criteria that ensure network adequacy. Pursuant to those criteria, “[a]n Exchange shall, at a minimum[,] implement procedures for the certification, recertification, and decertification . . . of health plans as qualified health plans.” 42 U.S.C. § 18031(d)(4)(A).
73 See CMS, 2017 Effectuated Enrollment Snapshot 5 (June 12, 2017), https://downloads.cms.gov/files/effectuated-enrollment-snapshot-report-06-12-17.pdf.
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58. Consistent with these statutory requirements, CMS, acting as the exchange in states with federally-facilitated exchanges, used to review network adequacy and accreditation status plans that insurers proposed to offer on those exchanges.
59. The 2019 Rule instead extends a policy first adopted in the 2018 Market Stabilization Rule, 82 Fed. Reg. 18,346, 18,371-72 (April 18, 2017), under which CMS will “rely on the [s]tates’ reviews” of network adequacy and other critical requirements in certain federally-facilitated exchanges, see 83 Fed. Reg. at 17,024-26. In defending its decision, CMS explained that it “is committed to recognizing States’ role as the primary regulator of their insurance markets,” and that it sought “to limit duplicative oversight over issuers.” Id. at 17,024. CMS’s decision is both contrary to law and arbitrary and capricious under the APA, and must be set aside.
60. First, CMS’s decision conflicts with express statutory language, quoted above, that requires the federal government, as the administrator of federally-facilitated exchanges, to certify plans proffered by insurers as qualified health plans under the applicable statutory and regulatory criteria. Under the ACA, the Secretary of Health and Human Services “shall, by regulation, establish criteria for the certification of health plans as qualified health plans,” including criteria that “ensure a sufficient choice of providers.” 42 U.S.C. § 18031(c)(1) (emphasis added). Pursuant to those criteria, “[a]n Exchange shall, at a minimum[,] implement procedures for the certification, recertification, and decertification . . . of health plans as qualified health plans.” 42 U.S.C. § 18031(d)(4)(A) (emphasis added). The statute’s repeated use of the term “shall” makes plain that these are mandatory duties. Moreover, the statutory requirement to certify health plans is a “minimum” requirement, 42 U.S.C. § 18031(d)(4)(A), below which an
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exchange cannot fall. Simply deferring to states to conduct plan reviews does not constitute “implement[ing] procedures” for the exchange’s review.
61. Interpreting the statute to prohibit CMS’s decision to rubber-stamp states’ review of network adequacy for federally-facilitated exchanges is also consistent with the Act’s purpose. Among other things, “[t]he Act aims to increase the number of Americans covered by health insurance” adequate to meet their health needs. Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519, 538 (2012). But health insurance cannot meet a consumer’s needs if the provider’s network is inadequate—that is, if it lacks facilities close to the consumer’s home or that are equipped to handle the consumer’s specific medical conditions. Thus, permitting CMS, as the administrator of federally-facilitated exchanges, to approve a state’s assessment of network adequacy powerfully undermines this central feature of, and conflicts with, the ACA.
62. Second, even if the ACA permitted the choice CMS made, the explanation CMS offered for outsourcing its duties to states is insufficient, confirming that its choice was arbitrary and capricious. CMS offered virtually no response to commenters’ views that “[s]tates’ and accrediting entities’ review processes do not do enough to ensure enrollees have adequate access to necessary care,” simply asserting that its decision would “reduc[e] regulatory burden on issuers, while also preserving adequate access to care.” 83 Fed. Reg. at 17,025. In particular, CMS failed to provide evidence to buttress its assertion that state review procedures are sufficient to guarantee network adequacy, including, for example, an analysis of the rigor of state procedures or assessments of plans certified by state regulators. That notwithstanding that “[a]long with lacking quantitative standards to ensure broad coverage, most states lack an adequate process to protect consumers forced to seek out-of-network treatment in particular
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cases.”74 Similarly, CMS neglected to consider how an exchange operator may be uniquely positioned to assess plan adequacy. Because CMS did not sufficiently justify its decision, failed to adequately respond to comments, and failed to consider important aspects of the problem, its decision in the 2019 Rule to outsource plan review on federally-facilitated exchanges to states was arbitrary and capricious.
63. Outsourcing federal plan review to states will permit insurers to market plans with overly restrictive networks of providers—networks that could thereby limit patient access to care. Even before the 2019 Rule, only 41 percent of qualified health plans in FFE states had networks that included National Cancer Institute-designated cancer centers.75 Similarly, one study estimated that 15 percent of FFE plans lacked in-network physicians for at least one specialty.76 These numbers will continue to fall now that the federal government has shirked its plan review responsibilities. More consumers will end up purchasing inadequate plans, either through necessity or confusion—meaning that a greater share of the population will obtain insurance coverage that is insufficient to meet their health care needs. The rate of the underinsured will therefore increase.
3. Reducing Oversight of Insurance Brokers Participating in Direct Enrollment
64. By reducing federal oversight of insurance brokers that assist consumers in signing up for insurance on ACA exchanges via direct enrollment, see id. at 16,981-82, the 2019
74 Mark Hall & Caitlin Brandt, Network Adequacy Under the Trump Administration, Health Affairs Blog, Sept. 14, 2017, https://www.healthaffairs.org/do/10.1377/hblog20170914.061958/full/. 75 Kenneth L. Kehl et al., Access to Accredited Cancer Hospitals Within Federal Exchange Plans Under the Affordable Care Act, 35 J. Clinical Oncology 645, 647 (2017). 76 Stephen C. Dorner et al., Adequacy of Outpatient Specialty Care Access in Marketplace Plans Under the Affordable Care Act, JAMA Network (2015), https://jamanetwork.com/journals/jama/fullarticle/2466113.
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Rule will enable brokers to provide consumers with incorrect information and permit brokers to deny consumers the assistance that they need, and that the ACA requires, so that they can identify and purchase the health insurance that best meets their situation.
65. Direct enrollment is a process under which a consumer enrolls in an ACAcompliant health insurance plan through a third-party website instead of through the governmental platform (HealthCare.gov for FFEs). Direct enrollment entities are “agents, brokers, and issuers that participate in direct enrollment and use their own internet website for [qualified health plan] selection or to complete the Exchange eligibility application.” Id. at 16,981. Given evidence that direct enrollment entities were committing fraud, signing up individuals without their knowledge or consent, and using inaccurate calculators for APTC eligibility, prior rules provided a strong oversight structure and required such entities to be audited by third parties that HHS approved.
66. The 2019 Rule eliminates this protection and permits agents, brokers, and issuers participating in direct enrollment to “select their own third-party entities for conducting audits, rather than requiring HHS to initially review and approve these entities”—i.e., to select an auditor that has not been approved by HHS to determine whether the agent, broker, or issuer is ready to handle direct enrollment in compliance with relevant requirements. Id.
67. CMS’s decision to weaken oversight over direct enrollment entities is arbitrary and capricious and must be set aside. First, CMS failed to grapple with evidence, well known to the agency, that direct enrollment entities have in the past produced poor information for consumers, facilitating consumers’ poor enrollment choices. That evidence is what necessitated CMS oversight of direct enrollment entities’ auditors in the first place. Second, and relatedly, CMS failed to adequately respond to comments expressing “concern[] that enrollment through a
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non-governmental site would occur without proper oversight and controls.” Id. at 16,982. Indeed, CMS offers no meaningful response, and instead asserts, without evidence, that it “believe[s]” that its decision “will ensure that quality operational readiness reviews are conducted.” Id.
68. Scaling back oversight of agents, brokers, and issuers that participate in direct enrollment will increase the likelihood that consumers receive inaccurate information, thus decreasing overall enrollment and leading to a rise in the rate of the uninsured.77 CMS’s decision to shirk its responsibilities will also lead to a rise in the rate of the underinsured, as confusion around APTC eligibility facilitated by CMS’s withdrawal will lead individuals to choose plans that are not appropriate to their needs.
Deterring Americans from Enrolling in Quality Health Insurance Plans 69. Other provisions of the 2019 Rule make it more difficult for consumers to enroll in ACA-compliant health insurance coverage.
1. Making It Harder to Compare Insurance Plans 70. A key function of the exchanges is to “allow[] people to compare and purchase” qualified health plans. King, 135 S. Ct. at 2485. In order to carry out this obligation—”to simplify the consumer shopping experience and to allow consumers to more easily compare plans across issuers”—prior rules supported “standardized options,” which are qualified health plans at different levels of coverage with a cost-sharing structure specified by HHS, including
77 After issuing the 2019 Rule, CMS amplified the effects of the provision weakening oversight over agents, brokers, and issuers that participate in direct enrollment by unveiling “enhanced direct enrollment” for FFE and hybrid exchange states, which aims to increase the number of consumers using direct enrollment. See CMS, Enhanced Direct Enrollment for 2019 FAQs (Nov. 28, 2018), https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarketplaces/Downloads/FAQs-EDE.pdf. This purportedly “streamline[d] consumer experience” for direct enrollment, id., will expose additional health insurance purchasers to under-regulated agents, brokers, and issuers.
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fixed deductibles, fixed annual limitations on cost-sharing, and fixed copayments or coinsurance for certain specified benefits.78
71. HHS supported standardized options given its recognition that “[a]n excessive number of health plan options makes consumers less likely to make any plan selection, more likely to make a selection that does not match their health needs, and more likely to make a selection that leaves them less satisfied.”79 HHS further stated that its experience during prior “open enrollment periods suggests that many consumers, particularly those with a high number of health plan options, find the large variety of cost-sharing structures available on the Exchanges difficult to navigate.” 80 Fed. Reg. at 75,542. HHS determined that “standardized options will provide these consumers the opportunity to make simpler comparisons of plans offered by different issuers within a metal level,” and to “focus their decision making on the providers in the plan networks, premiums, benefits, and quality,” and prevent consumers from having “to make complex tradeoffs among cost-sharing differences among a large number of plans.” Id. “For the 2017 and 2018 benefit years, HHS specified standardized options in rulemaking, encouraged issuers to offer such plans, and provided differential display of these plans on HealthCare.gov.” 83 Fed. Reg. at 16,974.
72. Notwithstanding the agency’s own understanding of their effectiveness, the 2019 Rule discontinues support for standardized options. See id. at 16,974-75. CMS’s decision to do so is arbitrary and capricious. CMS claims that standardized options stymied innovation, “removing incentives for issuers to offer coverage with innovative plan designs.” Id. at 16,974.
78 See CMS, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017, 81 Fed. Reg. 12,204, 12,205, 12,289-293 (Mar. 8, 2016) (final rule). 79 See HHS Notice of Benefit and Payment Parameters for 2017, 80 Fed. Reg. 75,488, 75,542 (Dec. 2, 2015) (proposed rule); see id. at 75,542 & nn.31-32 (citing data).
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Yet CMS has cited no data to support that contention. Furthermore, CMS offered no reasonable response to commenters who pointed out that standardized options “are a useful consumersupport tool that aids in plan comparisons and selection,” that their presence in fact “encourages issuers to innovate on other plan features and encourages issuers to compete on networks and formularies,” and that their withdrawal “could create confusion for consumers, especially those with low health literacy or certain health conditions.” Id. at 16,975 (emphasis added). CMS has not adequately explained its decision to make comparison shopping more difficult.
73. By eliminating support for standardized options on federal exchanges, the 2019 Rule makes it more difficult for consumers to select appropriate health coverage, and also increases the risk that they will go without coverage entirely. These effects will, in turn, increase the size of the underinsured and uninsured populations. Indeed, CMS itself cited commenters who pointed out “that removing the standardized option designation could make plan selection more difficult resulting in fewer people enrolling in QHPs.” Id.
74. Moreover, eliminating support for standardized options will limit the degree to which health plans will compete on price; instead, some plans will choose to compete on benefit design in a gambit to discourage high-risk enrollees. Research found that after Massachusetts standardized its plans, consumers placed additional weight on cost-sharing features of their plan selections.80 Covered California, which runs California’s ACA exchange, attributes some of its success in offering affordable choices to its use of standardized plans.81 Without standardized
80 Keith M. Marzilli Ericson, & Amanda Starc, How Product Standardization Affects Choice: Evidence from the Massachusetts Health Insurance Exchange, 50 J. Health Econ. 71 (2016). 81 Shelby Livingston, How California Made Obamacare Work, Modern Healthcare, June 13, 2017, http://www.modernhealthcare.com/article/20170613/NEWS/170619961.
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options, it will be harder for individuals to select coverage, prices will rise, and the rate of the uninsured and underinsured will increase.
2. Undermining the Navigator Program 75. As explained above, the ACA requires exchanges to award grants to healthcare “Navigators” that are responsible for helping individuals enroll in qualified health plans. 42 U.S.C. § 18031(i). Under HHS’s prior rules, each exchange was required to have two Navigators, one of those Navigators was required to be a community- and consumer-focused nonprofit, and Navigators were required to have physical presences in the areas they served.82 CMS decided to eliminate these requirements in the 2019 Rule. See 83 Fed. Reg. at 16,979-80. Its decision violates the APA in multiple ways. 76. First, CMS’s decision to eliminate these requirements is contrary to law because it permits entities to qualify as Navigators that cannot satisfy the relevant statutory criteria. Among other things, Navigators must “conduct public education activities to raise awareness of the availability of qualified health plans,” 42 U.S.C. § 18031(i)(3)(A); “distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits . . . and cost-sharing reductions,” id. § 18031(i)(3)(B); “facilitate enrollment in qualified health plans,” id. § 18031(i)(3)(C); provide enrollees with grievances, complaints, or questions about their health plans with referrals to specified entities, id. § 18031(i)(3)(D); and “provide information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges,” id. § 18031(i)(3)(E). But Navigators without a physical presence in an exchange service area cannot, in the terms CMS itself used in
82 See 45 C.F.R. §§ 155.210(c)(2), 155.210(e)(7), 155.215(h) (effective May 9, 2016 to June 17, 2018).
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proposing the physical presence requirement, “provide[]” “face-to-face assistance . . . to applicants and enrollees”83—they therefore cannot adequately carry out the statutory duties summarized above.
77. The statute also requires Navigators to “demonstrate to the Exchange involved that [they have] existing relationships, or could readily establish relationships, with employers and employees, consumers (including uninsured and underinsured consumers), or self-employed individuals likely to be qualified to enroll in a qualified health plan.” 42 U.S.C. § 18031(i)(2)(A). The prior requirement that exchanges award grants to at least two Navigators, and that one be a community- and consumer-focused nonprofit, faithfully implemented this statutory mandate; the 2019 Rule’s elimination of these requirements violates it. Current Navigators will potentially be replaced by organizations with conflicts of interest because commissions prompt them to steer enrollees to particular insurers. New Navigators may also have an incentive to discourage enrollment of high-cost enrollees.
78. Second, the 2019 Rule’s elimination of the physical presence requirement is arbitrary and capricious. As noted above, in proposing the requirement CMS understandably recognized that face-to-face assistance is necessary for Navigators to carry out their statutorily required duties. 79 Fed. Reg. at 15,832. In response to CMS’s proposal to eliminate the requirement, “many commenters [stated] that entities not physically present in an Exchange service area may not be able to provide a full spectrum of local outreach, education, and assistance to support enrollment and post-enrollment activities”; “[m]any commenters” also stated “that removing this requirement would negatively affect hard-to-reach populations, as the
83 CMS, Patient Protection and Affordable Care Act; Exchange and Insurance Market Standards for 2015 and Beyond, 79 Fed. Reg. 15,808, 15,832 (Mar. 21, 2014).
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in-person assistance provided by Navigator entities is often the only known resource and form of support for some low-income and other at-risk populations”; and “some commenters [stated] that web or phone-based assistance is a poor substitute for in-person assistance delivered by a known and trusted community-based organization, and that this is particularly true for those living with significant health needs for whom remote assistance may prove inadequate and frustrating.” 83 Fed. Reg. at 16,980. On top of that, CMS acknowledged—twice—”that entities with a physical presence and strong relationships in their [exchange] service areas tend to deliver the most effective outreach and enrollment results.” Id.; see id. at 16,979-80 (similar). Yet HHS eliminated the requirement. That is arbitrary and capricious.
79. The Administration’s actions will decrease individuals’ and families’ in-person access to complete, impartial information. In so doing, they will dampen overall enrollment, especially among vulnerable populations, and thereby increase the rate of the uninsured. People who receive in-person assistance are nearly 40 percent more likely to enroll in coverage than people who are forced to go it alone.84 In-person assistance is particularly important for young people and minority populations, especially Latinos. A study conducted during the ACA’s first open enrollment period found that two out of every five young people who successfully enrolled in coverage received help from a Navigator.85 Another study found that nearly 50 percent of
84 Sara R. Collins et al., Following the ACA Repeal-and-Replace Effort, Where Does the U.S. Stand on Insurance Coverage?, Commonwealth Fund (Sept. 7, 2017), http://www.commonwealthfund.org/Publications/Issue-Briefs/2017/Sep/Post-ACA-Repeal-andReplace-Health-Insurance-Coverage. 85 Deloitte, Young Adults and Health Insurance: Not Invincible--but Perhaps Convincible Findings from the Deloitte 2014 Survey of Young Adults and Health Insurance 6 (2014), https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-chsyoung-adults-and-health-insurance.pdf.
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Latinos who successfully enrolled received in-person assistance.86 Decreased in-person access to Navigators makes it more difficult for individuals to shop for appropriate health insurance, and will lead to a rise in the uninsured and underinsured.
3. Making Small Business Exchanges Less User-Friendly 80. The ACA requires exchanges to “provide[]for the establishment of a Small Business Health Options Program”—a “‘SHOP Exchange’[] that is designed to assist” certain “small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market.” 42 U.S.C. § 18031(b)(1)(B).87 The ACA further requires SHOP exchanges to “make available qualified health plans to . . . qualified employers,” id. § 18031(d)(2)(A); to protect employers’ and employees’ choice among certain qualified health plans, see id. § 18032(a)(2); and to protect employees’ ability to enroll even after their employer no longer qualifies as a small employer under the Act, see id. § 18024(b)(4)(D). 81. Under prior rules, CMS interpreted the ACA as “requir[ing] that all SHOPs provide for employer eligibility, employee eligibility, and certain enrollment functions, including premium aggregation functions.” 83 Fed. Reg. at 16,996. Provisions of the 2019 Rule purport to reinterpret the ACA and remove these requirements. See id. at 16,996-17,006. In so doing, these provisions are contrary to law and arbitrary and capricious. First, the removal of these requirements permits SHOPs that cannot fulfill their statutory duties, described above, which violates the ACA’s text. Second, although CMS purported to justify its decision by reference to
86 Adrian Garcia Mosqueira & Benjamin D. Sommers, Better Outreach Critical to ACA Enrollment, Particularly for Latinos, To the Point, Jan. 14, 2016, http://www.commonwealthfund.org/publications/blog/2016/jan/better-outreach-critical-to-acaenrollment-particularly-for-latinos. 87 See 42 U.S.C. § 18024(b)(2) (defining “small employer”). See generally Small Business Health Options Program (SHOP), CMS, https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/SHOP.html.
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declining enrollment in SHOPs, see, e.g., id. at 16,996, making SHOPs even less functional and less user friendly will exacerbate the very problem CMS cited. Because CMS’s interpretation violates the statute and has not been well-reasoned, these provisions of the 2019 Rule violate the APA.
82. By eliminating the requirement that SHOP exchanges allow employers to determine employee eligibility, aggregate premiums, and enroll employees online, the 2019 Rule makes it more difficult for small businesses to offer workers and their dependents affordable coverage, and thereby will increase the size of the uninsured population. These changes will also push small businesses to use a broker or buy directly from an insurance company, limiting their ability to make plan comparisons and shop by price for appropriate coverage, potentially raising their premiums.
4. Imposing Unnecessary Income Verification Requirements 83. In general, the ACA makes advance premium tax credits available to individuals purchasing insurance on an exchange whose income is between 100-400 percent of the federal poverty line (“FPL”). See 26 U.S.C. § 36B; 42 U.S.C. §§ 18081, 18082. Out of purported concern that individuals inflate their income above the FPL to gain APTCs, resulting in the payment of APTCs to those not entitled to receive them, provisions of the 2019 Rule impose income verification requirements “where electronic data sources reflect income under 100 percent FPL and a consumer attests to income between 100 percent FPL and 400 percent FPL.” 83 Fed. Reg. at 16,985; see id. at 16,985-87. 84. These provisions are arbitrary and capricious. Even though individuals have been seeking and receiving APTCs for years, in the 2019 Rule CMS “acknowledge[d] that it does not have firm data on the number of applicants that might be inflating their income to gain APTC.”
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Id. at 16,986. Furthermore, CMS admitted that its new rules will disadvantage “households with lower income.” Id. CMS has no sufficient answer to the “many commenters” who “expressed concern that low-income consumers have difficulty in providing documentation to resolve their annual income data matching issues and that [CMS’s new rules] would exacerbate that problem.” Id. Moreover, because APTC is reconciled with actual income from tax data for the year in question, the concern about program integrity is overstated. Overall, it is more than ironic that in the same rule that CMS repeatedly expresses a desire to cut red tape and reduce unnecessary regulation, it nonetheless increases bureaucratic hurdles for the most vulnerable Americans. That disparity renders these new requirements irrational. Because the Administration has not adequately explained why burdensome income verification measures are needed, the provisions of the 2019 Rule that impose them are arbitrary and capricious.
85. By making it harder for consumers to obtain insurance tax credits, these provisions of the 2019 Rule will likely mean that more consumers will choose to go without coverage entirely—i.e., that the rate of the uninsured will increase. The deterrent effects of paperwork burdens are well-documented as a general matter.88 Moreover, in this specific context, paperwork burdens have historically deterred enrollment of people with relatively low need for health care; those with high health care needs will work harder to get coverage.89 For
88 See, e.g., Tricia Brooks, Why is NH Proposing to Replace Proven Electronic Citizenship Verification with Burdensome Medicaid Paperwork Requirements?, Georgetown University Health Policy Institute, Center for Children and Families (June 28, 2018), https://ccf.georgetown.edu/2018/06/28/why-is-nh-proposing-to-replace-proven-electroniccitizenship-verification-with-burdensome-medicaid-paperwork-requirements/. 89 Stan Dorn, Helping Special Enrollment Periods Work Under the Affordable Care Act 5-6, Urban Institute (June 2016), https://www.urban.org/sites/default/files/publication/81806/2000834-Helping-SpecialEnrollment-Periods-Work-Under-the-Affordable-Care-Act.pdf.
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example, a verification pilot study found that only 55 percent of young adults submitted required documents compared to 73 percent of older applicants.90 As such, extending verification to additional groups will worsen the risk pool and raise premiums, causing coverage to become less affordable.
86. This challenge will be even greater among the lower-income enrollees targeted by this policy since they are more likely to have fluctuating income, part-year or part-time employment, and multiple employers, and to have difficulty accessing and supplying necessary documentation. One analysis estimates that 50 percent of adults with income below 200 percent of the poverty level experience income changes that make them move between eligibility for Medicaid and the exchanges.91
Driving Up Costs 87. Lastly, other provisions of the 2019 Rule make health insurance coverage more expensive for consumers.
1. Curtailing Review of Insurance Rate Increases 88. The 2019 Rule decreases the federal government’s role in reviewing insurance rates, giving insurers greater flexibility to increase premiums without any justification. Under the ACA, “[t]he Secretary, in conjunction with States, shall establish a process for the annual review . . . of unreasonable increases in premiums for health insurance coverage.” 42 U.S.C. §
90 Pre-Enrollment Verification for Special Enrollment Periods, CMS, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Pre-EnrollmentSEP-fact-sheet-FINAL.PDF. 91 Benjamin D. Sommers & Sara Rosenbaum, Issues in Health Reform: How Changes in Eligibility May Move Millions Back and Forth Between Medicaid and Insurance Exchanges, Health Affairs (Feb. 2011), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2010.1000.
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300gg-94(a)(1). Pursuant to this statutory duty, CMS has promulgated regulations that require insurers to justify annual rate increases above a given threshold. See 45 C.F.R. §§ 154.101 et seq.
89. The 2019 Rule, however, changes this scheme—and thereby flouts CMS’s statutory duties—in two respects. First, the 2019 Rule exempts student health plans from rate review beginning July 1, 2018. 83 Fed. Reg. at 16,972. Second, the 2019 Rule raises the threshold for rate review to rate increases of 15 percent rather than the current 10 percent. Id. at 16,972-73. Both of these changes limit the federal government’s review of unwarranted rate increases and are unlawful.
90. To start, the 2019 Rule’s carve-out for student health plans is contrary to the text of the ACA. As explained above, the ACA requires review of “unreasonable increases in premiums for health insurance coverage,” 42 U.S.C. § 300gg-94(a)(1), which are defined as “benefits consisting of medical care,” id. § 300gg-91(b)(1)—a term that encompasses student health plans, which plainly provide medical care benefits like any other health insurance plan. Currently, the only exceptions to rate review are for “excepted benefits” and “grandfathered health plan” coverage, both of which are mandated by statute, see 42 U.S.C. §§ 300gg-91(c), 18011, and for large group plan rates, which are negotiated on a group-by-group basis and therefore cannot be effectively reviewed. By its plain terms, therefore, the ACA requires rate review of student health plans.
91. Moreover, the 2019 Rule’s student health plan exception is arbitrary and capricious. As CMS admitted, “[s]tudent health insurance coverage is considered by HHS to be a type of individual market coverage and is generally subject to . . . individual market requirements.” 83 Fed. Reg. at 16,972. CMS provided an insufficient explanation for its decision to change course and treat student health plans like large group plans rather than individual
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plans. CMS also failed to meaningfully address comments that explained how exempting such plans “would result in minimal oversight and decreased affordability.” Id. Instead, CMS argued that states can step in by engaging in rate review themselves. Id. Acknowledging that some states lack “an Effective Rate Review Program,” however, CMS claimed that it would continue to monitor rates “based on complaints and as part of targeted market conduct examinations,” id.— ignoring the need for automatic, systemic review of increased rates that underlies the rate review program.
92. The 2019 Rule’s increased threshold for rate review is also arbitrary and capricious. CMS raised the threshold “in recognition of significant rate increases,” 83 Fed. Reg. at 16,972—but larger rate increases are a reason for more, rather than less, review. CMS also gave short shrift to the “many” commenters concerned about increasing rates, arguing that the increased threshold would have implicated only one rate filing later found to be unreasonable. Id. at 16,973. In doing so, CMS ignored the fact that one of the core functions of rate review is to deter unreasonable increases from being submitted in the first place. CMS again invoked state rate review procedures as a stopgap measure, see id.—meaning that its explanation is again deficient for the reasons stated above. All told, CMS failed to consider important aspects of the problem, rendering its decision arbitrary and capricious.
93. Overall, the 2019 Rule’s unlawful changes to rate review will make it easier for insurers to increase rates without adequate justification; the purpose of rate review is for insurance commissioners and the public to examine the proposed reasons for health insurance premium increases in the individual and small-group market and adjust them as appropriate to improve affordability for consumers. In 2011, one in five proposed premium increases was reduced through rate review, with rates that went into effect approximately one-fifth lower than
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those initially requested by the insurer.92 In 2015, rate review lowered premiums in the individual and small group markets by $1.5 billion.93 And if prices are permitted to increase without the significant check provided by rate review, individuals will increasingly decide to go without appropriate coverage or any coverage at all—driving up the rate of uninsured and underinsured individuals.
2. Reducing Rebates for Poor Insurer Performance 94. Lastly, the 2019 Rule makes it easier for insurers to avoid paying rebates to consumers if they provide subpar coverage. Under the ACA, insurers must pay rebates if the percentage of each premium that they spend on paying claims and improving their services—the “medical loss ratio” or “MLR”—drops below 85 percent (for large group insurance plans) or 80 percent (for small group and individual insurance plans). 42 U.S.C. § 300gg-18(b)(1)(A). “These minimum MLR standards are intended to help ensure that individuals covered under private health insurance plans (enrollees) receive adequate value for their premiums and to create incentives for insurers to become more efficient in their operations.”94 95. The 2019 Rule, however, alters the method by which rebates are awarded. The Rule allows insurers to claim a flat 0.8 percent of premium credit for quality improvement activities (“QIA”)—i.e., “activities that improve health care quality,” 42 U.S.C. § 300gg18(a)(2)—when calculating medical loss ratio, rather than a percent based on the amount actually
92 Kaiser Family Foundation, Quantifying the Effects of Health Insurance Rate Review 3 (Oct. 2012), https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8376.pdf. 93 HHS, Rate Review Annual Report 5 (Dec. 2015), https://www.cms.gov/CCIIO/Resources/Forms-Reports-and-Other-Resources/Downloads/RateReview-Annual-Report_508.pdf. 94 GAO-14-580, Private Health Insurance: Early Effects of Medical Loss Ratio Requirements and Rebates on Insurers and Enrollees 1, U.S. Government Accountability Office (July 2014), https://www.gao.gov/assets/670/664719.pdf.
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spent on such activities, see 83 Fed. Reg. at 17,032-33. In other words, the 2019 Rule allows insurers to take credit for improving their services whether or not they actually did so. This change is unlawful.
96. To start, allowing insurers to claim a flat credit for quality improvement activities is contrary to the text of the ACA. The ACA requires an issuer to report “the percentage of total premium revenue . . . that such coverage expends” for, among other things, “activities that improve health care quality.” 42 U.S.C. § 300gg-18(a)(2). The statute’s language requires insurers to report the amount actually spent on QIA—much like insurers are obligated to report how much they actually spent on reimbursing claims. Id. § 300gg-18(a)(1). The statute does not permit CMS to instead throw up its hands and give every insurer the same credit, whether or not the funds are actually expended. To the contrary, that approach undermines the statute’s clear purpose: to encourage insurers to improve the quality of their services, lest they be forced to pay a rebate.95
97. CMS’s decision is also arbitrary and capricious. CMS decided to allow insurers to claim a flat credit because of what it saw as “issuers’ relatively low and consistent reported expenditures on QIA and the significant burden associated with identifying, tracking, and reporting these expenditures.” 83 Fed. Reg. at 17,032. But CMS failed to corroborate its assertions of substantial burden, or to meaningfully address comments pointing out that “allowing issuers who spend nothing on QIA to take a standardized credit for QIA would disincentivize issuers from making such investments.” Id. Recognizing the validity of those concerns, CMS did modify its proposal to specify that insurers “that elect the standardized QIA reporting option must apply it consistently across all of their [s]tates and markets.” Id. at 17,033.
95 Id.
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That is an inadequate bandaid; nothing would stop an insurer from consistently failing to engage in quality improvement and simply claiming the newly invented flat-rate credit for all their plans. CMS added that insurers have other incentives to improve quality, but Congress explicitly created the MLR scheme because it believed that additional incentives are necessary.
98. This change will increase the rate of the uninsured and underinsured. Since the ACA’s medical loss ratio policy began in 2012, enrollees in the individual market have received nearly $4 billion in rebates.96 Those rebates are trending higher: insurers were required to pay nearly $707 million in rebates in 2018.97 And insurers paid rebates in each of the states at issue here (Ohio, Maryland, Illinois, Pennsylvania, and Virginia).98 By allowing insurers to increasingly avoid paying these rebates, the 2019 Rule will effectively cause consumers to pay more for worse insurance, leading to an increase in the number of consumers that lack appropriate coverage. II. Additional Executive Actions Demonstrating Defendants’ Violation of Their
Constitutional Duty to Faithfully Execute the ACA 99. As detailed above, the 2019 Rule includes at least nine separate provisions that illustrate how Defendants are violating their obligation to faithfully implement the Affordable Care Act. In addition, President Trump and his Administration have taken many other actions with the intent and effect of sabotaging the Act generally and its private insurance reforms and exchanges in particular. Taken together, all of these actions—those described above and those
96 Louise Norris, Billions in ACA Rebates Show 80/20 Rule’s Impact, HealthInsurance.org (Dec. 30, 2018), https://www.healthinsurance.org/obamacare/billions-in-aca-rebates-show-8020-rules-impact/. 97 Id. 98 Id.
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detailed below—establish Defendants’ pattern and practice of taking executive action to undermine the Act, and they demonstrate Defendants’ violation of the Take Care Clause.
Directing Agencies to Sabotage the Act 100. Hours after he was sworn in, President Trump signed Executive Order No. 13,765, “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” 82 Fed. Reg. 8,351 (Jan. 20, 2017). The Order turned what had been candidate Trump’s promises to repeal the ACA into President Trump’s official policy. Id. § 1 (“It is the policy of my Administration to seek the prompt repeal of the Patient Protection and Affordable Care Act . . . .”). “[P]ending such repeal,” the Order directs Administration officials to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act.” Id.; see id. §§ 2-4. Yet President Trump’s estimation of whether or not the Act’s reforms are “warranted” does not, and must not, affect his obligation to take care that the Act is faithfully executed, and actions his Administration has characterized as “consistent with law” have flown in the face of that constitutional obligation. 101. Executive Order No. 13,765 is not merely a statement of policy. Rather, its issuance marked the start of the Trump Administration’s usurpation of Congress’s authority in its unilateral effort to repeal the ACA. The Order authorizes agencies to “waive, defer, grant exemptions from, or delay the implementation of any” ACA provision or requirement that, in the Administration’s estimation, would impose fiscal or regulatory burdens. Id. § 2. As the press reported at the time, the Order “essentially allow[ed] the dismantling of the law to begin even
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before Congress move[d] to repeal it.”99 Indeed, five days after signing the Executive Order,
President Trump affirmed his agenda to “let [the ACA] explode” so as to be better positioned to “go in and . . . do a new plan.” “We’re gonna have an explosion,” he promised,100 and Executive
Order No. 13,765 delivered.
102. Joshua Peck, who served as Chief Marketing Officer for the federal government’s
ACA exchange (HealthCare.gov) until 2016, estimated that by signaling that the Administration
might not enforce the ACA’s individual mandate, Executive Order No. 13,765 resulted in
130,000 fewer individuals enrolling in health insurance during the open enrollment period for 2017 plan year insurance that was ongoing at the time.101 And as projected, within a month of its
being issued, the Executive Order indeed resulted in reduced enforcement of the individual mandate,102 as further detailed below.
103. By issuing and implementing Executive Order No. 13,765, President Trump and
his Administration have violated their constitutional obligation to take care that the ACA is
faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to
expand access to quality coverage—in at least two ways. First, the Order has limited and will
likely continue to reduce progress in decreasing the number of uninsured Americans, directly
99 Julie Hirschfield Davis & Robert Pear, Trump Issues Executive Order Scaling Back Parts of Obamacare, New York Times, Jan. 20, 2017, https://www.nytimes.com/2017/01/20/us/politics/trump-executive-order-obamacare.html. 100 Transcript: ABC News Anchor David Muir Interviews President Trump, ABC News (Jan. 25, 2017), http://abcnews.go.com/Politics/transcript-abc-news-anchor-david-muir-interviewspresident/story?id=45047602. 101 Joshua Peck, Trump Blocked Nearly 500,000 People From Getting Coverage, Medium, Feb. 2, 2017, https://medium.com/get-america-covered/trumped-blocked-nearly-500-000-peoplefrom-getting-coverage-70317eedaaa4. 102 Michael Hiltzik, Trump’s IRS Stages a Stealth Attack on Obamacare, Los Angeles Times, Feb. 15, 2017, http://www.latimes.com/business/hiltzik/la-fi-hiltzik-irs-obamacare-20170215story.html.
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undermining the Act’s aim. And second, by shrinking the risk pool, the Order will make health insurance less affordable, a result counter to the Affordable Care Act’s central goal—a goal so critical that it is featured in the Act’s title.
Attempting to Destabilize the Exchanges 104. As described above, Congress constructed the ACA to both support, and be supported by, robust enrollment in ACA-compliant plans on ACA exchanges. Key to strong enrollment numbers are competitive exchanges with low premiums that attract a broad range of consumers, not just those with high medical expenses, and a broad range of insurers, to foster competition. If one were setting out to weaken the exchanges, therefore, one could hardly do better than to sow uncertainty about the rules that govern them and the government support for them. Insurance companies strive to minimize risk and uncertainty. When risk and uncertainty increase, issuers raise premiums to compensate, or even exit insurance markets entirely. Sowing uncertainty in insurance markets is precisely what the Trump Administration has done from day one, including by issuing Executive Order No. 13,765, described above, and by taking the discrete executive actions detailed below. 105. Exemplifying the Trump Administration’s strategy is the way in which the Administration, over the course of the summer and the fall in 2017, repeatedly threatened to discontinue reimbursing insurers for cost-sharing reductions—to stop paying insurers back for the reductions in copayments, coinsurance, and so on, that the Act requires them to provide to consumers.103 At the time, pending litigation raised questions concerning those payments, but the
103 See, e.g., Chad Terhune & Julie Appleby, Uncertainty Over Obamacare Leaves Next Year’s Rates in Limbo, NPR, July 19, 2017, https://www.npr.org/sections/healthshots/2017/07/19/538099050/uncertainty-over-obamacare-leaves-next-years-rates-in-limbo; Robert Pear & Thomas Kaplan, Trump Threat to Obamacare Would Send Premiums and Deficits
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merits of those questions are not what is at issue here; rather, the Administration’s actions, aimed toward provoking a legislative repeal, were deliberately designed to introduce uncertainty into the exchanges through threats that the CSR payments would cease. As the President himself asserted, in one of his many intentionally intimidating statements, “If you don’t make them, [the ACA exchange] fails.”104
106. The threats served their purpose. Throughout the country, some insurers that had previously sold health insurance through the exchanges for the 2017 plan year exited them entirely, refusing to offer coverage for the 2018 plan year because of the Administration’s refusal to guarantee that CSR payments would continue.105 That left some counties with decreased competition among issuers, which (again) drives up prices and decreases overall enrollment. Indeed, at the time, the Congressional Budget Office warned that terminating CSR payments could increase the percentage of people living in areas not served by a single insurer between 2018 and 2020.106 Other insurers raised premiums by as much as 23 percent for 2018 to guard against the risk that they would not receive the payments. And (again)—as the Administration knew—rising premiums and decreased enrollment threaten the long-term success of the ACA by
Higher, New York Times, Aug. 15, 2017, https://www.nytimes.com/2017/08/15/us/politics/cboobamacare-cost-sharing-reduction-trump.html. 104 Aaron Blake, President Trump’s Thoroughly Confusing Fox Business Interview, Annotated, Washington Post, Apr. 12, 2017, https://www.washingtonpost.com/news/thefix/wp/2017/04/12/president-trumps-throughly-confusing-fox-business-interviewannotated/?utm_term=.0b4ab6f8b1a6. 105 Rachel Roubein, No Certainty on Cost-sharing Payments to Insurers, The Hill, June 8, 2017, http://thehill.com/policy/healthcare/336974-no-certainty-on-cost-sharing-payments-to-insurers (citing the exit of Anthem in Ohio in particular). 106 Congressional Budget Office, The Effects of Terminating Payments for Cost-Sharing Reductions (Aug. 15, 2017), https://www.cbo.gov/publication/53009.
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increasing adverse selection and weakening the market, leading to yet lower enrollment and higher premiums.
107. Tellingly, the Trump Administration ultimately stopped making CSR payments on October 12, 2017, shortly after the reconciliation instruction for legislation to repeal and replace the ACA expired.107 Confirming his aim all along, days later President Trump declared that the Act was “dead” and “gone,” and that “[t]here is no such thing as Obamacare anymore.”108 Some insurers and insurance commissioners adjusted to the Administration’s action by raising premiums rather than pulling out of the exchanges entirely. The Congressional Budget Office estimated that 2018 Silver plan premiums were 10 percent higher because of the Administration’s actions, and will be 20 percent higher by 2021.109 While few enrollees actually paid this sticker price in light of the ACA’s premium tax credits, this likely contributed to a reduction in enrollment among people not eligible for premium tax credits.110 And the cost to the federal government of those premium tax credits—and, therefore, to federal taxpayers— ballooned.
108. The Administration’s approach to CSR payments—create uncertainty at every turn—weakened insurance markets, particularly given the Administration’s timing. One recent study explains:
107 Dan Mangan, Obamacare Bombshell: Trump Kills Key Payments to Health Insurers, CNBC, Oct. 12, 2017, https://www.cnbc.com/2017/10/12/obamacare-bombshell-trump-kills-keypayments-to-health-insurers.html. 108 Rebecca Savransky, Trump: There Is No Such Thing as ObamaCare Anymore, The Hill, Oct. 16, 2017, http://thehill.com/policy/healthcare/355658-trump-there-is-no-such-thing-asobamacare-anymore. 109 May 2018 CBO Report, supra n.9, at 7, 9. 110 Jeanne Lambrew, No “ObamaCare Implosion” from Trump Payment Freeze, The Century Foundation, Apr. 19, 2018, https://tcf.org/content/commentary/no-obamacare-implosion-trumppayment-freeze/.
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Several subjects amplified that the Trump [A]dministration’s decision to cancel cost-sharing reduction payments for the final quarter of 2017, well after it was too late for insurers to adjust their 2017 rates, and just a few days before their deadline to decide on 2018 participation, “had a concussive quality” and was the “straw that broke the camel’s back” because it “sent a clear signal” to insurers that they “cannot rely on the federal government to keep its [funding] commitments” in the future . . . .111 These views emphasize that “[a]lthough actuarial uncertainty is always present, what has
especially bedeviled ACA insurers is the political uncertainty over adverse change in rules.”112 Over time, as further detailed below, Defendants have recognized and
deliberately exploited their ability to generate such uncertainty, and experts have found—
as the Trump Administration has known—that many of the actions discussed below will lead to increased premiums on ACA exchanges.113 If these actions are allowed to stand,
they will contribute to the Administration’s stated goal of undermining the Act.
1. Promoting Bare-Bones Plans to Try to Weaken ACA Exchanges 109. On October 12, 2017, President Trump signed Executive Order No. 13,813,
entitled “Promoting Healthcare Choice and Competition Across the United States,” 82 Fed. Reg.
48,385 (Oct. 12, 2017). Alleging that the ACA “has severely limited the choice of healthcare
options available to many Americans and has produced large premium increases in many State
individual markets for health insurance,” id. § 1(a), the Order directs the Administration to
111 Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 20, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-and-Strenghtening-theIndividual-Health-Insurance-Market2.pdf (alteration in original). 112 Id. at 19. 113 See American Academy of Actuaries, Drivers of 2019 Health Insurance Premium Changes 2, 4, http://www.actuary.org/files/publications/Premium_Drivers_2019_061318.pdf (addressing the effect of the elimination of cost-sharing reduction payments, and of expanded access to STLDI and AHPs, on premiums).
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“prioritize three areas for improvement in the near term: association health plans (AHPs), short-
term, limited-duration insurance (STLDI), and health reimbursement arrangements (HRAs),” id.
§ 1(b). All three—AHPs, STLDI, and HRAs—provide coverage, often bare-bones coverage, that
does not need to comply with the ACA’s requirements.114 For example, short-term, limited-
duration insurance can refuse to offer coverage at all, or exclude coverage, for preexisting
conditions; charge a higher rate based on an individual’s health history and health status; exclude
benefits such as prescription drugs, maternity care, mental health services, and substance use
disorder services; can include a dollar cap on services and stop paying medical bills after that cap
is reached; and are not required to limit consumer out-of-pocket costs.
110. By directing his Administration to expand access to bare-bones plans like AHPs,
STLDI, and HRAs, Executive Order No. 13,813 will “open doors for young and healthy people
to flee [the] ACA-compliant market,” i.e., the exchanges, “and find lower premiums” off of the
exchanges.115 Because on-exchange purchasers will as a group be older and sicker than they have
114 Association health plans purport to group small businesses, including self-employed workers, together to obtain coverage as though they were a single large employer. Short-term, limitedduration insurance, in keeping with its name, has historically been used to provide stop-gap coverage, for example when an individual transitions from one type of major medical coverage to another. Health reimbursement arrangements, also known as health reimbursement accounts, are funds set aside by employers to reimburse employees for qualified medical expenses. See generally Bernadette Fernandez et al., Background Information on Health Coverage Options Addressed in Executive Order 13813 at i-ii, Congressional Research Service, https://fas.org/sgp/crs/misc/R45216.pdf. 115 Timothy Jost, Trump Executive Order Expands Opportunities For Healthier People To Exit ACA, Health Affairs Blog, Oct. 12, 2017, http://www.healthaffairs.org/do/10.1377/hblog20171022.762005/full/; see Mark A. Hall & Michael J. McCue, How Do Noncompliant Health Plans Affect the Market?, To the Point, Nov. 15, 2017, http://www.commonwealthfund.org/blog/2017/how-do-noncompliant-health-plansaffect-market (“Actuaries and other analysts have expressed concern that allowing compliant and noncompliant health plans to be sold side by side in the same market could destabilize the market for the compliant plans. If people who benefit the least from the standard requirements are
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been in prior years, premiums for on-exchange purchasers will increase. This will lead to
decreased enrollments in ACA-compliant plans, particularly among the young and healthy. The
Order will thereby increase costs and decrease coverage, phenomena that the ACA was designed
to prevent.
111. Specifically, the Urban Institute estimated that expanded access to short-term, limited duration policies would cause 2.6 million people to lose coverage in 2019.116 The Office
of the Actuary at CMS projected that such enhanced access would increase premiums for ACAcompliant plans by 3 to 6 percent.117 And one analysis estimated that increased access to
association health plans would increase premiums for ACA-compliant individual market plans by 1.4 to 4.4 percent.118 Overall, the Congressional Budget Office estimated that the combined
effect of additional access to short-term, limited duration insurance and association health plans
would increase premiums for ACA-compliant plans by 2 to 3 percent, with 6 million people enrolling in these STLID and AHPs—plans with far fewer consumer protections.119
112. Given this, it is no surprise that one analysis found that more than 98 percent of
healthcare groups that commented on the Administration’s proposed STLDI regulation expressed
allowed to opt for cheaper noncompliant plans, then the risk pool for the compliant plans will worsen, driving their prices higher, and possibly to an unsustainable level.”). 116 See Linda J. Blumberg et al., Updated: The Potential Impact of Short-Term Limited-Duration Policies on Insurance Coverage, Premiums, and Federal Spending 6, Urban Institute (Mar. 2018), https://www.urban.org/sites/default/files/publication/96781/2001727_updated_finalized.pdf [hereinafter March 2018 Urban Institute Study]. 117 Paul Spitalnic, Estimated Financial Effects of the Short-Term, Limited-Duration Policy Proposed Rule 2, CMS (Apr. 6, 2018), https://www.cms.gov/Research-Statistics-Data-andSystems/Research/ActuarialStudies/Downloads/STLD20180406.pdf. 118 Sabrina Corlette et al., New Rules to Expand Association Health Plans, The Actuary (May 2018), http://www.theactuarymagazine.org/new-rules-to-expand-association-health-plans/. 119 May 2018 CBO Report, supra n.9, at 10.
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serious concerns or opposed it outright; the figure was 95 percent for the AHP regulation. “Among the groups were virtually every leading patient advocate in the country, including the American Lung Assn., the American Heart Assn., the Cystic Fibrosis Foundation, the March of Dimes, the National Multiple Sclerosis Society, Susan G. Komen, AARP and the advocacy arm of the American Cancer Society. Not a single group representing patients, physicians, nurses or hospitals voiced support in the public comments for the two Trump [A]dministration proposals.”120
113. In signing Executive Order No. 13,813, President Trump confirmed its intent, saying, “I just keep hearing repeal-replace, repeal replace. Well, we’re starting that process.”121 And thus, by using Executive Order No. 13,813 to begin unilateral executive efforts to repeal the ACA, the Administration directly usurped Congress’s lawmaking function. At least one member of Congress, Sen. Rand Paul, claimed to have worked directly with President Trump to craft the Order, in order to achieve the reforms that Congress itself had failed to advance.122 And a comparison of the Order with Sen. Paul’s proposed Obamacare Replacement Act, S. Bill No. 222, 115th Congress (2017-18),123 reveals multiple similarities.
120 Noam N. Levey, Trump’s New Insurance Rules Are Panned by Nearly Every Healthcare Group That Submitted Formal Comments, Los Angeles Times, May 30, 2018, http://www.latimes.com/politics/la-na-pol-trump-insurance-opposition-20180530-story.html. 121 Margot Sanger-Katz, What We Know About Trump’s Twin Blows to Obamacare, New York Times, Oct. 12, 2017, https://www.nytimes.com/2017/10/12/upshot/what-did-trumps-healthcare-executive-order-do.html. 122 See Max Greenwood, Rand Paul: I’ve Been Working with Trump for Months on Health Care Order, The Hill, Oct. 10, 2017, http://thehill.com/policy/healthcare/354663-rand-paul-ive-beenworking-with-trump-for-months-on-health-care-order. 123 Available at https://www.congress.gov/bill/115th-congress/senate-bill/222/text.
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114. In keeping with Executive Order No. 13,813’s directive, as of the date of this filing the Administration has finalized rules expanding access to association health plans124 and short-term limited duration insurance,125 and has proposed a rule expanding access to health reimbursement arrangements.126
115. By issuing and implementing Executive Order No. 13,813, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, the Order will result in fewer individuals receiving ACAcompliant health insurance coverage, directly undermining the Act’s goal. And second, by decreasing enrollments in ACA-compliant plans, the Order will increase premiums for quality plans, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
2. Undermining the Individual Mandate 116. As noted above, when Congress enacted the ACA it imposed an individual mandate that now, in light of congressional amendments in 2017, requires those without insurance to make a shared responsibility payment through December 31, 2018. See 26 U.S.C.
124 See Department of Labor, Definition of “Employer” Under Section 3(5) of ERISA— Association Health Plans, 83 Fed. Reg. 28,912 (June 21, 2018); see also New York v. U.S. Dep’t of Labor, No. 18-cv-1747 (D.D.C. filed July 26, 2018) (challenging the Administration’s AHP rule under the Administrative Procedure Act). 125 See Department of the Treasury, Final Rule, Short-Term, Limited-Duration Insurance, 83 Fed. Reg. 38,212 (Aug. 3, 2018); see also Association for Community Affiliated Plans, No. 18cv-2133 (D.D.C. filed Sept. 14, 2018) (challenging the Administration’s STLDI rule under the Administrative Procedure Act). 126 See Department of the Treasury, Notice of Proposed Rulemaking, Health Reimbursement Arrangements and Other Account-Based Group Health Plans, 83 Fed. Reg. 54,420 (Oct. 29, 2018).
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§§ 5000A, 5000A note. On February 14, 2017, citing President Trump’s Executive Order No.
13,765, the Internal Revenue Service announced that it was scrapping a new policy that had been
designed to strengthen the individual mandate by automatically rejecting tax returns of those who fail to answer whether they had health insurance.127 The press reported that this change
signaled that the Administration was “loosening up on enforcement of . . . [the] individual mandate.”128 Indeed, the IRS confirmed that at the direction of Executive Order No. 13,765, its decision aimed “to reduce potential burden”—i.e., to lessen enforcement—of the ACA.129
117. Although the IRS subsequently reversed course, it waited until October 2017 to do so.130 This was after insurers indicated, in summer 2017, that they would either raise
premiums or withdraw from the market if they did not have clarity on enforcement prior to the September 5, 2017 rate filing deadline.131 The months-long threat of underenforcement of the
individual mandate created uncertainty, thereby weakening markets and causing insurers to
increase prices.
118. On November 1, 2017, the first day of open enrollment, President Trump suggested that Congress repeal the individual mandate as part of a tax reform package.132 He did
127 See Peter Sullivan, IRS Loosening Enforcement of ObamaCare Mandate, The Hill, Feb. 15, 2017, http://thehill.com/policy/healthcare/319672-irs-takes-step-against-obamacare-mandate. 128 Id. 129 Id. 130 Michael Cohn, IRS Won’t Accept Tax Returns Next Year Without Health Coverage, Accounting Today, Oct. 17, 2017, https://www.accountingtoday.com/news/irs-wont-accept-taxreturns-next-year-without-health-coverage. 131 Rabah Kamal et al., An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges, Kaiser Family Foundation (Aug. 10, 2017), https://www.kff.org/healthreform/issue-brief/an-early-look-at-2018-premium-changes-and-insurer-participation-on-acaexchanges/ [hereinafter An Early Look]. 132 @realDonaldTrump, Twitter (Nov. 1, 2017, 7:59 AM), https://twitter.com/realDonaldTrump/status/925739132579729420.
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not, like his predecessor, encourage people to review their health insurance options and sign up
for coverage.133 Then, on November 6, 2017, the press reported that in the face of Congress’s
unwillingness to pass a bill repealing the individual mandate, President Trump was readying an
executive order to attempt the same, by unilateral executive action.134
119. Even after the 2017 tax bill reduced the shared responsibility payment to $0 for
the months starting after December 31, 2018, the Administration has endeavored to further
weaken the individual mandate while the payment remains in effect. For example, when it issued
the 2019 Rule, CMS also issued guidance providing expanded access to so-called “hardship
exemptions” from the mandate.135 Subsequently the Administration went even further: for the
2018 tax year, CMS and the IRS have enabled more individuals purportedly eligible for such
exemptions to simply claim them on their tax returns, rather than requiring them to submit
documentary evidence or written explanation and seek certification from their ACA exchange.136
120. There is no question that the ACA’s individual mandate has had an effect on
individuals’ decisions to purchase insurance. For instance, the uninsured rate among high-
133 Sarah Kliff, Trump Won’t Advertise Obamacare, So Obama is Stepping In, Vox, Nov. 1, 2017, https://www.vox.com/health-care/2017/11/1/16592274/obama-obamacare-video. 134 Kimberly Leonard, Trump Readies Executive Order to Unravel Obamacare’s Individual Mandate, Washington Examiner, Nov. 6, 2017, http://www.washingtonexaminer.com/trumpreadies-executive-order-to-unravel-obamacares-individual-mandate/article/2639728. 135 CMS, Guidance on Hardship Exemptions from the Individual Shared Responsibility Provision for Persons Experiencing Limited Issuer Options or Other Circumstances (Apr. 9, 2018), https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2018Hardship-Exemption-Guidance.pdf; see also Dan Diamond, Seema Verma Previews Medicare Agenda, Politico, Mar. 23, 2018, https://www.politico.com/newsletters/politicopulse/2018/03/23/seema-verma-previews-medicare-agenda-148797 (reporting that Defendant Verma was “weighing more exemptions to the ACA individual mandate”). 136 See CMS Guidance on Claiming a Hardship Exemption through the Internal Revenue Service (IRS) (Sept. 12, 2018), https://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/Authority-to-Grant-HS-Exemptions-2018-Final-91218.pdf; IRS Notice 2019-05 (Dec. 12, 2018), https://www.irs.gov/pub/irs-drop/n-19-05.pdf.
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income young adults, who faced increases in premiums due to the ACA insurance reforms,
sharply decreased between 2013 and later years, suggesting that the mandate affected their insurance decisions.137 Moreover, multiple studies show that uninsured people who signed up due to the mandate have health costs significantly below other enrollees.138
121. Congress acted to reduce the shared responsibility payment associated with the
mandate to $0 knowing that it would increase premiums by 10 percent in 2019. But prior to that,
the Trump Administration’s threats not to enforce the mandate drove up 2018 premiums all by
themselves. Preliminary analyses estimate that the deliberate uncertainty around the mandate’s
enforcement that the Administration introduced accounted for up to a 20 percent increase in 2018 individual market premiums.139 The Congressional Budget Office also attributed higher
premiums for 2018 and insurer withdrawals from the exchanges to uncertainty about the enforcement of the individual mandate.140 Those premium increases, in turn, made it more
difficult for other segments of the population to obtain coverage, eroding coverage overall.
122. By threatening underenforcement of the individual mandate, Defendants have
violated their constitutional obligation to take care that the ACA is faithfully executed. Rather,
they have purposefully undermined the Act—the aim of which is to expand access to quality
coverage—in at least two ways. First, threatening underenforcement of the individual mandate
137 Matthew Fiedler, How Did the ACA’s Individual Mandate Affect Insurance Coverage?, USC-Brookings Schaeffer Initiative for Health Policy (May 2018), https://www.brookings.edu/wp-content/uploads/2018/05/coverageeffectsofmandate2018.pdf 138 See, e.g., Martin B. Hackmann et al., Adverse Selection and An Individual Mandate: When Theory Meets Practice, 105 American Economic Review 1030 (2015); Amy Finkelstein et al., Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts (National Bureau of Economic Research, Working Paper No. 23668, 2017), available at https://scholar.harvard.edu/files/mshepard/files/finkelstein_hendren_shepard_SubsidizingInsuran ce.pdf. 139 An Early Look, supra n.131. 140 May 2018 CBO Report, supra n.9, at 2-3.
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will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, by decreasing health insurance enrollments, threatening underenforcement of the individual mandate will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
3. Refusing to Grant State Waiver Requests that Would Further the ACA’s Goals
123. Section 1332 of the ACA, 42 U.S.C. § 18052, permits states to apply for waivers of some of the law’s requirements in order to promote innovative policies that satisfy certain statutorily-prescribed guardrails, see id. § 18052(b)(1). Crucially, for example, states may only seek waivers that would “provide coverage that is at least as comprehensive as” ACA-compliant coverage. Id. § 18052(b)(1)(A). In keeping with these guardrails, only certain ACA provisions are subject to waiver under Section 1332. See id. § 18052(a)(2). Notably, the Act’s guaranteedissue and community-rating requirements, which require insurers to offer comprehensive coverage to individuals without regard to their medical conditions, are not waivable.
124. Although the Trump Administration has encouraged states to apply for Section 1332 waivers,141 it has either denied or not responded to many of the requests for waivers that it has received,142 especially when it believes that granting the waivers would faithfully implement
141 See, e.g., Letter from Thomas E. Price, former HHS Secretary, to state governors (Mar. 13, 2017), https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Downloads/March-13-2017-letter_508.pdf (“We welcome the opportunity to work with states on Section 1332 State Innovation Waivers….”). 142 See Alison Kodak, Administration Sends Mixed Signals On State Health Insurance Waivers, NPR (Oct. 19, 2017), http://www.npr.org/sections/healthshots/2017/10/19/558310690/administration-sends-mixed-signals-on-state-health-insurancewaivers. See generally Section 1332: State Innovation Waivers, CMS, https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-Innovation-
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the Act by expanding access to coverage. (By contrast, the Administration has eagerly processed
state waivers that are designed to reduce access to quality health insurance143 and, as further
addressed below, has encouraged states to seek such waivers.) Indeed, the Administration has
dragged its feet even though some states’ waiver requests are designed to lower premiums and
stabilize insurance markets. For example, the press reported that, upon learning about Iowa’s
waiver request and claims that the state’s plan would improve its exchange, President Trump
personally called Defendant Seema Verma, whose agency—CMS—is responsible for processing
waiver requests, and instructed her to deny Iowa’s application.144
125. The Administration’s actions have frustrated states’ efforts to support the ACA
and its reforms and to expand access to affordable, quality health insurance. For example, in
withdrawing its waiver request owing to the Administration’s delay, Oklahoma Secretary of
Health and Human Services Terry Cline stated that CMS’s failure to approve the waiver would
“prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance
premiums in 2018.”145
Waivers/Section_1332_State_Innovation_Waivers-.html (listing pending, approved, and denied waiver requests). 143 See Bruce Jaspen, Trump’s Medicaid Work Rules Hit States With Costs And Bureaucracy, Forbes, July 22, 2018, https://www.forbes.com/sites/brucejapsen/2018/07/22/trumps-medicaidwork-rules-hit-states-with-costs-and-bureaucracy/#745af26066f5; see also Stewart v. Azar, -- F. Supp. 3d --, No. 18-cv-152, 2018 WL 3203384 (D.D.C. June 29, 2018). 144 See Juliet Eilperin, As ACA Enrollment Nears, Administration Keeps Cutting Federal Support of the Law, Washington Post, Oct. 5, 2017, https://www.washingtonpost.com/politics/asaca-enrollment-nears-administration-keeps-cutting-federal-support-of-thelaw/2017/10/05/cc5995a2-a50e-11e7-b14f-f41773cd5a14_story.html?utm_term=.4c73ed0cbe7d. 145 Letter from Terry Cline, former Oklahoma Health Commissioner, to Steve Mnuchin, Secretary, United States Department of the Treasury, and Thomas E. Price, former HHS Secretary (Sept. 29, 2017), https://www.ok.gov/health2/documents/Oklahoma%201332%20Waiver%20Withdrawal%209.29 .17.pdf.
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126. By delaying and denying waiver requests, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, delaying and denying waiver requests will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, delaying and denying waiver requests will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
4. Enabling and Encouraging States to Seek Waivers that Would Undercut the ACA’s Goals
127. The Administration’s manipulation of Section 1332 waivers to sabotage the ACA has not been limited to delaying and denying waiver requests put forward by states that are attempting to faithfully implement the Act. The Administration has also taken official steps to solicit and facilitate waiver requests designed to undermine the Act. In guidance issued by CMS, HHS, and the Department of the Treasury that purports to interpret Section 1332, the Administration has in fact violated the Act, adopting a reading that permits, and even encourages, states to seek waivers that would promote plans that lack the Act’s consumer protections.146 For example, the guidance specifies that “[a] section 1332 state plan should foster health coverage through competitive private coverage, including AHPs and STLDI plans.” 83 Fed. Reg. at 53,577 (emphasis added). The Administration subsequently supplemented that guidance with a discussion paper that describes a series of “concepts” for waivers that states
146 CMS, Guidance, State Relief and Empowerment Waivers, 83 Fed. Reg. 53,575 (Oct. 24, 2018).
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could seek, including waivers by which a state could authorize—and potentially subsidize—the sale of the very medically-underwritten plans that the ACA’s protections prohibit.147
128. By issuing the guidance, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least three ways. First, the guidance cannot be squared with the ACA’s text, structure, or purpose. Second, and relatedly, the guidance will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And third, the guidance will result in weaker health insurance markets and increased premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
5. Attempting to Weaken Public Confidence in ACA Exchanges 129. Statements by President Trump and others in his Administration confirm that the driving force behind all of the Administration’s actions described here is to sabotage the Affordable Care Act. As exemplified by the statements catalogued above, see supra ¶¶ 44-48, the Trump Administration has been relentless in its efforts to paint a false picture of the Act as failing—or even, in President Trump’s words at a meeting of his Cabinet, as already “dead. It’s gone. It’s no longer—you shouldn’t even mention [it]. It’s gone. There is no such thing as Obamacare anymore.”148 The number of times that President Trump and others in his
147 CMS, Section 1332 State Relief and Empowerment Waiver Concepts: Discussion Paper (Nov. 29, 2018), https://www.cms.gov/CCIIO/Programs-and-Initiatives/State-InnovationWaivers/Downloads/Waiver-Concepts-Guidance.PDF. 148 Remarks by President Trump in Cabinet Meeting, The White House (Oct. 16, 2017), available at https://web.archive.org/web/20171016180503/https://www.whitehouse.gov/thepress-office/2017/10/16/remarks-president-trump-cabinet-meeting.
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Administration have called “Obamacare . . . a disaster” can barely be counted.149 The President has even gone so far as to assert that “ObamaCare is torturing the American People.”150 Vice President Mike Pence has called Obamacare a “nightmare.”151
130. It would be one thing if the Administration’s only goal were to build public opposition to the Act, but that is not the case. Rather, the Administration’s communications strategy is aimed at creating a false public impression about the ACA and reducing public confidence in the law and its exchanges, thereby discouraging individuals from enrolling in ACA-compliant insurance and weakening the exchanges. In March 2017, for example, HHS launched an official website alleging “skyrocketing premiums and narrowing choices” in ACA exchanges and asserting that the ACA “has done damage to” the market for individual insurance and “created great burdens for many Americans.”152 An official WhiteHouse.gov page likewise proclaims that “Obamacare is hurting American families, farmers, and small businesses with
149 See, e.g., Jacqueline Thomsen, Trump Vows to Repeal and Replace ObamaCare ‘Disaster’, The Hill, Nov. 23, 2017, http://thehill.com/homenews/administration/361693-trump-vows-torepeal-and-replace-obamacare-disaster; Jay Willis, President Trump Couldn’t Repeal the Affordable Care Act, So He’s Trying to Sabotage It Instead, GQ, Sept. 1, 2017, https://www.gq.com/story/trump-sabotage-obamacare-marketing (collecting examples). 150 @realDonaldTrump, Twitter (July 25, 2017, 6:38 AM), https://twitter.com/realdonaldtrump/status/889796918615920640. 151 Juliet Eilperin et al., White House’s Decision to Atop ACA Cost-sharing Subsidies Triggers Strong Opposition, Washington Post, Oct. 13, 2017, https://www.washingtonpost.com/politics/white-house-tells-court-it-is-immediately-stoppingaca-cost-sharing-subsidies/2017/10/13/4c404234-b01d-11e7-be94fabb0f1e9ffb_story.html?noredirect=on&undefined=&utm_term=.2cc7c1747873&wpisrc=nl_m ost&wpmm=1. 152 Providing Relief Right Now for Patients, HHS, https://www.hhs.gov/healthcare/empoweringpatients/providing-relief-right-now-for-patients/index.html.
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skyrocketing health insurance costs.”153 And HHS press officials have labored to paint a picture
of the ACA as “continu[ing] to collapse” and as having “been in a death spiral for years.”154
131. Less visibly, recent reports from the Sunlight Foundation have documented how
HHS has systematically removed information about the ACA from its websites.155 Worse,
Senators Schatz, Booker, and Murphy, “concerned that the use of appropriated funds to promote
legislation pending before Congress” to repeal the ACA “violate both HHS’s constitutional
responsibility to implement existing law, and legal prohibitions against using taxpayer dollars to
lobby in favor of pending legislation,” have collected numerous examples where HHS social
media accounts published “anti-ACA propaganda.”156 For example, then-Secretary of HHS Tom
Price tweeted videos that his agency produced to discredit the Act, see infra ¶ 152, with an
explicit admonition discouraging enrollment, commenting that “[u]nder Obamacare, coverage ≠
care.”157 Sec. Price also adorned social media posts featuring anti-ACA infographics with official
153 Healthcare, The White House, https://www.whitehouse.gov/issues/healthcare/. 154 Dan Mangan, Trump’s Health Chief Pushes ‘Waivers’ for States from Obamacare Rules, as HHS Says Program in ‘Death Spiral’, CNBC, May 16, 2017, https://www.cnbc.com/2017/05/16/trumps-health-chief-pushes-waivers-for-states-fromobamacare-rules.html. 155 See Rachael Bergman, Affordable Care Act Page Quietly Removed from Medicare Website, Sunlight Foundation, May 17, 2018, https://sunlightfoundation.com/2018/05/17/affordable-careact-page-quietly-removed-from-medicare-site/; Rachel Bergman, Removal of the Affordable Care Act Website from within Medicaid.gov, Sunlight Foundation (July 2018), http://sunlightfoundation.com/wp-content/uploads/2018/07/AAR-7-CMS-Medicaid-ACA180710.pdf; see also Dan Diamond, Trump Policy Shop Filters Facts to Fit His Message, Politico, July 28, 2018, https://www.politico.com/story/2018/07/28/trump-facts-policy-shopadministration-research-714353. 156 Letter from Sen. Brian Schatz et al. to Thomas E. Price, former HHS Secretary, at 1 (July 21, 2017), https://www.schatz.senate.gov/imo/media/doc/7.21.17%20Schatz-BookerMurphy%20Letter%20to%20Sec.%20Price.pdf. 157 Id. at 5 (reproducing @SecPriceMD, Twitter (June 7, 2017, 4:42 PM), https://twitter.com/secpricemd/status/872554390506360833); see id. at 6-8 (reproducing additional examples).
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government logos.158 Such activities constitute impermissible uses of government funds; they also exemplify how, rather than faithfully implement the ACA, the Trump Administration has endeavored to undermine it.
132. By working to weaken public confidence in the ACA and its exchanges, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, declining public confidence in the ACA’s insurance markets will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, declining public confidence will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
Working to Decrease Enrollment 133. Under the ACA, exchanges must “facilitate[] the purchase of qualified health plans.” 42 U.S.C. § 18031(b)(1)(a). Defendants, however, have shirked this duty in multiple ways, as detailed below, including by slashing funding for advertising and outreach and cutting in half the length of time during which federally-facilitated exchanges are open for enrollment. 134. As further discussed below, the Administration’s efforts to discourage enrollment are having effects. One study has found that two of the decisions at issue here—shortening open
158 Id. at 1, 9. See generally Audrey Carlsen & Haeyoun Park, The Same Agency That Runs Obamacare Is Using Taxpayer Money to Undermine It, New York Times, Sept. 4, 2017, https://www.nytimes.com/interactive/2017/09/04/us/hhs-anti-obamacare-campaign.html (collecting and displaying examples of anti-ACA videos, Twitter posts, infographics, and press releases publicized by Defendants, and citing instances where Defendants deleted materials from government websites that provided information about the Act).
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enrollment and reducing outreach—may result in as much as a 9 percent increase in premiums.159
1. Shortening Open Enrollment 135. As described above, the ACA requires HHS to establish “annual open enrollment periods” during which individuals, via the exchanges, can enroll in new or different health insurance coverage for the coming year. 42 U.S.C. § 18031(c)(6)(B). Outside of open enrollment, individuals may enroll in coverage through an exchange only if they qualify for a special enrollment period, see id. § 18031(c)(6)(C), based on certain life events like getting married, having a baby, or losing other health coverage. The opportunity to buy insurance through the exchange is generally limited to established open enrollment periods in order to minimize adverse selection. If consumers could buy health insurance through an exchange at any time throughout the year, they could wait until they got sick to purchase insurance and drop it once they recover. 136. The open enrollment period for 2016 plans ran from November 1, 2015 through January 31, 2016.160 Likewise, the open enrollment period for 2017 plans ran from November 1, 2016 through January 31, 2017.161
159 Covered California, Individual Markets Nationally Face High Premium Increases in Coming Years Absent Federal or State Action, With Wide Variation Among States 3 (Mar. 8, 2018), http://hbex.coveredca.com/data-research/library/CoveredCA_High_Premium_Increases_3-818.pdf [hereinafter March 2018 Covered California Study]. 160 2016 Marketplace Open Enrollment Period Public Use Files, CMS, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-andReports/Marketplace-Products/2016_Open_Enrollment.html. 161 CMS, Health Insurance Marketplaces 2017 Open Enrollment Period Final Enrollment Report: November 1, 2016 - January 31, 2017 (Mar. 15, 2017), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2017-Fact-Sheetitems/2017-03-15.html.
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137. In April 2017, however, the Trump Administration announced that it was cutting the open enrollment period for 2018 plans in half compared to prior years, setting it to run from November 1, 2017 through December 15, 2017.162 Shortly thereafter, President Trump tweeted that “ObamaCare is in serious trouble” and that “it dies far sooner than anyone would have thought.”163
138. In addition, HHS told community groups that the federal health insurance exchange, HealthCare.gov, would be subject to “[p]lanned” “[d]owntime” during the open enrollment period for 2018 plans, for an “[o]vernight outage on Wednesday, November 1, 2017”; and on “Sundays [from] 12am-12pm ET, except on December 10, 2017”164—a significant increase in downtime from prior years. While the actual downtime for the open enrollment period for 2018 plans proved less than what had been announced, that fact was not communicated, which may have been discouraged enrollment during the times slated for outages. The Administration announced a maintenance schedule for the open enrollment period for 2019 plans similar to that which it had announced for the open enrollment period for 2018 plans.165
162 CMS, Patient Protection and Affordable Care Act; Market Stabilization, 82 Fed. Reg. 18,346, 18,353-54 (Apr. 18, 2017); see 45 C.F.R. § 155.410(e). 163 @realDonaldTrump, Twitter (Apr. 23, 2017, 7:20 AM), https://twitter.com/realDonaldTrump/status/856150719656755200. 164 @philgalewitz, Twitter (Sept. 22, 2017, 12:06 PM), https://twitter.com/philgalewitz/status/911305725154140163/photo/1?ref_src=twsrc%5Etfw&; see Phil Galewitz, Sunday Hours: Obamacare Website To Be Shut Down For Portion of Most Weekends, Kaiser Health News (Sept. 22, 2017), https://khn.org/news/hhs-to-close-insuranceexchange-for-12-hours-on-sundays-during-enrollment/. 165 Peter Sullivan, Trump Officials Plan Maintenance Downtime for healthcare.gov During ObamaCare Sign-ups, The Hill, Oct. 9, 2018, https://thehill.com/policy/healthcare/410574trump-officials-plan-maintenance-downtime-for-healthcaregov-during.
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139. HHS has claimed that shortening the open enrollment period will reduce adverse
selection. 82 Fed. Reg. at 18,353-54. However, HHS has not cited any evidence to show that
prior open enrollment periods enabled adverse selection, or that shortening the period will reduce
it. Indeed, experts have found weekly enrollment data inconclusive as to “whether longer
enrollment windows increase risk for health insurers through adverse selection or decrease risk
by providing greater opportunities for enrollment by so-called ‘healthy procrastinators.’”166 Still,
these experts concluded that “reducing the length of the open enrollment period in 2018 may
cause as much or more harm for consumers (e.g., reduced plan switching among re-enrollees,
lower enrollment among those eligible but previously uninsured) than any potential reduction in
adverse selection for insurers.” Id. And there is broad consensus that later enrollees are,
generally speaking, younger and healthier than earlier enrollees.167
140. There can be no doubt that the Administration’s decision to shorten the 2018
enrollment period for FFEs made it more difficult for people to obtain health insurance. Unlike
the federal government, nine state-based exchanges opted to maintain a longer 2018 open
enrollment period than the Administration set for HealthCare.gov. Providing extra time for
166 Paul Shafer & Stacie Dusetzina, Looking Ahead To 2018: Will A Shorter Open Enrollment Period Reduce Adverse Selection In Exchange Plans?, Health Affairs Blog, Apr. 14, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170414.059663/full/. 167 See id.; Express Scripts, Exchange Pulse: Public Health Exchange and Off-Exchange Report 2 (Oct. 2014), http://lab.express-scripts.com/lab/insights/governmentprograms/~/media/68c6ed3d98db484bbb9ac557acafa9de.ashx (finding that those who enroll later during open enrollment periods are, “on average, 4 years younger than early enrollees,” and that they “also have a lower prevalence of chronic conditions, such as heart disease, depression, high cholesterol and diabetes, and a lower prevalence of specialty conditions, such as cancer and multiple sclerosis”); see also Virgil Dickson, Market Stabilization Rule Could Collapse the ACA Exchanges, Modern Healthcare, Apr. 14, 2017, http://www.modernhealthcare.com/article/20170414/NEWS/170419910 (surveying experts and concluding that shortening open enrollment will disproportionately affect low-income individuals and limit participation in ACA-compliant plans).
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people to sign up for coverage is but one example of actions SBEs have taken that have resulted in increased enrollment and lower premiums there as compared to in FFEs.168
141. Even after witnessing the consequences of shortening open enrollment for 2018, Defendants elected to do so again for 2019, to much the same effect. As detailed below, Defendants’ decision, combined with their cuts to funding for outreach and assistance and their many other sabotage actions, caused open enrollment to decline in 2019. See infra ¶¶ 194-95.
142. By cutting open enrollment in half, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, cutting open enrollment will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, by decreasing health insurance enrollments, and in particular by decreasing enrollments among younger and healthier populations, cutting open enrollment will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
2. Cutting Funding for Advertising and Refusing to Publicize Open Enrollment
143. In keeping with the exchanges’ duty to facilitate enrollment, HHS regulations specify that they “must conduct outreach and education activities . . . to educate consumers about
168 Mark A. Hall & Michael J. McCue, Health Insurance Markets Perform Better in States That Run Their Own Marketplaces, To the Point, Mar. 7, 2018, https://www.commonwealthfund.org/blog/2018/health-insurance-markets-perform-better-statesrun-their-own-marketplaces; see Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 4, 9, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-andStrenghtening-the-Individual-Health-Insurance-Market2.pdf.
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the Exchange and insurance affordability programs to encourage participation.” 45 C.F.R.
§ 155.205(e).
144. In order to comply with this obligation for federally-facilitated exchanges, HHS
has, in the past, funded advertising campaigns. In 2016, for example, HHS spent $100 million on advertising to educate consumers about, and promote their enrollment in, health insurance.169
145. So far, President Trump and his Administration have drastically reduced funding
for such advertising—twice.
146. First, on January 26, 2017—in the waning days of that year’s open enrollment
period—the Administration overruled the objections of career staff and “pull[ed] the plug on all
Obamacare outreach and advertising in the crucial final days of the 2017 enrollment season,” cutting funding by $5 million.170 Individuals could still sign up through the January 31, 2017 deadline, but the Administration decided not to “advertis[e] that fact any longer.”171
Subsequently, the Office of the Inspector General at HHS determined that the Administration’s actions resulted in $1.1 million in unrecoupable costs.172 More importantly, the advertising cuts resulted in fewer enrollments—to the tune of 350,000.173 Fewer enrollments mean higher
169 Timothy Jost, CMS Cuts ACA Advertising by 90 Percent Amid Other Cuts to Enrollment Outreach, Health Affairs Blog, Aug. 31, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170901.061790/full/. 170 Paul Demko, Trump White House Abruptly Halts Obamacare Ads, Politico, Jan. 26, 2017, http://www.politico.com/story/2017/01/trump-white-house-obamacare-ads-234245. 171 Id. 172 HHS, Office of the Inspector General, Review of The Department of Health and Human Services Cancellation of Marketplace Enrollment Outreach Efforts, OEI-12-17-00290 at 5, https://oig.hhs.gov/oei/reports/oei-12-17-00290.pdf. 173 See Joshua Peck, Trump Blocked Nearly 500,000 People From Getting Coverage, Medium, Feb. 2, 2017, https://medium.com/get-america-covered/trumped-blocked-nearly-500-000-peoplefrom-getting-coverage-70317eedaaa4; Charles Gaba, UPDATED: Want Evidence Trump Killing HC.gov Ads Hurt Enrollment? Check This Out., Feb. 3, 2017,
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premiums. Indeed, the same day his Administration cut ACA advertising by $5 million,
President Trump again promised an ACA “explosion” and that “[n]obody’s going to be able to
afford” healthcare under the law.174
147. Second, on August 31, 2017, CMS announced that for the open enrollment period
that was slated to commence on November 1, 2017, it planned to spend only $10 million on
advertising, a 90 percent cut from the prior year.175 CMS further specified that it would “target
its advertising and outreach activities . . . through digital media, email, and text messages,” at the
expense of television advertising.176 Shortly after they were announced, Joshua Peck, who
previously had led such outreach efforts, estimated that CMS’s cuts to advertising would result
in at least 1.1 million fewer enrollments.177
148. In justifying its drastic cuts to advertising, Administration officials “pointed to the
fact that for 2017, even as spending on ads rose, enrollment ended up lower.”178 But as press
http://acasignups.net/17/03/16/updated-want-evidence-trump-killing-hcgov-ads-hurt-enrollmentcheck-out. 174 Transcripts: Trump Addresses GOP Leadership at Retreat in Philadelphia, CNN (Jan. 26, 2017), http://transcripts.cnn.com/TRANSCRIPTS/1701/26/wolf.02.html. 175 CMS, Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period 1 (Aug. 31, 2017), https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/Downloads/Policies-Related-Navigator-ProgramEnrollment-Education-8-31-2017.pdf [hereinafter “HHS Aug. 31, 2017 Announcement”]; see Timothy Jost, CMS Cuts ACA Advertising by 90 Percent Amid Other Cuts to Enrollment Outreach, Health Affairs Blog, Aug. 31, 2017, http://www.healthaffairs.org/do/10.1377/hblog20170901.061790/full/. 176 HHS Aug. 31 2017 Announcement, supra n.175, at 1. 177 Joshua Peck, Trump’s Ad Cuts Will Cost a Minimum of 1.1 Million Obamacare Enrollments, Medium, Oct. 23, 2017, https://medium.com/get-america-covered/trumps-ad-cuts-will-cost-aminimum-of-1-1-million-obamacare-enrollments-9334f35c1626. 178 Zachary Tracer & Anna Edney, Trump Guts Budget for Obamacare Ads, Bloomberg, Aug. 31, 2017, https://www.bloomberg.com/news/articles/2017-08-31/trump-health-department-issaid-to-slash-obamacare-ad-budget.
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reports pointed out, and as described above, “The Trump [A]dministration . . . withdrew about $5 million of ads at the end of the 2017 sign-up period, which likely contributed to the enrollment decline.”179
149. The Administration has slashed advertising funding and emphasized digital over television-based marketing notwithstanding that—or because—evidence known to HHS demonstrates that robust advertising, and television advertising in particular, is critical to fulfilling the ACA’s goal of increasing enrollments in health insurance coverage.180 Indeed, starting in 2015, CMS undertook randomized control trials and econometric modeling to measure the effectiveness of paid promotional activities and by 2017 concluded that paid outreach was responsible for 40 percent of all enrollments.181 The agency further found that television ads were “the number one driver of enrollment.”182
150. That finding aligns with a study of the effectiveness of advertising in promoting enrollment on Kentucky’s Exchange, which found that cuts in advertising during the 2016 open enrollment period led to “450,000 fewer page views . . . and 20,000 fewer unique visitors per week” to Kentucky’s state-based marketplace.183
179 Id. 180 See id. 181 Lori Lodes, I Ran ACA Outreach Under Obama. Trump’s Funding Cuts Could Ruin the Health Care Law, Vox, Sept. 15, 2017, https://www.vox.com/the-bigidea/2017/9/12/16294784/aca-outreach-advertising-sabotage-funding. 182 Id. 183 Paul Shafer et al., Advertising Cutbacks Reduce Marketplace Information-seeking Behavior: Lessons From Kentucky for 2018, Incidental Economist, Sept. 2, 2017, http://theincidentaleconomist.com/wordpress/advertising-cutbacks-reduce-marketplaceinformation-seeking-behavior-lessons-from-kentucky-for-2018/.
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151. Studies also found that the increased volume of television advertisement during
the 2014 open enrollment period contributed to increased enrollment and a substantial reduction in the uninsured rate.184 States and exchanges that have engaged in their own marketing efforts
similarly report higher enrollment and more stable insurance markets: Covered California reports
that its marketing investment has yielded a healthier risk pool, premiums that are 6 to 8 percent lower, and greater insurer participation.185
152. President Trump and his Administration have not only dramatically reduced
overall funding for advertising under the Affordable Care Act, but also have gone so far as to
produce ads that impugn the law and its reforms. In June 2017, HHS produced and posted 23
video testimonials “from people who said they had been ‘burdened by Obamacare,’ including families, health care professionals and small business owners.”186 “While it’s not certain where
the money for the videos came from, several former health officials who worked in the Obama
Administration said that they suspect it came from the budget meant to promote the Affordable Care Act.”187 And when an individual featured in one of the videos “sat down for a recording at
184 Pinar Karaca-Mandic et al., The Volume of TV Advertisements During the ACA’s First Enrollment Period Was Associated with Increased Insurance Coverage, Health Affairs (Apr. 2017), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2016.1440?journalCode=hlthaff; Sarah E. Gollust et al., TV Advertising Volumes Were Associated With Insurance Marketplace Shopping And Enrollment In 2014, Health Affairs (June 2018), https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2017.1507. 185 Peter V. Lee et al., Marketing Matters: Lessons from California to Promote Stability and Lower Costs in National and State Individual Insurance Markets, Covered California (Sept. 2017), http://hbex.coveredca.com/data-research/library/CoveredCA_Marketing_Matters_917.pdf. 186 Audrey Carlsen & Haeyoun Park, The Same Agency That Runs Obamacare Is Using Taxpayer Money to Undermine It, New York Times, Sept. 4, 2017, https://www.nytimes.com/interactive/2017/09/04/us/hhs-anti-obamacare-campaign.html?_r=0. 187 Id.
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the HHS studio he said it ‘felt like they were pushing for a harder line against Obamacare’ than he was delivering.”188
153. Finally, when open enrollment for plan year 2018 began on November 1, 2017, neither HHS nor CMS even issued a press release, and the Twitter feeds of the agencies and of their leadership were silent, in stark contrast to the prior year’s intense push. Such silence is part of a pattern: as described above, through multiple changes to its own websites, HHS has endeavored to reduce access to information about the ACA.189 And Administration officials have indicated that they do not want to promote ACA-compliant plans.
154. These actions do not simply represent a choice to spend resources in other ways; the Administration’s own statements show that they were acting to frustrate the goals of the ACA. Underscoring this is the fact that in the very year that the Administration shortened open enrollment, it decreased outreach. By slashing spending on ACA advertising, producing ads designed to criticize the law, and refusing to publicize open enrollment, Defendants have violated their constitutional obligation to take care that the law is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least three ways. First, the Administration’s advertising choices contradict the requirements of the Act and of its implementing regulations concerning education and outreach. 42 U.S.C. § 18031(b)(1)(a); 45 C.F.R. § 155.205(e). Second, the Administration’s advertising choices are resulting in fewer individuals receiving health insurance coverage, directly
188 Sam Stein, Team Trump Used Obamacare Money to Run PR Effort Against It, Daily Beast, July 20, 2017, https://www.thedailybeast.com/team-trump-used-obamacare-money-to-run-adsagainst-it. 189 See Charles S. Clark, Report: How HHS Buried Information About the Affordable Care Act, Government Executive (May 17, 2018), https://m.govexec.com/oversight/2018/05/report-howhhs-buried-information-about-affordable-care-act/148283/.
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undermining the Act’s goal.190 And third, by decreasing health insurance enrollments— particularly among healthier people—the Administration’s advertising choices have weakened health insurance markets, which ultimately will lead to even fewer individuals being able to access affordable health care coverage.
3. Cutting Funding for Navigators and Encouraging Them to Undermine the Act
155. Twice—in 2017 and 2018—the Trump Administration has drastically cut funding for Navigators working in federally-facilitated exchanges. With its latest round of funding cuts, the Administration has gone even further, commandeering Navigators in its sabotage agenda by requiring them to compete for funding according to how enthusiastically they plan to advertise the availability of non-ACA compliant coverage—i.e., according to their willingness to assist the Administration in siphoning consumers away from the exchanges and convincing them to purchase inferior coverage. These decisions exemplify the Administration’s failure to take care to faithfully execute the ACA.
156. As explained above, the ACA requires exchanges to award grants to Navigators, 42 U.S.C. § 18031(i), who must maintain a current understanding of available health insurance options, conduct public education and awareness campaigns, help consumers understand their choices, facilitate consumers’ health insurance decisions, and ensure their access to consumer protections, see id. § 18031(i)(3); 45 C.F.R. §§ 155.210, 155.215. To ensure that exchanges run by the federal government comply with the requirement that all exchanges establish Navigator
190 Ashley Semanskee et al., Individual Insurance Market Performance in Early 2018, Kaiser Family Foundation (June 26, 2018), https://www.kff.org/private-insurance/issuebrief/individual-insurance-market-performance-in-early-2018/ (finding that these “recent policy changes,” among others, “have the potential to destabilize the individual market generally”).
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programs, see, e.g., 42 U.S.C. §§ 18031(d)(4)(K), 18031(i)(1); 45 C.F.R. §§ 155.205(d)(1),
155.210(a), HHS enters into cooperative agreements with Navigators.191
157. In the ACA, Congress recognized the importance of expert assistance, both to
individuals and for the functioning of the exchanges. Navigators play vitally important roles at
every step, from helping consumers make informed health insurance decisions to facilitating
their applications and enrollment, thereby contributing to the success of the exchanges—and of
the Act itself—overall. For example, one study concluded that “[t]he strongest overall predictor
of completing the [insurance] application process was receiving assistance from a [N]avigator or
social worker.”192 Additional research has documented that Hispanic and low-income individuals
disproportionately rely on direct assistance from Navigators and other entities when making
health insurance coverage decisions.193 Other experts have established the importance of the
broad range of Navigators’ duties for consumers and for exchanges.194
191 See, e.g., HHS, Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Marketplaces, Funding Opportunity No. CA-NAV-15-001 (Apr. 15, 2015) https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarketplaces/Downloads/Navigator_2015_FOA_FINAL_04_15_2015.pdf [hereinafter 2015 FOA]; see generally In-Person Assistance in the Health Insurance Marketplaces, CMS, https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-InsuranceMarketplaces/assistance.html (describing the “FFE Navigator program”). 192 Benjamin D. Sommers et al., The Impact of State Policies on ACA Applications and Enrollment Among Low-Income Adults in Arkansas, Kentucky, and Texas, 34 Health Affairs 1010 (July 2018), https://dash.harvard.edu/handle/1/25156070. 193 See Fredric Blavin et al., Obtaining Information on Marketplace Health Plans: Websites Dominate but Key Groups Also Use Other Sources, Urban Institute Health Policy Center (June 9, 2014), http://hrms.urban.org/briefs/obtaining-information-on-marketplace.html. 194 See Tricia Brooks & Jessica Kendall, Designing Navigator Programs to Meet the Needs of Consumers: Duties and Competencies, Georgetown University Health Policy Institute (Sept. 2012), http://files.www.cmhnetwork.org/news/navigator-grants/Navigator-Programs-Duties-andCompetencies.pdf.
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158. When issuing the 2015 Funding Opportunity Announcement, HHS estimated that
it “expect[ed] to award up to $201,000,000 over the three-year project period and up to
$67,000,000 during the first 12-month budget period.” 2015 FOA, supra n.191, at 11. Indeed, in
2015, HHS reported awarding $67 million in grants under the FFE Navigator program.195 And in
2016, HHS reported issuing continuation awards totaling “over $62.5 million” under the
program.196
159. Until late summer 2017, final preparations were underway to fund the HHS
Navigator program at a similar level for the 2018 open enrollment—$60 million.197
160. Final preparations were also underway until late summer 2017 to allocate funding
for the 2018 open enrollment according to the process and criteria described in the 2015 FOA. In
a memo signed on August 23, 2017, agency staff explained that individual grantees’ continuation
award amounts for 2017 had been calculated “based on performance evaluations conducted by
195 Press Release, CMS, CMS Awards $67 Million in Affordable Care Act Funding to Help Consumers Sign-up for Affordable Health Insurance Marketplace Coverage in 2016 (Sept. 2, 2015), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Pressreleases-items/2015-09-02.html. 196 Randy Pate, Director, Center for Consumer Information and Insurance Oversight (“CCIO”), Policies Related to the Navigator Program and Enrollment Education for the Upcoming Enrollment Period (Aug. 31, 2017), https://www.cms.gov/CCIIO/Programs-andInitiatives/Health-Insurance-Marketplaces/Downloads/Policies-Related-Navigator-ProgramEnrollment-Education-8-31-2017.pdf. 197 See Memorandum from Randy Pate, Director, CCIIO, to Janet Loftus, Director, Division of Accounting Operations, CMS, regarding Patient Protection and Affordable Care Act— Cooperative Agreement Funds (dated Aug. 24, 2017; stamped Aug. 31, 2017), http://acasignups.net/17/09/04/exclusive-i-believe-whats-called-scoop (confirming that $60 million was appropriated on August 31, 2017); Memorandum from Gian Johnson, Acting Director, Division of Assister Programs, Consumer Support Group, CCIIO, to Jennifer Beeson, Director, Consumer Support Group, CCIIO, regarding Funding and Decision Memo- Request for Approval to Award Year 3 Funding for Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Exchanges 2 (signed Aug. 23, 2017), http://acasignups.net/17/09/04/exclusive-i-believe-whats-called-scoop [hereinafter Aug. 23, 2017 Memo] (“The Navigator program received $60 million for grant awards in FY 2017….”).
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[CMS project officers] and [CMS regional office liaisons],” which were based on the “performance factors outlined in the 2015 FOA” and grantees’ “progress toward the goals outlined in their 2016 Non-Competing Continuation Application.”198
161. But at the direction of political appointees at the agency, HHS abruptly changed course. In an August 31, 2017 announcement, HHS announced an entirely “new funding formula”—nowhere to be found in the operative 2015 FOA, nor in the relevant statutes or regulations—whereby “Navigator grantees will receive funding based” solely “on their ability to meet their enrollment goals during the previous year.” HHS Aug. 31, 2017 Announcement, supra n.175, at 1. “For example, a grantee that achieved 100 percent of its enrollment goal for plan year 2017 will receive the same level of funding as last year, while a grantee that enrolled only 70 percent of its enrollment goal would receive 70 percent of its previous year funding level, a reduction of 30 percent.” Id.
162. Although HHS announced its new funding formula one day before the thencurrent budget period expired, on September 1, 2017, the agency waited almost two weeks, until September 13, 2017, to issue notices of awards to grantees under its new funding formula. Accordingly, because “[e]ntities and individuals cannot serve as federally certified Navigators without receiving federal grant funding to perform Navigator duties,” 2015 FOA, supra n.191, at 7, by delaying issuance of notices of award until September 13, 2017, HHS eliminated Navigator programs in FFEs from September 2-12, 2017, further violating the ACA’s requirements.
198 Aug. 23, 2017 Memo, supra n.197, at 2.
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163. HHS’s 2017 funding formula resulted in a nearly 40 percent decrease in overall funding for the FFE Navigator program, to about $36 million.199 Some individual Navigators saw cuts as high as 92 percent.200
164. The U.S. Government Accountability Office (“GAO”) found that HHS’s funding
decision was based on unreliable data that may not have accurately reflected the Navigator groups’ performance.201 In particular, the GAO pointed to HHS’s prior acknowledgment that it
was impossible to accurately determine how many individuals each Navigator group enrolled, in
part because Navigators did not consistently enter their unique identification numbers into applications during the 2017 open enrollment period.202 Additionally, the GAO found that HHS
and the Navigator groups likely interpreted enrollment goals differently and that HHS’s
interpretation may have underrepresented Navigators’ performance. HHS interpreted the goal as
the number of individuals Navigators planned to enroll in ACA-compliant plans. However, at
least some Navigators interpreted the goal more broadly to include the array of ways that
199 See Robert King, Trump Cuts Obamacare Ad Budget By 90 Percent, Washington Examiner, Aug. 31, 2017, http://www.washingtonexaminer.com/trump-cuts-obamacare-ad-budget-by-90percent/article/2633128; Press Release, CMS, CMS Announces New Funding Opportunity Announcement for the Federally-Facilitated Exchange Navigator Program (July 10, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releasesitems/2018-07-10-2.html. 200 See Juliet Eilperin & Amy Goldstein, HHS Slashes Funding to Groups Helping ACA Consumers Enroll by up to 92 Percent, Washington Post, Sept. 14, 2017, https://www.washingtonpost.com/national/health-science/hhs-slashes-funding-to-some-acanavigator-groups-by-more-than-60-percent/2017/09/14/729c394c-9957-11e7-b5693360011663b4_story.html?utm_term=.f7910e0bc711. 201 GAO-18-567, Health Insurance Exchanges: HHS Should Enhance Its Oversight of Open Enrollment Performance, U.S. Government Accountability Office 23 (July 2018), https://www.gao.gov/assets/700/693362.pdf [hereinafter July 2018 GAO Report]. 202 Id. at 27.
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Navigators assist consumers, and therefore set higher goals in 2017 than they otherwise would have, resulting in a decrease in their 2018 funding.
165. But HHS’s 2017 cuts to Navigator funding pale in comparison to those the agency announced in 2018. On July 10, 2018, HHS released a new funding opportunity announcement for the FFE Navigator program and stated that it “expect[ed] to award up to $10 million”203— merely one-fourth the amount of funding provided for the prior year, and one-sixth the amount of funding provided for the year before that. Notwithstanding Navigators’ important place in the ACA’s statutory scheme and their vital role in facilitating enrollment, HHS has unlawfully arrogated to itself the authority to decide that their services are no longer important.204
166. Yet drastically reducing Navigator funding in FFEs was not enough. HHS also instructed applicants to compete for the limited funding available by “demonstrat[ing] how they provide information to people who may be unaware of the range of available coverage options in addition to qualified health plans . . . such as association health plans, short-term, limitedduration insurance, and health reimbursement arrangements.”205 This means that Navigators now use funds that Congress designated to support the ACA for the opposite purpose—to undermine it. The Act is clear: Navigators must “conduct public education activities to raise awareness of the availability of qualified health plans,” “distribute fair and impartial information concerning enrollment in qualified health plans,” and “facilitate enrollment in qualified health plans.” 42 U.S.C. § 18031(i)(3) (emphasis added). HHS’s decision to incentivize Navigators to push plans
203 CMS, Press Release, CMS Announces New Funding Opportunity Announcement for the Federally-Facilitated Exchange Navigator Program (July 10, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releasesitems/2018-07-10-2.html. 204 See id. 205 Id.
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designed to siphon consumers away from ACA exchanges, thus weakening them, does not faithfully implement the ACA but rather undermines it.
167. By slashing funding for Navigators and encouraging them to advertise non-ACA compliant plans, Defendants have violated their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have purposefully undermined the Act—the aim of which is to expand access to quality coverage—in at least two ways. First, reducing funding for Navigators will result in fewer individuals receiving ACA-compliant health insurance coverage overall, directly undermining the Act’s goal. And second, by decreasing health insurance enrollments, reducing funding for Navigators will weaken health insurance markets and increase premiums, ultimately resulting in even fewer individuals being able to access affordable health care coverage.
4. Failing to Set Numeric Enrollment Targets for 2018 and 2019 168. In 2017, HHS declined to establish enrollment targets for the 2018 open enrollment period. In prior years, HHS set overall and regional numeric targets in order to monitor enrollment progress during open enrollment, and focus and revise outreach efforts.206 The GAO found that failing to set enrollment targets for 2018 hampered HHS’s ability to measure its performance and make critical decisions about how to use resources to facilitate enrollment.207 169. Despite the GAO’s finding, and explicit recommendation that HHS resume the practice of setting numeric enrollment targets, HHS again failed to set any enrollment targets for the 2019 open enrollment period.
206 July 2018 GAO Report, supra n.201, at 37. 207 Id.
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170. By failing to set enrollment targets for HealthCare.gov, Defendants have violated
their constitutional obligation to take care that the ACA is faithfully executed. Rather, they have
purposefully undermined the Act—the aim of which is to expand access to quality coverage—by
failing to track enrollment progress and target outreach activities during open enrollment periods.
5. Refusing to Participate in Enrollment Events and Other Outreach
171. To effectuate the ACA’s education and outreach mandates, see, e.g., 42 U.S.C.
§ 18031(b)(1)(a); see also 45 C.F.R. § 155.205(e), in prior years HHS officials participated in
enrollment events around the country.208 That changed dramatically in 2017. During that
summer, the Trump Administration ended contracts that provided outreach, and that brought
enrollment assistance to libraries, businesses, and urban neighborhoods, in 18 cities.209 The
Administration stopped coordinating enrollment efforts with the Latino Affordable Care Act
Coalition, a group of local and national organizations that assisted with every previous open
enrollment period,210 and a number of other organizations as well.211 The Administration stopped
sending staff to regional enrollment events.212 After being informed that HHS would no longer
208 Kate Nocera & Paul McLeod, The Trump Administration Is Pulling Out Of Obamacare Enrollment Events, Buzzfeed, Sept. 27, 2017, https://www.buzzfeed.com/katenocera/the-trumpadministration-wont-support-state-obamacare. 209 Carla K. Johnson, Trump Administration Ends Affordable Care Act Assistance Contracts in 18 Cities, PBS NewsHour, July 20, 2017, https://www.pbs.org/newshour/health/trumpadministration-ends-affordable-care-act-assistance-contracts-18-cities. 210 Alice Ollstein, Trump Admin Abandons Latino Outreach For Obamacare Sign-Ups, Talking Points Memo, Aug. 10, 2017, https://talkingpointsmemo.com/dc/trump-hhs-abandons-latinooutreach-on-obamacare. 211 Allice Ollstein, Trump HHS Severs Key Partnerships For Obamacare Outreach, Talking Points Memo, Aug. 14, 2017, https://talkingpointsmemo.com/dc/trump-hhs-obamacarepartnerships-promotion-sabotage. 212 Dylan Scott, Trump Administration Abruptly Drops out of Obamacare Events in Mississippi, Vox, Sept. 27, 2017, https://www.vox.com/policy-and-politics/2017/9/27/16374158/obamacaremississippi-hhs-events; see Kate Nocera & Paul McLeod, The Trump Administration Is Pulling Out Of Obamacare Enrollment Events, Buzzfeed, Sept. 27, 2017,
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participate in such events, at least one group that had previously sponsored such events, and that
had planned to hold such events, decided to cancel them.213 Once again, the Administration’s
actions fit a pattern of reducing support for enrollment initiatives.”214
172. By cutting back on enrollment events and other outreach, Defendants have
violated their constitutional obligation to take care that the ACA is faithfully executed. Rather,
they have purposefully undermined the Act—the aim of which is to expand access to quality
coverage—in at least two ways. First, cutting back on enrollment events and outreach will result
in fewer individuals receiving ACA-compliant health insurance coverage overall, directly
undermining the Act’s goal. And second, by decreasing health insurance enrollments, cutting
back on enrollment events and outreach will weaken health insurance markets and increase
premiums, ultimately resulting in even fewer individuals being able to access affordable health
care coverage.
Arbitrarily Driving Up Premiums 173. On January 17, 2019, Defendant CMS released a proposed 2020 Notice of Benefit
and Payment Parameters. See CMS, Proposed Rule, Notice of Benefit and Payment Parameters
for 2020, -- Fed. Reg. -- (Jan. 17, 2019), https://s3.amazonaws.com/public-
https://www.buzzfeed.com/katenocera/the-trump-administration-wont-support-state-obamacare (further reporting about an HHS official’s email to an event sponsor stating that he would not be permitted to participate). 213 See id. 214 Id.; see, e.g., Carla K. Johnson, Trump Administration Ends Affordable Care Act Assistance Contracts in 18 Cities, PBS NewsHour, July 20, 2017, https://www.pbs.org/newshour/health/trump-administration-ends-affordable-care-act-assistancecontracts-18-cities; Leslie Small, Wide Array of Groups Say HHS Has Stopped Working with Them on ACA Outreach, Fierce Healthcare, Aug. 15, 2017, http://www.fiercehealthcare.com/aca/wide-array-groups-say-hhs-has-stopped-working-them-acaoutreach; Amanda Michelle Gomez, Obamacare State Officials Are Being Left in the Dark This Open Enrollment Period, ThinkProgress, Aug. 24, 2017, https://thinkprogress.org/trump-adminobamacare-enrollment-state-marketplace-d8064210e501/.
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inspection.federalregister.gov/2019-00077.pdf (the “2020 Proposed Rule”). Like its 2019 counterpart, the 2020 Proposed Rule makes certain regulatory changes to the functioning of the marketplaces and the enrollment process. While the 2020 Proposed Rule has not been finalized, and therefore has no legal effect, it corroborates Defendants’ intent to unlawfully sabotage the Affordable Care Act.
174. In particular, the 2020 Proposed Rule would increase net premiums for almost all subsidized consumers and will increase the maximum out-of-pocket limit, which also applies to employer plans. The proposed rule would make a technical change to the “Premium Adjustment Percentage,” which is how the share of income subsidized consumers have to pay toward benchmark coverage is calculated. That change would result in a family of four with income of $80,000 paying about $200 more per year. As the 2020 Proposed Rule admits, “[t]he proposed change could also contribute to a decline in Exchange enrollment among premium tax credit eligible consumers, and could ultimately result in net premium increases for enrollees that remain in the individual market, both on and off the Exchanges, as healthier enrollees elect not to purchase Exchange coverage.” Id. at 206.215
175. Nothing requires Defendants to make this change to the formula. It is, instead, a purely voluntary decision to raise premiums for millions of moderate-income marketplace consumers and to increase out-of-pocket costs for consumers, including those with employer coverage, who have the most serious health needs. It therefore provides further evidence of
215 See Katie Keith, The 2020 Proposed Payment Notice Part 1: Insurer and Exchange Provisions, Health Affairs, Jan. 18, 2019, https://www.healthaffairs.org/do/10.1377/hblog20190118.312754/full/ (“Early analysis of this part of the rule suggests it would result in higher premiums for at least 7.3 million exchange consumers by cutting their premium tax credits.”).
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Defendants’ intent to arbitrarily raise premiums and the uninsured rate, in an effort to sabotage the ACA.
176. The 2020 Proposed Rule would also make it more difficult for individuals to enroll in ACA-compliant plans in several ways. For example, it would permit federallyfacilitated SHOPS to eliminate toll-free call centers, id. at 133; allow Navigators to scale back assistance with multiple topics, including “understanding basic concepts and rights related to health coverage and how to use it,” see id. at 135 & n.84; and clarify the rules to permit web brokers to display ACA-compliant health plans and non-ACA-compliant plans on separate websites, id. at 169.
Refusing to Defend the Act 177. Finally, Defendants have abdicated their constitutional duty to defend the ACA in court. “[T]he question of the executive’s obligation to enforce and defend implicates Article II’s requirement that the president ‘take Care that the Laws be faithfully executed.’” Daniel J. Meltzer, Executive Defense of Congressional Acts, 61 Duke L.J. 1183, 1192 (2012). Indeed, a range of considerations, including the distinctive capacities of the executive branch, the nature of relations between career lawyers and political appointees in the government, the virtues of institutional continuity within the executive branch, and the relationship between the executive branch and Congress, reinforce the wisdom of the conventional practice of providing a defense even of statutes that the incumbent administration views as offensive and possibly invalid. Id. at 1186-87. 178. On June 7, 2018, the Attorney General notified Congress that the Department of Justice would “not defend the constitutionality” of the ACA’s individual mandate provision, and would “argue that certain provisions of the [ACA] are inseverable from that provision,” namely the guaranteed-issue and community-rating provisions, in a pending case in federal district court
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in Texas.216 He did so despite acknowledging that “the Executive Branch has a longstanding tradition of defending the constitutionality of duly enacted statutes if reasonable arguments can be made in their defense.”217 The Attorney General’s decision constituted “a dramatic break from the executive branch’s tradition of arguing to uphold existing statutes and a land mine for health insurance changes the ACA brought about.”218
179. The Attorney General’s decision deprives the courts of the federal government’s considerable expertise and experience regarding the ACA, and inhibits the proper functioning of our adversary system, which is essential to ensuring that courts receive a robust presentation of competing views. More troublingly, it is a dramatic example of how Defendants are eager to invalidate, rather than to implement, core ACA provisions. Because of Defendants’ decision, consumers and other stakeholders cannot fully rely on the ACA’s guaranteed-issue and community-rating provisions, which are essential to ensuring that individuals with preexisting conditions can obtain necessary insurance coverage.
180. On December 14, 2018—a day before the conclusion of open enrollment in federally-facilitated exchanges—the court in the Texas litigation issued a declaratory judgment striking down the entire Affordable Care Act, reasoning that the individual mandate is unconstitutional and is inseverable from the rest of the law. That ruling is currently stayed pending appeal.
216 Letter from Jefferson B. Sessions, U.S. Attorney General, to Speaker, House of Representatives, Paul Ryan 1 (June 7, 2018), https://www.justice.gov/file/1069806/download. 217 Id. at 2. 218 Amy Goldstein, Trump Administration Won’t Defend ACA in Case Brought by GOP States, Washington Post, June 7, 2018, https://www.washingtonpost.com/national/health-science/trumpadministration-wont-defend-aca-in-cases-brought-by-gop-states/2018/06/07/92f56e86-6a9c11e8-9e38-24e693b38637_story.html.
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DEFENDANTS’ UNLAWFUL ACTIONS ARE HARMING PLAINTIFFS 181. Although the ACA has proven more resilient than Defendants might have hoped, Defendants’ actions are taking a toll. Through all the mechanisms described above, Defendants’ actions are aimed at weakening insurance markets; they are making it harder and more expensive for consumers and small businesses to procure health insurance coverage; and they are driving up the size of the uninsured and underinsured populations. Local governments and individuals nationwide, including Plaintiffs in this case, are paying the price. I. Defendants’ Unlawful Actions Are Causing Premiums to Rise and the Rate of the Uninsured to Increase 182. The myriad ways in which Defendants’ actions cause premiums to rise, enrollment in ACA exchanges to drop, and the rate of the uninsured to increase, are described above, action by action. As detailed below, the overall consequences are being felt now and, without intervention, will worsen. 183. In 2017 and 2018, the executive actions at issue here made it harder for Americans to afford and purchase quality health insurance, in part by causing premiums for plans on the ACA exchanges to be higher than they would otherwise be if Defendants had faithfully implemented the ACA. According to one analysis, “absent” various “policy changes,” including the actions challenged here, “it is likely that insurers would generally have required only modest premium increases” from 2017 to 2018, and from 2018 to 2019 “as well.”219 184. As a result of Defendants’ actions and other factors, however, premiums increased substantially in 2018. The Congressional Budget Office has estimated that the average
219 Cynthia Cox et al., Individual Insurance Market Performance in 2017, Kaiser Family Foundation (May 17, 2018), https://www.kff.org/private-insurance/issue-brief/individualinsurance-market-performance-in-2017/.
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premium for a benchmark ACA plan for 2018 was about 37 percent higher than it was in
2017.220 One analysis concluded that “a substantial portion” of such rate increases was “due to
political and regulatory factors that arose in 2017”—including the Trump Administration
decisions at issue here.221 Insurers have agreed: the press reported that in May 2017, “[h]ealth
insurers across the country [were] making plans to dramatically raise Obamacare premiums or
exit marketplaces amid growing exasperation with the Trump [A]dministration’s erratic
management of the program and its conflicting signals about the fate of aid for low-income
consumers and other key issues.”222 While subsidies partially insulate some marketplace
participants from increased premiums, they do nothing to protect enrollees who are not eligible
for subsidies, or the approximately 5 million enrollees who buy ACA-compliant plans outside
the marketplaces.223
185. Defendants’ actions are similarly causing premiums for 2019 to be higher than
they would otherwise be in the absence of Defendants’ sabotage efforts. Nationwide, average
premiums are falling from their 2018 highs by a negligible 0.3 percent to 2 percent, depending
on metal level, in 2019.224 In contrast, the Brookings Institute estimates that average premiums
220 May 2018 CBO Report, supra n.9, at 2. 221 Mark Hall, Stabilizing and Strengthening the Individual Health Insurance Market: A View from Ten States 4, USC-Brookings Schaeffer Initiative for Health Policy (July 2018), https://www.brookings.edu/wp-content/uploads/2018/07/Stabilizing-and-Strenghtening-theIndividual-Health-Insurance-Market2.pdf; see also May 2018 CBO Report, supra n.9, at 2. 222 See, e.g., Noam N. Levey, Health Insurers Plan Big Obamacare Rate Hikes—and They Blame Trump, Los Angeles Times, May 22, 2017, http://www.latimes.com/politics/la-na-polobamacare-trump-mismanagement-20170518-story.html. 223 Karen Pollitz & Gary Claxton, Proposals for Insurance Options that Don’t Comply with ACA Rules: Trade-Offs in Cost and Regulation, Kaiser Family Found. (Apr. 18, 2018), https://www.kff.org/health-reform/issue-brief/proposals-for-insurance-options-that-dont-complywith-aca-rules-trade-offs-in-cost-and-regulation/ [hereinafter Proposals for Insurance Options]. 224 Rachel Fehr et al., How ACA Marketplace Premiums Are Changing by County in 2019, Kaiser Family Found. (Nov. 20, 2018), https://www.kff.org/health-costs/issue-brief/how-aca-
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“would fall by 4.3 percent in 2019 in a stable policy environment” where many of Defendants’
sabotage actions would not have taken place.225 Similarly, one study estimates that, nationwide,
the average unsubsidized insurance premium in 2019 is $580 higher than it would otherwise be,
absent Defendants’ sabotage,226 while another pegs the figure at $970.227
186. In particular, Defendants’ attempts to expand non-ACA compliant health plans
are driving up premiums. The Kaiser Family Foundation estimates that “2019 premiums will be
an average of 6 percent higher, as a direct result of individual mandate repeal and expansion of
more loosely regulated plans, than would otherwise be the case,” with “on-exchange benchmark
silver premiums . . . about 16% higher than would otherwise be the case.”228 That is because
marketplace-premiums-are-changing-by-county-in-2019/ [hereinafter How ACA Marketplace Premiums Are Changing]. 225 Matthew Fiedler, How Would Individual Market Premiums Change in 2019 in a Stable Policy Environment?, USC-Brookings Schaeffer Initiative for Health Policy 3 (Aug. 2018), https://www.brookings.edu/wp-content/uploads/2018/08/Individual-Market-Premium-Outlook20191.pdf [hereinafter How Would Individual Market Premiums Change in 2019]. However, these nationwide averages do not account for increases in some of the City Plaintiff’s jurisdictions, as explained below. See infra Part II. Nor do they account for variation in the cost of individual insurance plans, which may well go up as the value of subsidies pegged to benchmark premiums go down. See Louise Norris, Are Health Insurance Premiums Going Up or Down for 2019?, Verywell Health, Oct. 16, 2018, https://www.verywellhealth.com/are-healthinsurance-premiums-going-up-or-down-for-2019-4177043 [hereinafter Are Health Insurance Premiums Going Up]. 226 Charles Gaba, The Chart that Shows the Price Tag for Trump’s Obamacare Sabotage, New York Times, Dec. 27, 2018, https://www.nytimes.com/2018/12/27/opinion/trump-obamacaresabotage-chart-cost.html [hereinafter The Chart that Shows the Price Tag]. 227 Emily Gee & Aditya Krishnaswamy, Estimated Increases in 2019 Premiums by Congressional District Due to ACA Sabotage, Ctr. for Am. Progress (July 24, 2018), https://www.americanprogress.org/issues/healthcare/news/2018/07/24/453917/estimatedincreases-2019-premiums-congressional-district-due-aca-sabotage/. 228 Rabah Kamal et al., How Repeal of the Individual Mandate and Expansion of Loosely Regulated Plans Are Affecting 2019 Premiums, Kaiser Family Found. (Oct. 26, 2018), https://www.kff.org/health-reform/issue-brief/how-repeal-of-the-individual-mandate-andexpansion-of-loosely-regulated-plans-are-affecting-2019-premiums/; see also How Would Individual Market Premiums Change in 2019, supra n.225, at 2. (“These policy changes are
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“[c]reating parallel insurance markets with different, lesser consumer protections, allows insurers
to offer lower premiums and less coverage to people while they are healthy, leaving the ACAregulated market with a sicker pool and higher premiums.”229 Indeed, a review of proposed
premiums found insurers citing “[t]he increase in the overall sickness of the risk pool,” which
they attribute “to ACA-related policy changes that lead to the loss of young and healthy enrollees,” as driving high premiums.230
187. Such concern has also resulted in insurers exiting ACA exchanges entirely.231 In
2016, the average number of insurers per state was 5.6; that number fell to 4.3 in 2017 and 3.5 in 2018.232 Insurers’ decisions to exit markets in 2017 and 2018 were “driven in part by legislative and regulatory uncertainty” produced by Defendants’ sabotage actions.233 For example, in
discussing whether to stay in ACA exchanges, the CEO of CareFirst Blue Cross Blue Shield, the
largest insurer in the mid-Atlantic (covering Maryland, Washington, D.C., and parts of Virginia),
said that “[c]ontinuing actions on the part of the [A]dministration to systematically undermine
generally expected to cause many healthier people to leave the individual market and thereby raise individual market premiums.”). 229 Proposals for Insurance Options, supra n.223; see also Are Health Insurance Premiums Going Up, supra n.225. 230 Sabrina Corlette, The Effects of Federal Policy: What Early Premium Rate Filings Can Tell Us About the Future of the Affordable Care Act, CHIRblog, May 21, 2018, http://chirblog.org/what-early-rate-filings-tell-us-about-future-of-aca/. 231 See Sabrina Corlette et al., Insurers Remaining in Affordable Care Act Markets Prepare for Continued Uncertainty in 2018, 2019, Urban Institute (Mar. 2018), https://www.urban.org/sites/default/files/publication/97326/moni_insurercanvas2018_2001756.p df. 232 Rachel Fehr et al., Insurer Participation on ACA Marketplaces, 2014-2019, Kaiser Family Found. (Nov. 14, 2018), https://www.kff.org/health-reform/issue-brief/insurer-participation-onaca-marketplaces-2014-2019/ [hereinafter Insurer Participation]. 233 Id.
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the market . . . make it almost impossible to carry out the mission.”234 While high profit margins have induced some insurers to return in 2019, the average number of insurers per state remains 4.0235—still lower than the average number of insurers in 2016 and 2017, before Defendants began sabotaging the ACA.
188. Defendants’ attacks on the enrollment process also caused premiums to be higher than they otherwise would be in 2019. In particular, Defendants “slashing the marketing budget by 90 percent and gouging the outreach-assistance budget by 40 percent” worked to “siphon off healthy enrollees, damaging the A.C.A. ‘risk pool,’ so that its customers tend to be sicker and more expensive to carriers.”236 During open enrollment, “just 1 in 4 Americans who buy their own health insurance or are uninsured [were] aware that the deadline for enrolling in coverage [was] Dec. 15,” and “barely 1 in 4 respondents reported seeing advertisements explaining how to enroll in Obamacare coverage.”237 Moreover, Navigators and other outreach groups were forced to “focus[] their limited budgets on re-enrolling existing clients rather than trying to reach new customers.”238
189. To the extent that premiums have decreased slightly from 2018 to 2019, those decreases are in spite of, rather than because of, Defendants’ actions. If Defendants had faithfully
234 Paige Winfield Cunningham, The Health 202: Leading Obamacare Insurer Says Things Are ‘Materially Worse’ Under Trump Administration, Washington Post, May 1, 2018 https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/05/01/the-health202-leading-obamacare-insurer-says-things-are-materially-worse-under-trumpadministration/5ae76f2230fb04371192693b/?utm_term=.d54f46a7a0a1. 235 Insurer Participation, supra n.232. 236 The Chart that Shows the Price Tag, supra n.226. 237 Paul Demko, Trump May Finally Be Undermining Obamacare, Politico, Nov. 28, 2018, https://www.politico.com/story/2018/11/28/obamacare-insurance-numbers-drop-995227. 238 Id.
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implemented the ACA, premiums would be decreasing even more. Moreover, the Kaiser Family
Foundation has concluded that “premium increases in 2018 were in large part compensating for
policy uncertainty and the termination of cost-sharing subsidy payments.”239 However, “[l]ow
loss ratios and higher margins indicate that some insurers over-corrected in 2018,” meaning that
insurers had less flexibility to increase premiums in 2019, and in fact faced pressure to lower
premiums.240 The Brookings Institution also found that “many insurers expected policy changes
that are now scheduled to take effect in 2019,” which “may have led insurers to incorporate those
policy changes into their premiums a year early.”241
190. Those increased premiums and the other ramifications of Defendants’ sabotage
actions—like making enrollment more difficult—have, in turn, led to an increase in the rate of
the uninsured and underinsured.242 Recently released 2017 Census data shows that, for the first
time in the four years since the implementation of the ACA, the uninsured rate remained the
239 Rachel Fehr et al., Individual Insurance Market Performance in Mid-2018, Kaiser Family Found. (Oct. 5, 2018), https://www.kff.org/health-reform/issue-brief/individual-insurancemarket-performance-in-mid-2018/. 240 Id.; see also Are Health Insurance Premiums Going Up, supra n.225 (“[M]any insurers overshot when they set premiums for 2018.”); Tara Straw et al., Strong Demand Expected for Marketplace Open Enrollment, Despite Administration Actions, Center on Budget & Policy Priorities (Oct. 31, 2018), https://www.cbpp.org/research/health/strong-demand-expected-formarketplace-open-enrollment-despite-administration (“[E]vidence indicates that flat or falling premiums reflect some insurers having set their 2018 premiums too high as they attempted to deal with sudden Administration policy shifts.”). 241 How Would Individual Market Premiums Change in 2019, supra n.225, at 2. 242 It has long been understood that among the most important reasons why the uninsured lack coverage is the unaffordability of coverage. See, e.g., supra ¶ 40 (citing CMS’s statement); KFF Key Facts, supra n.18 (“Even under the ACA, many uninsured people cite the high cost of insurance as the main reason they lack coverage. In 2016, 45% of uninsured adults said that they remained uninsured because the cost of coverage was too high.”); M. Susan Marquis et al., Consumer Decision Making In The Individual Health Insurance Market, Health Affairs (May/June 2006), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.25.w226 (“Affordability of insurance is believed to be the most important reason that the uninsured lack coverage . . . .”).
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same (8.8 percent) from 2016 to 2017 rather than falling significantly.243 The overall decline in
enrollment in ACA-compliant plans from its 2016 peak, particularly among those not eligible for
subsidies, is contributing to this trend.244 “After peaking in 2016 at 12.7 million, there was an
approximately 3.9% decline in ACA marketplace insurance enrollment in 2017” nationwide.245
2017’s “sabotage efforts likely prevented additional coverage gains by creating barriers to
obtaining available and affordable coverage.”246
191. Moreover, multiple estimates and preliminary information for 2018 suggest the
uninsured rate is now climbing, rolling back the gains made by the Affordable Care Act when it
was faithfully implemented. A recent Gallup survey found that the uninsured rate in 2018 was
13.7 percent, up from 12.2 percent in 2017.247 That level “is the highest in more than four
years”—i.e., the highest since the implementation of the individual mandate in 2014, and higher
243 Matt Broaddus, Census: Health Coverage Progress Stalled, Center on Budget & Policy Priorities (Sept. 12, 2018), https://www.cbpp.org/blog/census-health-coverage-progress-stalled [hereinafter Census: Health Coverage Progress Stalled]. 244 Press Release, CMS, Centers for Medicare and Medicaid Services Releases Reports on the Performance of the Exchanges and Individual Health Insurance Market (July 2, 2018), https://www.cms.gov/newsroom/press-releases/centers-medicare-and-medicaid-servicesreleases-reports-performance-exchanges-and-individual-health; see also May 2018 CBO Report, supra n.9, at 1, 5 (reporting that for 2018, a monthly average of about 9 million people under age 65 will be insured through nongroup plans purchased on ACA exchanges, a decline from 2017, when the estimated monthly average was 10 million); Ashley Semanskee et al., Data Note: Changes in Enrollment in the Individual Health Insurance Market 3, Kaiser Family Found. (July 2018), http://files.kff.org/attachment/Data-Note-Changes-in-Enrollment-in-the-IndividualHealth-Insurance-Market (reporting that enrollment in ACA-compliant plans peaked at 11.1 million in 2016 and dropped to 10.6 million in the first quarter of 2018). 245 Dan Witters, Uninsured Rate Rises in 17 States in 2017, Gallup, May 9, 2018, https://news.gallup.com/poll/233597/uninsured-rate-rises-states-2017.aspx (citing data from CMS). 246 Census: Health Coverage Progress Stalled, supra n.243. 247 Dan Witters, U.S. Uninsured Rate Rises to Four-Year High, Gallup, Jan. 23, 2019, https://news.gallup.com/poll/246134/uninsured-rate-rises-four-year-high.aspx.
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than the low point of 10.9 percent reached in 2016.248 Gallup attributed the rise in the uninsured rate to a number of factors stemming from Defendants’ sabotage actions, including “an increase in the rates of insurance premiums,” policy decisions like “a significant reduction in public marketing and shortened enrollment periods” and reduced “[f]unding for ACA ‘navigators,’” “political forces that may have increased uncertainty surrounding the ACA marketplace,” like the President’s own comments about the death of Obamacare, and the end of cost-sharing reduction payments.249
192. Similarly, the Commonwealth Fund found that the uninsured rate among working-age people had risen to 15.5 percent by March 2018, up from 12.7 percent as of April 2016—meaning that about 4 million working-age people lost insurance coverage.250 That study, too, found that the Trump Administration’s actions are responsible for these drops: the Trump “[A]dministration’s deep cuts in advertising and outreach during the marketplace openenrollment periods, a shorter open enrollment period, and other actions that collectively may have left people with a general sense of confusion about the status of the law” or dissuaded enrollment.251 Indeed, from 2017 to 2018, enrollment on exchanges dropped by an additional 3.7 percent overall, and by 5.3 percent in states with federally-facilitated exchanges.252
248 Id. 249 Id. 250 Sara R. Collins et al., First Look at Health Insurance Coverage in 2018 Finds ACA Gains Beginning to Reverse, To the Point, May 1, 2018, https://www.commonwealthfund.org/blog/2018/first-look-health-insurance-coverage-2018-findsaca-gains-beginning-reverse. 251 Id. 252 Press Release, Kaiser Family Found., National ACA Marketplace Signups Dipped a Modest 3.7 Percent This Year (Feb. 7, 2018), https://www.kff.org/health-reform/press-release/nationalaca-marketplace-signups-dipped-a-modest-3-7-percent-thisyear/?utm_source=link_newsv9&utm_campaign=item_233597&utm_medium=copy.
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193. The Congressional Budget Office (“CBO”) has also estimated that the number of uninsured Americans under age 65 rose from 27 million in a 2016 study to 29 million in a 2018 study.253 Looking forward, the CBO projected that, between 2018 and 2019, the number of people enrolled in health insurance through the nongroup market—including plans purchased on ACA exchanges and otherwise—will decrease by 3 million, in part because “premiums faced by people who are ineligible for subsidies in the nongroup market will be higher.”254
194. Defendants’ actions are already driving up the uninsured rate for 2019. Because Defendants’ actions have made it costlier and more difficult to obtain health insurance, fewer individuals enrolled in ACA-compliant health plans during open enrollment for 2019 plans than would have otherwise. Given that nationwide premiums generally remained flat, and consumers remained interested in obtaining affordable health insurance, analysts expected that open enrollment would hold steady or increase. The opposite happened: 2019 open enrollment fell short of 2018 enrollment “by about 4.2%, or 367,000 people.”255 More distressingly, open enrollment for new enrollees—which are typically more sensitive to changes to the open enrollment process and outreach—fell by 18.7 percent. Better retention numbers for prior enrollees likely kept open enrollment from becoming an outright disaster.
195. A number of the sabotage efforts described above contributed to weaker than expected open enrollment in 2019. That should be no surprise: after all, Defendants cut outreach
253 See Congressional Budget Office, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026 at 2 (March 2016), https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51385healthinsurancebaselineonecol.pdf; May 2018 CBO Report, supra n.9, at 1, 5. 254 May 2018 CBO Report, supra n.9, at 5, 14. 255 Shelby Livingston, HealthCare.gov Sign-Ups Come Up Nearly 400,000 Short, Modern Healthcare (Dec. 19, 2018), https://www.modernhealthcare.com/article/20181219/NEWS/181219883 [hereinafter HealthCare.gov Sign-Ups].
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by 90 percent; Administration officials refused to promote open enrollment; Defendants cut inperson assistance to enrollees by 80 percent; Defendants expanded and promoted non-ACA compliant short-term, limited-duration insurance plans as an alternative to ACA-compliant plans; Defendants again shortened open enrollment to six weeks; and Defendants refused to extend the December 15 deadline for open enrollment, despite the court’s decision in the Texas litigation the day before.256 Tellingly, the number of users who called or visited HealthCare.gov declined by 17.8 percent from 2018 to 2019, indicating that many simply were not aware of or capable of using open enrollment at all.
196. In sum, Defendants’ efforts to sabotage the ACA have caused, and are causing, premiums and uninsured rates to be higher than they otherwise would be nationwide. II. Defendants’ Unlawful Actions Harm the City Plaintiffs by Forcing Them to Spend
More on Uncompensated Care 197. The City Plaintiffs—and, for that matter, many other cities and counties nationwide—are being harmed by Defendants’ unlawful attempts to undermine the ACA, and they will continue to be harmed as long as Defendants’ unlawful actions stand. By driving up the rate of uninsured or underinsured individuals within the City Plaintiffs’ jurisdictions, Defendants’ actions force the City Plaintiffs to devote additional funding, personnel, and other resources to subsidizing and providing uncompensated care for their residents. Defendants’
256 See generally Olivia Hoppe, Affordable Care Act Navigators: Lack of Funding Leads to Consumer Confusion, Decreased Enrollment, CHIRblog, Jan. 18, 2019, http://chirblog.org/lackof-navigator-funding-leads-confusion-decreased-enrollment/ (“Navigators thought the 2018 Open Enrollment was challenging, after a slew of policy changes including massive Navigator grant funding cuts, shortened enrollment period, 90 percent cuts to federal advertising, and the end to cost-sharing reduction payments (CSRs). But this year may have been even more so.”).
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actions thereby hit the City Plaintiffs’ budgets, including the budgets for their public health
departments, free or reduced-cost clinics, and ambulance services.
198. Fulfilling their responsibility to care for their residents, local governments often
provide a variety of health services to those who, lacking adequate health insurance, cannot
otherwise pay for medical treatment. For that reason, “local governments (municipalities,
counties, and special-purpose health or hospital districts) bear a large share of the direct financing of public hospital and clinic services.”257 In 2013, state and local governments spent $19.8 billion to cover the costs of uncompensated care.258 As a result, an increase in “the number
of uninsured and the amount of uncompensated care . . . will translate into increased pressure on state and local government to finance the growing cost of the uninsured.”259
199. Moreover, “compared to the insured population, the uninsured are more likely to
skip or postpone needed care due to cost, miss preventative care, and be diagnosed with cancer at later stages resulting in earlier death.”260 Then, “when uninsured persons do use services, they
257 Institute of Medicine, A Shared Destiny: Community Effects of Uninsurance 128 (2003), https://www.ncbi.nlm.nih.gov/books/NBK221329/ [hereinafter IOM Shared Destiny]. 258 Patrick Kaiser & Eric Cochling, Increasing Access to Quality Healthcare for Low-Income Uninsured Georgians Policy Recommendations for the State of Georgia 12, Georgia Center for Opportunity (June 2014), https://georgiaopportunity.org/assets/2014/06/Charity-Care-Report.pdf. 259 John Holahan & Bowen Garnett, The Cost of Uncompensated Care With and Without Health Reform 4, Urban Institute (Mar. 2010), https://www.urban.org/sites/default/files/publication/28431/412045-The-Cost-ofUncompensated-Care-with-and-without-Health-Reform.PDF; see also Erin F. Taylor et al., Community Approaches to Providing Care for the Uninsured, 25 Health Affairs 173, 173 (2006), https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.25.w173 (“[i]ncreases in the number of uninsured people often strain local safety nets and health systems”). 260 James Benedict, Chronic Disease Management of the Uninsured Patient at Ohio Free Clinics 5, Walden University (2016), https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=3816&context=dissertations.
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are likely to need more costly health services because of delays in seeking care.”261 There is,
therefore, a direct relationship between increases in the uninsured population and increased costs
for government, including local government.262
200. Costs like these—costs institutions bear as a result of providing uncompensated
care—motivated the passage of the ACA. In the Act itself, Congress observed the astronomical
costs “of providing uncompensated care to the uninsured”: “$43,000,000,000 in 2008.” 42
U.S.C. § 18091(2)(F). Congress also noted that individuals who choose “to forego health
insurance coverage and attempt to self-insure . . . increase[] financial risks to households and
medical providers.” Id. § 18091(2)(A). Indeed, during the debates over the Act, members of
Congress frequently referred to the need to reduce the costs that providers face because of
uncompensated care.263 And in explaining his Administration’s health care reform agenda in a
speech to the U.S. Conference of Mayors in 2009, President Obama highlighted the need for
action because, among other things, “spiraling health care costs” were “straining budgets across
261 IOM Shared Destiny, supra n.257, at 125. 262 Cf. Jessica Schubel & Matt Broaddus, Uncompensated Care Costs Fell in Nearly Every State as ACA’s Major Coverage Provisions Took Effect, Center on Budget & Policy Priorities (May 23, 2018), https://www.cbpp.org/research/health/uncompensated-care-costs-fell-in-nearly-everystate-as-acas-major-coverage. 263 See, e.g., 155 Cong. Rec. S13800 (daily ed. Dec. 23, 2009) (statement of Sen. Kaufman) (“Rising medical costs, skyrocketing premiums, increasing numbers of the uninsured and the strain on both business and providers have brought the critical need for health reform back to the Senate this year. Make no mistake, we need health care reform now.”); 155 Cong. Rec. S14126 (daily ed. Dec. 24, 2009) (statement of Sen. Akaka) (“Our health care providers are struggling to meet the increasing burdens imposed on them by greater numbers of uninsured patients and rising costs.”); 156 Cong. Rec. H1880 (daily ed. Mar. 21, 2010) (statement of Rep. Jackson Lee) (claiming that in her district, the ACA would “[r]educe the cost of uncompensated care for hospitals and other health care providers by $27 million annually”); 156 Cong. Rec. H1871 (daily ed. Mar. 21, 2010) (statement of Rep. Ellison) (“When insurance coverage for 358,000 Fifth District residents is improved—and when the cost of uncompensated care for hospitals and other health care providers is reduced by $101 million—that is positive change.”).
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government.”264 In sum, there is no doubt that reducing the financial burden upon entities that
provide health services, including cities, was one of the core aims of the ACA.
201. The City Plaintiffs operate or subsidize free or reduced-cost health care centers
and clinics, which “have patients who are primarily uninsured, rely on volunteers and resources
of the community, and face persistent financial struggles.”265 “The primary reason for using a
free clinic is lack of insurance.”266 For example, one study found that nearly 50 percent of the
individuals who use publicly funded sexually transmitted infection clinics are uninsured.267
Similarly, uninsured individuals primarily rely on free or reduced-cost immunization clinics to
obtain necessary vaccinations.268
202. The City Plaintiffs will have to bear greater costs to maintain their health care
centers and clinics if the number of uninsured or underinsured individuals increases. There is a
264 President Barack Obama, Remarks to the United States Conference of Mayors 127, Feb. 20, 2009, https://www.gpo.gov/fdsys/pkg/PPP-2009-book1/pdf/PPP-2009-book1-doc-pg126.pdf; see also Sen. Nancy Pelosi, Remarks at the 2010 Legislative Conference for National Association of Counties, March 9, 2010, https://www.democraticleader.gov/newsroom/pelosi-remarks-2010legislative-conference-national-association-counties/. 265 David O. Barbe, Council on Medical Services, Free Clinics and the Uninsured 1, American Medical Association (2009), https://www.ama-assn.org/sites/default/files/mediabrowser/public/about-ama/councils/Council%20Reports/council-on-medical-service/a09-cmsfree-clinics.pdf. 266 Akiko Kamimura et al., Uninsured Free Clinic Patients’ Experiences and Perceptions of Healthcare Services, Community Resources, and the Patient Protection and Affordable Care Act, 3 Patient Experience J. 12, 12 (2016), http://pxjournal.org/cgi/viewcontent.cgi?article=1100&context=journal. 267 Karen W. Hoover et al., Continuing Need for Sexually Transmitted Disease Clinics After the Affordable Care Act, American Journal of Public Health (Nov. 2015), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4627523/. 268 Association of State & Territorial Health Officials, Identifying and Vaccinating Uninsured Adults: Strategies and Practices 12 (Sept. 2016), http://www.astho.org/Programs/Immunization/Documents/ASTHO-Identifying-and-VaccinatingUninsured-Adults-(FINAL-5_19_17)/.
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direct relationship between the uninsured rate in a given state and the rate of uninsured visits for
which the clinic does not receive full compensation. In states that expanded Medicaid, for
example, “[t]here was a substantial decrease in uninsured community health center visits and a significant increase in Medicaid-covered visits” relative to states that did not.269 But “[d]espite
the uninsured rate dipping to 9.1 percent in 2015, a record low in the U.S., there has been a slow
trend upward” as a result of Defendants’ unlawful actions “that has many clinic leaders worried—and fighting for funding.”270
203. The City Plaintiffs also operate or subsidize ambulance services, which answer
emergency calls regardless of whether the individual needing care has health insurance. Studies
have shown that “the uninsured . . . disproportionately rely on ambulance service for transport to the [emergency department].”271 As the number of uninsured or underinsured individuals
increases, ambulance services will have to respond to a larger number of calls for which they
cannot seek reimbursement from insurers. Thus, the ambulance service and, by extension, the
city that runs or subsidizes the service, is left to absorb the increased costs.
269 Heather Angier et al., An Early Look at Rates of Uninsured Safety Net Clinic Visits After the Affordable Care Act, 13 Annals of Family Med. 10, 10 (Jan.-Feb. 2015), https://www.annemergmed.com/article/S0196-0644(10)00384-7/fulltext. 270 Joseph Jaafari, The Demand for Volunteer Physicians Is Rising. The Number of Uninsured Is Too., Nation Swell, Oct. 27, 2017, http://nationswell.com/demand-volunteer-physicians-freehealth-clinics/. 271 Benjamin T. Squire et al., At-Risk Populations and the Critically Ill Rely Disproportionately on Ambulance Transport to Emergency Departments, 20 Annals of Emergency Med. 1, 6 (2010), https://www.ncbi.nlm.nih.gov/pubmed/20554351; see also Zachary F. Meisel et al., Variations in Ambulance Use in the United States: The Role of Health Insurance, Academy Emergency Medicine (Oct. 2011), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3196627/pdf/nihms314403.pdf (“EMS use is higher among those who historically have had difficulty accessing routine medical care, specifically poor and uninsured patients.”)
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204. The City Plaintiffs must address these budgetary shortfalls, and must do so in ways that impose still greater costs on cities and their residents. “Public subsidy of uncompensated care delivered to uninsured persons requires that additional public revenues be raised, resulting in a higher tax burden at the local level, the receipt of monies from federal coffers, or the diversion of resources from other public purposes.”272 An unexpected increase in the rate of uninsured or underinsured individuals therefore translates to additional strain on already overburdened city budgets and overtaxed city residents.
205. Aside from the direct impact on their public safety and health departments, the City Plaintiffs will have to confront the many downstream effects of a population that is necessarily sicker, less productive, and less able to participate in the community and civic life. Multiple studies have shown that “in areas with many uninsured people, the quality of care was lower, as well,” in part because “it is difficult for health providers to maintain services in areas with large numbers of patients who cannot pay for care.”273 More broadly, “[f]or the communities in which uninsured individuals and families live, the lack or loss of health insurance coverage by some may undermine the shared economic and social foundations of the entire community.”274
206. The effects will be felt throughout the City Plaintiffs’ budgets. As one mayor has put it, “if people don’t get the medical care they need, it’s going to be city fire departments and
272 IOM Shared Destiny, supra n.257, at 123. 273 Julie Rovner, Millions More Uninsured Could Impact Health of Those With Insurance, Too, Kaiser Health News, July 14, 2018, https://khn.org/news/millions-more-uninsured-could-impacthealth-of-those-with-insurance-too/. 274 IOM Shared Destiny, supra n.257, at 120.
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police departments responding to preventable emergencies.”275 Public school teachers will have
to deal with students that either miss school or come to school and spread illnesses to other students.276 And other social services departments will face increased demand for public benefits.
207. The City Plaintiffs’ economies will suffer too: “An increasing or high uninsured
rate, and the attendant high public costs, may discourage employers from locating or continuing to make their home in a community.”277 Moreover, “the uneven availability of workplace health
benefits keeps workers ‘locked in’ to their jobs if they already have coverage through their employer,” inhibiting growth and dynamism in the City Plaintiffs’ economies.278 For example,
employees may be unwilling to move to a new job or start a new business, and thereby forego
employer-provided health insurance, if doing so forces them to purchase costly insurance on the
individual market.
208. All of these costs—budgetary, economic, political, and social—are being borne
by each of the City Plaintiffs in this case.
Columbus, Ohio 209. The City of Columbus will be harmed in at least three ways by the rise in the rates
of the uninsured and underinsured caused by Defendants’ unlawful actions: it will be forced to
275 Sara Durr, The Nation’s Mayors Stress Impact of Affordable Care Act Repeal, U.S. Conference of Mayors (Jan. 25, 2017), https://www.usmayors.org/2017/01/25/the-nationsmayors-stress-impact-of-affordable-care-act-repeal/ (statement of Mesa, Ariz., Mayor John Giles). 276 Press Release, U.S. Department of Education, Obama Administration Encourages Schools and Districts to Enroll Students in Health Care Coverage Through School Registration (Aug. 31, 2016), https://www.ed.gov/news/press-releases/obama-administration-encourages-schools-anddistricts-enroll-students-health-care-coverage-through-school-registration (“Research shows that children who have access to health coverage are more likely to graduate from high school and college than uninsured children.”). 277 IOM Shared Destiny, supra n.257, at 130. 278 Id.
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pay more to support community health centers that serve its uninsured residents, its ambulance system will face greater unrecouped costs from calls by uninsured and underinsured individuals, and it will suffer all of the downstream costs of a population that is necessarily sicker and less productive.
210. To start, Columbus has a public health department, Columbus Public Health, which “is charged with assuring conditions in which people can be healthy.” Columbus Public Health “is made up of a range of programs providing clinical, environmental, health promotion, and population-based services,”279 and has an annual budget of approximately $56 million and is staffed by 490 full- and part-time employees.
211. Columbus Public Health subsidizes a number of community health centers that, as described above, will face greater demand from uninsured or underinsured individuals who cannot obtain health care elsewhere. In 2017, these community health centers saw over 22,000 patients, including over 11,000 uninsured patients—a 7 percent increase in the percentage of uninsured patients from 2016. Through August of 2018, the centers had already seen 9,423 uninsured patients out of 16,163 patients in all, which would amount to an 8 percent increase if the same number holds over the course of the year. In total, these centers have an annual budget of approximately $38 million.
212. Most importantly, Columbus Public Health financially supports PrimaryOne Health, which is a collection of ten Columbus neighborhood health centers in medically underserved areas.280 PrimaryOne is designed to be a “system of health center sites throughout
279 About Columbus Public Health, City of Columbus, https://www.columbus.gov/publichealth/About-Columbus-Public-Health/. 280 The History of PrimaryOne Health, PrimaryOne, http://www.primaryonehealth.org/about/.
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Columbus and Franklin County to serve the health care needs of vulnerable, un/under and insured residents within the community.”281
213. In 2017, Columbus subsidized PrimaryOne with $4,367,145 in public funds. That same year, the centers served over 45,000 patients. This included more than 15,000 uninsured patients, an increase of almost 3,000 more uninsured patients than the year before. In contrast, the number of uninsured patients dropped from 17,752 in 2013 to 14,272 in 2014, after the individual mandate took effect.
214. If the rate of uninsured or underinsured individuals increases, then the PrimaryOne Health centers will necessarily see even more patients, and Columbus will either have to provide them with additional funding or let them decrease the range of services they are able to provide. See supra ¶ 202.
215. Columbus Public Health also operates a number of specialty clinics for alcohol and drug abuse prevention, dental services, family planning, immunizations, sexual health, tuberculosis control, women, infants, and children nutrition, and women’s health and wellness.282 Each of these clinics operates on a free or reduced-fee scale and principally serves the uninsured and underinsured populations.283 As with PrimaryOne Health, growth in the uninsured and underinsured population will translate to additional costs for Columbus.
216. Columbus also maintains “one of the best Emergency Medical Services (EMS) in the United States,” operated by the Columbus Division of Fire.284 That system dispatches
281 Id. 282 About Columbus Public Health, City of Columbus, https://www.columbus.gov/publichealth/About-Columbus-Public-Health/. 283 See, e.g., Dental Clinic, City of Columbus, https://www.columbus.gov/publichealth/programs/Dental-Clinic/. 284 Division of Fire, City of Columbus, https://www.columbus.gov/publicsafety/fire/reports/EMS-Reports/.
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ambulances to meet urgent health needs, regardless of whether the call comes from an individual who has health insurance or is otherwise able to pay for the call. In 2017, the Columbus Division of Fire answered over 132,000 emergency medic calls and had a budget of over $240 million.
217. If possible, “[r]eimbursement for the expense of emergency ambulance transport is sought from a patient’s Medicare, Medicaid, or commercial health insurance coverage.”285 If an individual “live[s] in the City of Columbus and do[es] not have health insurance coverage, [they] will not receive a bill for transport”; thus, “no Columbus resident will pay anything ‘out of pocket’ as the result of being transported to a hospital by The Columbus Division of Fire.”286 Indeed, while Columbus recoups from 40 to 80 percent of its costs for transports for individuals with private insurance, Columbus only recoups less than 4 percent of its costs for uninsured individuals. For that reason, reimbursements “in no way cover all the costs incurred for treatment and transport.”287
218. As explained above, an increase in the number of uninsured or underinsured individuals will result in more transports for which Columbus does not receive reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 203. Indeed, Columbus’s data shows that this concern is far from speculative: In 2014, after the individual mandate took effect, the number of uninsured transports dropped from 11,123 to 7,944—a decrease of 29 percent. In 2015, that number fell by another 18%, to 6,541 transports. Until 2018, those numbers remained essentially flat. However, preliminary 2018 numbers for January-July (4,157 transports) show that the number of uninsured transports increased by 650 over the same timeframe in 2017 (3,507 transports)—an 18.5 percent increase. As the uninsured rate goes up again, Columbus can
285 Id. 286 Id. 287 Id.
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expect to provide additional unreimbursed transports, which will be paid for out of Columbus’s own coffers.
219. Aside from these budgetary impacts, Columbus—a city of nearly 900,000 people, with an economy of $132 billion—is harmed by the need to care for a population that becomes increasingly uninsured and less healthy. As explained above, an increase in the rate of uninsured and underinsured individuals will impose additional drains on the city’s budget and its personnel, and will make the city a less attractive place to live and work.
220. Each of these harms is traceable to Defendants’ unlawful actions. As explained above, Defendants’ actions increase the rate of the uninsured and underinsured, which in turn affects Columbus’s budget and diminishes Columbus’s economic prospects. CMS found that the cost of the lowest cost Silver plan in Ohio increased by 19.4 percent from 2017 to 2018, and by 3.8 percent from 2018 to 2019.288 For other plans, “Ohioans who have Obamacare plans will see premium increases averaging 6.3 percent for health-insurance coverage in 2019, according to the Ohio Department of Insurance.”289 The Kaiser Family Foundation found that, in 2019, after-tax credit costs of plans across metal levels and income brackets are generally increasing in Franklin County.290 One analyst found that the average unsubsidized insurance premium in Ohio in 2019 is $649 higher than it would otherwise be because of Defendants’ sabotage actions.291
288 CMS, Average Monthly Premiums for Second-Lowest Cost Silver Plan and Lowest Cost Plan for States Using the HealthCare.gov Platform, 2016-2019 (Oct. 11, 2018), https://www.cms.gov/sites/drupal/files/2018-10/10-1118%20Average%20Monthly%20Premiums%20for%20SLCSP%20and%20LCP%2020162019.pdf [hereinafter Average Monthly Premiums]. 289 Ginger Christ, Ohio Obamacare 2019 Costs Rise, But Not as Much; More Options Available, Cleveland Plain Dealer (Oct. 7, 2018), https://www.cleveland.com/metro/index.ssf/2018/10/ohio_obamacare_2019_costs_rise.html. 290 How ACA Marketplace Premiums Are Changing, supra n.224. 291 The Chart that Shows the Price Tag, supra n.226.
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221. The Urban Institute projects that Defendants’ sabotage efforts, among other factors, will cause enrollment in ACA-compliant plans to decrease in Ohio by 31.6 percent for 2019—45.6 percent if expanded access to short-term policies is factored in292—thus increasing the rate of the uninsured and the underinsured. Indeed, 2019 open enrollment in Ohio fell by 11.1 percent. Moreover, Columbus tends to have a higher rate of uninsured individuals than Ohio overall.293 Columbus is therefore particularly vulnerable to Defendants’ attempts to sabotage the ACA and the resulting increase in the rate of uninsured. By the same token, each of these harms will be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
Baltimore, Maryland 222. The City of Baltimore, Maryland, will be harmed in many of the same ways as Columbus. By increasing the rate of uninsured and underinsured individuals, Defendants’ actions will make it costlier for Baltimore to support its health clinics and other programs; they will likewise force Baltimore to spend more to cover unrecouped costs from city ambulance calls; and Baltimore, too, will suffer the many harms associated with a population that is necessarily less healthy. 223. “The Baltimore City Health Department is the oldest continuously-operating health department in the United States, formed in 1793.” It is charged with “working to improve the health and well-being of Baltimore residents”—and thereby “make Baltimore a city where all
292 March 2018 Urban Institute Study, supra n.116, at 11. 293 See 2017 Community Health Assessment 2-5, Columbus, Worthington, Franklin County (Sept. 2017), https://www.columbus.gov/WorkArea/DownloadAsset.aspx?id=2147499258; U.S. Census Bureau, Selected Characteristics of Health Insurance Coverage in the United States, 2017 ACA 5-Year Estimates (2017), https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml (select table and enter “Ohio” and “Columbus city, Ohio”) [hereinafter Selected Characteristics].
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residents realize their full health potential.” To that end, the department “has a wide-ranging area of responsibility,” including matters like acute communicable diseases, chronic disease prevention, HIV/STD, maternal-child health, school health, and senior services. It is staffed by approximately 800 employees and has an annual budget of approximately $126 million.294
224. In particular, the Baltimore City Health Department operates a number of specialty clinics out of two principal facilities. These include clinics for reproductive health, sexually transmitted diseases, dental and oral health care, and immunizations.295 The department also subsidizes a Men’s Health Center, which operates out of space provided at one of the department’s own facilities.296 Each of these clinics provides services on a free or reduced-fee scale and therefore serves as an essential resource for the uninsured and underinsured populations.297 Consequently, any growth in the uninsured and underinsured population will mean additional costs for the city.
225. The Baltimore City Health Department also provides or subsidizes a number of other services for Baltimore’s uninsured and underinsured residents. In particular, the Department funds a visiting-nurse program that makes house calls for individuals who tend to use ambulance services frequently, including those with chronic health conditions like diabetes, hypertension, asthma, and mental health disorders. The Department also funds a number of other programs focused on specific health conditions, including a Community Asthma Program, a
294 About the Baltimore City Health Department, Baltimore City Health Department, https://health.baltimorecity.gov/about. 295 Health Clinics & Services, Baltimore City Health Department, https://health.baltimorecity.gov/programs/health-clinics-services. 296 Men’s Health Center, Baltimore City Health Department, https://health.baltimorecity.gov/health-clinics-services/mens-health-center. 297 See, e.g., Family Planning & Reproductive Health Clinic, Baltimore City Health Department, https://health.baltimorecity.gov/health-clinics-services/family-planning-reproductive-health.
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Tuberculosis Control Program, a Childhood Lead Poisoning Prevention Program, and programs for substance abuse.298 And the Department subsidizes a number of other entities that provide services to Baltimore residents, including the Baltimore Family League and Health Care Access Maryland. An increase in the uninsured rate will similarly impose additional burdens on each of these programs, and therefore require more funding from the city. See supra ¶ 202.
226. Like Columbus, the Baltimore City Fire Department also maintains an ambulance system that answers calls whether or not they come from individuals with health insurance or who are otherwise able to pay.299 In 2017, the Baltimore City Fire Department answered over 100,000 emergency medic calls, with 17,000 from uninsured residents, and had a budget of over $42 million for emergency medical services. In 2018, the Department answered roughly the same number of total calls, with 15,697 from uninsured residents.
227. The Baltimore City Fire Department attempts to recoup its costs for ambulance services by seeking reimbursement from a patient’s Medicare, Medicaid, or commercial health insurance coverage. If a patient lacks insurance, the department will seek reimbursement from the patient personally, making several attempts to collect on the debt. However, the Department is rarely successful; while, on average, the department recoups 90 percent or more of its costs for ambulance calls from individuals with private insurance, it only recoups less than 7 percent of its costs for uninsured individuals. Thus, as with Columbus, more uninsured and underinsured
298 See, e.g., Asthma, Baltimore City Health Department, https://health.baltimorecity.gov/node/454; Health Clinics & Services, Baltimore City Health Department, https://health.baltimorecity.gov/programs/health-clinics-services; Lead Poisoning, Baltimore City Health Department, https://health.baltimorecity.gov/lead/lead-poisoning; Substance Use and Misuse, Baltimore City Health Department, https://health.baltimorecity.gov/programs/substance-abuse; Tuberculosis, Baltimore City Health Department, https://health.baltimorecity.gov/node/164. 299 See Welcome to the Baltimore City Fire Department, Baltimore City Fire Department, https://fire.baltimorecity.gov/.
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individuals means more ambulance calls for which Baltimore does not receive reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 203.
228. Indeed, Baltimore’s ambulance system will be hit especially hard; in its recent strategic plan, the Baltimore City Fire Department identified “[r]esources allocation for EMS: allotment of resources with increasing EMS call volume; staffing; too many calls for amount of personnel we have; potential closings” as the community’s chief area of concern.300 Baltimore has adopted multiple programs to try to deal with this problem, including the visiting nurse program described above, and a High Utilizer Task Force “focused on strategies to support the most vulnerable patients, whose unmet social, complex medical, behavioral health, or environmental needs contribute to repetitive, avoidable use of acute health services.”301 An increase in the uninsured rate will only further strain a system which is already overstretched.
229. Finally, Baltimore—a city of over 600,000 people, with a $187.4 billion economy—is similarly harmed by the burdens imposed by a sicker population. As with Columbus, an increase in the uninsured rate will drain Baltimore’s budget and resources across the board, and will make the city a less attractive place to live and work.
230. These harms, again, can be traced directly to Defendants’ unlawful actions. Defendants’ actions are contributing to premiums that are much higher than they would otherwise be in Maryland. The Kaiser Family Foundation found that, in 2019, after-tax credit costs are skyrocketing for Bronze and Silver plans across income brackets in Baltimore.302 One
300 Strategic Plan 2016-2021 at 9, Baltimore City Fire Department (2016), http://fire.baltimorecity.gov/sites/default/files/Baltimore%20Strategic%20Plan%2020162021%20FINAL%2016%2010%2016%20corrected.pdf. 301 High Utilizer Task Force, Baltimore City Health Department, https://health.baltimorecity.gov/high-utilizer-task-force. 302 How ACA Marketplace Premiums Are Changing, supra n.224.
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analyst found that the average unsubsidized insurance premium in Maryland in 2019 is $496 higher than it would otherwise be because of Defendants’ sabotage actions.303 Beyond 2019, one study describes Maryland as having a “high risk” of experiencing premium increases of up to 50 percent.304 Another predicts premium increases averaging 30 percent.305
231. Higher premiums mean more uninsured families and individuals. Sharply rising premiums have already had an effect on Maryland, with enrollees on Maryland’s ACA exchange dropping 13 percent from 2017 to 2018.306 Looking ahead, the Urban Institute estimates a further 20.1 percent decrease in 2019.307 Like Columbus, Baltimore has a higher uninsured rate than the rest of its state, meaning that Baltimore is also particularly vulnerable to an increase in the uninsured rate caused by Defendants’ sabotage efforts.308 And again like Columbus, Baltimore’s harms will be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
303 The Chart that Shows the Price Tag, supra n.226. 304 National Analysis Projects 2019 Premium Hikes of 30 Percent in Some States and Cumulative Increases of 90 Percent or More in the Next Three Years, Covered California (Mar. 8, 2018), https://coveredcanews.blogspot.com/2018/03/national-analysis-projects-2019premium.html [hereinafter March 2018 Covered California Post]. 305 Rabah Kamal et al., 2019 Premium Changes on ACA Exchanges, Kaiser Family Found. (Oct. 11, 2018), https://www.kff.org/health-costs/issue-brief/tracking-2019-premium-changes-onacaexchanges/ [hereinafter 2019 Premium Changes]. 306 Andrea K. McDaniels, CareFirst and Kaiser Ask Again for Large Rate Increases on Insurance Sold on State Exchange, Baltimore Sun, May 7, 2018, http://www.baltimoresun.com/health/bs-hs-insurance-rate-requests-20180507-story.html. 307 March 2018 Urban Institute Study, supra n.116, at 10. 308 Selected Characteristics, supra n.293 (select table and enter “Maryland” and “Baltimore city, Maryland”).
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Cincinnati, Ohio 232. The City of Cincinnati will, like Columbus and Baltimore, be harmed by having to pay more to support clinics that serve the uninsured and underinsured population, to maintain ambulance services that respond to calls from uninsured residents, and to manage an increasingly less healthy and less productive population. 233. “Since 1826, the Cincinnati Health Department . . . has been committed to protecting and improving the health of the people of Cincinnati.” The Department is “a nationally recognized leader in public health” that “advocates for responsive health and human services that promote healthy living environments and social well-being, as well as works to reduce health inequities such as poverty and unemployment.”309 The Department has an annual budget of approximately $51 million and is staffed by 490 employees. 234. The Cincinnati Health Department subsidizes a number of health centers that will, again, face greater demand as the rate of uninsured and underinsured individuals increases. These centers have an annual budget of $23 million. In 2017, these centers saw about 45,000 patients, with 95,000 individual visits. Specifically, these centers saw 13,123 uninsured patients—an 11 percent increase over the 2016 figure of 11,776 patients. 235. Most importantly, the Cincinnati Health Department operates seven freestanding primary-care centers, which provide a full range of general medical services to Cincinnati’s uninsured residents. Cincinnati also operates nine dental centers, including one combined vision and dental center. The Department’s centers operate on a sliding-fee scale basis, where uninsured
309 About the Health Department, City of Cincinnati, https://www.cincinnatioh.gov/health/about-the-health-department/.
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residents pay based on their income. Thus, an increase in the uninsured and underinsured rate will mean that Cincinnati must pay more to provide care to its residents.
236. Aside from its free-standing health clinics, the Cincinnati Health Department operates thirteen School Based Health Centers, serving 10,000 students, out of Cincinnati public schools, which provide “physicals, asthma management, immunizations, prescription medications, sick and injury care, and health education to children and families.”310 These centers are available to uninsured students, and will likewise see greater demand if those students and their families lack health insurance coverage.
237. The Cincinnati Health Department also operates several other programs designed to improve the health of city residents. For example, the Department operates a First Steps Program that provides services, including home visits, to new mothers and their infant children;311 a Men’s Health Initiative that “specializes in providing health education and linking services to men who have been historically underserved”;312 and a Community Health Nursing Program that provides “comprehensive nursing services” on a sliding-scale basis because “when coverage stops, we don’t.”313 Each of these services, too, will cost more to run as the rate of the uninsured and underinsured goes up. See supra ¶ 202.
310 School & Adolescent Health, City of Cincinnati, https://www.cincinnatioh.gov/health/cincinnati-health-department-divisions1/school-adolescent-health/. 311 Maternal and Infant Health, City of Cincinnati, https://www.cincinnatioh.gov/health/cincinnati-health-department-divisions1/fetal-infant-mortality/. 312 Men’s Health, City of Cincinnati, https://www.cincinnati-oh.gov/health/cincinnati-healthdepartment-divisions1/men-s-health1/. 313 Nursing Services, City of Cincinnati, https://www.cincinnati-oh.gov/health/cincinnati-healthdepartment-divisions1/nursing-services/.
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238. Cincinnati also maintains an emergency medical services system, operated by the Cincinnati Fire Department.314 That system dispatches ambulances to meet urgent health needs, regardless of whether the call comes from an individual who has health insurance or is otherwise able to pay for the call. In 2017, the Cincinnati Fire Department had a budget of over $60 million, and answered over 62,000 emergency medic calls. Around 34,000 of those calls resulted in hospital transports, and around 4,300 of those transports involved uninsured patients. Each of these numbers increased from 2016 to 2017, and all else being equal will continue to increase in 2018 because of the Trump Administration’s actions.
239. If a transported patient lacks insurance, Cincinnati will attempt to recoup its costs from the patient directly. However, while Cincinnati recoups between 93 percent and 94 percent of its billed costs from private insurers (based on rates negotiated by the city), it recoups less than 3 percent of its costs from uninsured individuals. Thus, as explained above, an increase in the number of uninsured or underinsured individuals will result in more transports for which Cincinnati receives little reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 203.
240. Setting aside these budgetary impacts, Cincinnati—a city of around 300,000 people, with an economy of $132 billion—is harmed by the need to care for an increasingly uninsured and less healthy population. As explained above, an increase in the rate of uninsured and underinsured individuals will impose additional drains on Cincinnati’s budget and its personnel, and will make the city a less attractive place to live and work.
314 EMS Operations, City of Cincinnati, https://www.cincinnati-oh.gov/fire/operations/emsoperations/.
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241. Cincinnati’s harms, too, are traceable to Defendants’ unlawful actions—as explained above, those actions increase the rate of the uninsured and underinsured, which in turn affects Cincinnati’s budget and diminishes Cincinnati’s economic prospects. As explained above, Defendants’ actions are causing premiums and uninsured rates in Ohio to rise. See supra ¶¶ 22021. In particular, the Kaiser Family Foundation found that, in 2019, after-tax credit costs for plans across metal levels and income brackets are increasing, generally by double-digit percentages, in Hamilton County.315 Like Columbus, Cincinnati has a higher uninsured rate than Ohio overall, and is likewise particularly vulnerable to Defendants’ attempts to sabotage the ACA.316 Accordingly, each of these harms will also be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
Chicago, Illinois 242. Much like Columbus, Baltimore, and Cincinnati, the City of Chicago, too, will be harmed by the rise in the uninsured and underinsured rate caused by Defendants’ unlawful actions, including by being forced to pay more to operate and subsidize the clinics that serve its uninsured and underinsured residents, to fund its ambulance system in the face of greater unrecouped costs from calls by uninsured and underinsured individuals, and to manage the downstream costs of a population that is necessarily sicker and less productive.
315 How ACA Marketplace Premiums Are Changing, supra n.224. 316 See Community Health Assessment 33, City of Cincinnati, https://www.cincinnatioh.gov/health/assets/File/EDIT%20THIS%20CHA_12_21_17%20FINAL.pdf (last updated Dec. 21, 2017); Selected Characteristics, supra n.293 (select table and enter “Ohio” and “Cincinnati city, Ohio”).
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243. Chicago has a Department of Public Health that seeks to promote and improve the health of city residents. The Department has an annual budget of about $177 million and is staffed by nearly 600 full-time employees.317
244. The Chicago Department of Public Health operates free or reduced-cost clinics that, as described above, will face greater demand from uninsured or underinsured individuals who cannot obtain health care elsewhere. Specifically, the Department operates five clinics that provide free vaccinations;318 five clinics that provide mental-health services at no cost for uninsured Chicago residents;319 and three clinics that provide free testing and treatment for sexually transmitted infections.320 Collectively, these clinics serve thousands of uninsured city residents.
245. The Chicago Department of Public Health also partners with community-based health centers to offer a wide array of medical services, including for uninsured patients. These health centers operate six clinics that provide primary care as well as care directed to the needs
317 City of Chicago, 2019 Budget Overview 128 https://www.chicago.gov/content/dam/city/depts/obm/supp_info/2019Budget/2019BudgetOvervi ew.pdf [hereinafter 2019 Chicago Budget Overview]. 318 Walk-In Immunization Clinics, City of Chicago, https://www.chicago.gov/city/en/depts/cdph/supp_info/health-protection/immunizations_walkinclinics.html. 319 Mental Health Centers, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/supp_info/behavioralhealth/mental_health_centers.html. 320 STI/HIV Testing and STI Treatment, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/provdrs/health_services/svcs/get_yourself_eva luatedforstihivaids.html.
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of women and children and two primary-care clinics for people living with HIV/AIDS.321 Chicago provides funding for these clinics as well.322
246. If the rate of uninsured or underinsured individuals increases, then the clinics operated by the Chicago Department of Public Health and its community-based partners will necessarily have to provide free or reduced-cost care to more patients. In that event, Chicago either must provide the Department and its partners with more funding, or the Department and its partners must decrease the services that they provide. See supra ¶ 202.
247. The Chicago Fire Department also provides ambulance transportation services to its residents, including its uninsured and underinsured residents. The Department receives about $93 million in annual funding for emergency medical services, employing more than 800 people to provide those services.323 The Department’s paramedics provide ambulance-transportation services approximately 250,000 times per year.
248. The Chicago Fire Department provides ambulance services regardless of the patient’s income or insurance status. Chicago generally seeks reimbursement for ambulance services from the patient or, if applicable, the patient’s insurer.324 But Chicago usually does not receive full reimbursement for ambulance services from its uninsured residents. In 2017, for example, the Chicago Fire Department provided ambulance services to 53,326 patients for whom no insurance was identified. Chicago charged these patients $55,242,627 for ambulance services
321 Health Services, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/provdrs/health_services.html. 322 Neighborhood Health Clinic Information 2012, City of Chicago, https://www.cityofchicago.org/city/en/depts/cdph/supp_info/clinical_health/neighborhood_healt hclinicinformation2012.html. 323 2019 Chicago Budget Overview, supra n.317, at 121. 324 Ambulance Bills, City of Chicago, https://www.cityofchicago.org/city/en/depts/fin/supp_info/revenue/ambulance_bills.html.
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but collected just $1,755,545—a loss of $53,487,082. These numbers increased in 2018, during which the Chicago Fire Department provided ambulance services to 60,007 patients for whom no insurance was identified. Chicago charged these patients $63,717,638 for ambulance services but collected just $1,028,713—a loss of $62,688,925.
249. As explained above, an increase in the number of uninsured or underinsured individuals will result in more ambulance transports for which Chicago does not receive reimbursement and thus must make up for the shortfall in its budget. See supra ¶ 203.
250. Aside from these budgetary impacts, Chicago—a city of some 2.7 million people with a gross regional product exceeding $600 billion—is, unsurprisingly, harmed by the need to care for a population that is increasingly uninsured and less healthy. As explained above, an increase in the rate of uninsured and underinsured individuals will impose additional drains on the city’s budget and its personnel and will make the city a less attractive place to live and work.
251. Each of these harms is traceable to Defendants’ unlawful actions. As explained above, Defendants’ actions increase the rate of the uninsured and underinsured, which in turn affects Chicago’s budget and diminishes Chicago’s economic prospects. CMS found that the cost of the lowest cost Silver plan in Illinois increased by 15.4 percent from 2017 to 2018, and by 5.6 percent from 2018 to 2019.325 In Cook County, the Kaiser Family Foundation found that, in 2019, after-tax credit costs will increase for Bronze plans across income levels and for Silver plans for individuals making $40,000 a year.326 Another Kaiser study confirmed that a 40-year old making $30,000 a year in Chicago faced increased after-tax credit costs for Bronze and
325 Average Monthly Premiums, supra n.288. 326 How ACA Marketplace Premiums Are Changing, supra n.224.
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Silver plans.327 One analyst found that the average unsubsidized insurance premium in Illinois in 2019 is $997 higher than it would otherwise be because of Defendants’ sabotage actions.328 Moving forward, one study estimates that Illinois has a “high risk” of a potential 50 percent premium increase.329
252. The Urban Institute projects that Defendants’ sabotage efforts, among other factors, will cause enrollment in ACA-compliant plans to decrease in Illinois by 25 percent for 2019—39.1 percent if expanded access to short-term policies is factored in330—thus increasing the rate of the uninsured and the underinsured. Indeed, 2019 open enrollment in Illinois fell by 6.8 percent. Because Chicago tends to have a higher rate of uninsured individuals than Illinois overall, Chicago is particularly exposed to Defendants’ sabotage efforts.331 Once again, each of these harms will be redressed by enjoining the challenged provisions of the 2019 Rule and Defendants’ efforts to sabotage the ACA.
Philadelphia, Pennsylvania 253. Finally, the City of Philadelphia will be harmed in all of the same ways as the other City Plaintiffs by the rise in the rates of the uninsured and underinsured caused by Defendants’ unlawful actions: it will be forced to pay more to support public health centers that serve its uninsured residents, its ambulance system will face greater unrecouped costs from calls by uninsured and underinsured individuals, and it, too, will suffer all of the downstream costs of a population that is necessarily sicker and less productive.
327 2019 Premium Changes, supra n.305. 328 The Chart that Shows the Price Tag, supra n.226. 329 March 2018 Covered California Study, supra n.159. 330 March 2018 Urban Institute Study, supra n.116, at 10. 331 Selected Characteristics, supra n.293 (select table and enter “Illinois” and “Chicago city, Illinois”).
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254. The City of Philadelphia was the first American city to provide free hospital care to its poorest residents.332 The City continued that tradition by creating the Department of Public Health in 1919.333 The Department’s mission is to “protect and promote the health of all Philadelphians and to provide a safety net for the most vulnerable.”334 The Department has an
annual budget of $136 million in the City General Fund in fiscal year 2018 and has a staff of over 1,000 employees.335
255. The Department of Public Health operates eight public community health centers
throughout Philadelphia that will face greater demand from uninsured and underinsured
individuals who cannot obtain health care elsewhere. These public health centers diagnose and
treat chronic and acute illnesses, provide medical checkups and medications for enrolled patients,
prenatal care, family planning and pregnancy options counseling, breastfeeding support services,
comprehensive pediatric care, immunizations, children’s developmental assessments, nutrition
counseling, flu shots, HIV/STD/STI testing, HIV Pre-Exposure Prophylaxis, dental care, lab tests, referrals, and social work support.336 Philadelphia’s health centers served 69,993 patients in 2017.337 The City’s data reflects that patient visits to health centers increased from Philadelphia’s
332 About Philadelphia Department of Public Health, City of Philadelphia, https://www.phila.gov/departments/department-of-public-health/about-us/. 333 Id. 334 Id. 335 City of Philadelphia, Mayor’s FY 2019 Operating Budget Detail, § 43, at 3, https://www.phila.gov/finance/pdfs/budgetdetail/Mayors%20FY%202019%20Operating%20Bud get%20Detail%20-%20Book%202.pdf [hereinafter 2019 Philadelphia Budget]. 336 About Philadelphia Health Centers, City of Philadelphia, https://www.phila.gov/services/mental-physical-health/city-health-centers/. 337 See 2017 Philadelphia, City of, Health Center Profile, Health Resources & Servs. Admin., https://bphc.hrsa.gov/uds/datacenter.aspx?q=d&bid=03E00360&state=PA&year=2017; 2017 Pennsylvania Health Center Data, Health Resources & Servs. Admin., https://bphc.hrsa.gov/uds/lookalikes.aspx?q=&bid=03E00360&state=PA&year=2017 .
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fiscal year 2015 to fiscal year 2017 by over 46,000, from 290,358 visits to 336,445 visits. To serve this growing population, the health centers had a budget of $68.6 million for Fiscal Year 2018.338
256. The City subsidizes the health centers with $53 million in public funds. Much of that funding goes to providing care to uninsured and underinsured individuals: in fiscal year 2017, over 40 percent of the nearly 70,000 patients seen were uninsured.339 These uninsured patients are charged a sliding fee scale based on income for these services, but many are unable to pay anything yet still receive services.
257. The financial effect of an increased number of uninsured people on the City’s health centers is substantial. Past experience has shown that the City’s health centers suffer fewer unrecouped costs as more of the City’s residents have health insurance: after Pennsylvania expanded Medicaid in 2015, increasing the number of insured individuals in the state and in the City, revenue for the City’s health centers grew over 15 percent from $27.1 million in 2014 to $31.4 million in 2015.
258. If the rate of uninsured or underinsured individuals increases, then the health centers will necessarily see even more uninsured patients, and Philadelphia will either have to provide them with additional funding or let them decrease the range of services they are able to provide. See supra ¶ 202.
259. Philadelphia also maintains one of the busiest Emergency Medical Services divisions in the country through the Philadelphia Fire Department.340 The Fire Department
338 2019 Philadelphia Budget, supra n.335, § 43, at 6, 34, 40. 339 See About Philadelphia Health Centers, City of Philadelphia, https://www.phila.gov/services/mental-physical-health/city-health-centers/. 340 About the Philadelphia Fire Department, City of Philadelphia, https://www.phila.gov/departments/philadelphia-fire-department/.
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dispatches EMS in all cases where there are emergency health needs, regardless of whether the person in need has health insurance or can pay for EMS services. In 2017, EMS responded to approximately 267,000 total incidents. Of the calls resulting in EMS transports (the only calls for which insurance information is tracked), 23,167, or approximately 8.7 percent, were from uninsured individuals.
260. The budget for EMS in Philadelphia is approximately $75 million. In 2017, the City was able to recoup 77 percent of costs for services from insured individuals. However, the City was only able to recoup approximately 1% of costs for services from uninsured individuals. In 2017, $23,305,367 was not recouped from EMS services provided to uninsured individuals.
261. As shown above, an increase in the number of uninsured or underinsured individuals will result in more ambulance calls for which the City does not receive reimbursement. The City will have to make up for these increased costs in its budget. See supra ¶ 203. In 2013, before the individual mandate went into effect, the number of EMS transports for uninsured individuals was 41,913. In 2014, these transports were down to 37,722, a decrease of 11 percent. As the uninsured rate goes up again, Philadelphia can expect to provide additional unreimbursed transports, which will be paid for directly by the City.
262. Aside from these direct budgetary impacts, Philadelphia—a city of nearly 1.6 million people, with a regional economy of $444.9 billion—is harmed by the need to care for a population that becomes increasingly uninsured and less healthy. An increase in the rate of uninsured and underinsured individuals will impose additional drains on the city’s budget and its personnel, and will make the city a less attractive place to live and work.
263. Once again, these harms are directly attributable to Defendants’ sabotage efforts—which have caused premiums and uninsured rates to be higher that they would
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otherwise be. CMS found that the cost of the lowest cost Silver plan in Pennsylvania increased by 12.8 percent from 2017 to 2018, and barely decreased by 2.0 percent from 2018 to 2019.341 The Kaiser Family Foundation found that, in 2019, after-tax credit costs are skyrocketing for plans across metal levels and income brackets in Philadelphia County.342 Another Kaiser study confirmed that a 40-year old making $30,000 a year would face increased after-tax credit costs for Silver and Gold plans.343 One analyst found that the average unsubsidized insurance premium in Pennsylvania in 2019 is $500 higher than it would otherwise be because of Defendants’ sabotage actions.344
264. The Urban Institute projects that Defendants’ sabotage efforts, among other factors, will cause enrollment in ACA-compliant plans to decrease in Pennsylvania by 30.3 percent for 2019—43.0 percent if expanded access to short-term policies is factored in345—thus increasing the rate of the uninsured and the underinsured. Indeed, 2019 open enrollment in Pennsylvania fell by 6 percent. Moreover, Philadelphia tends to have a higher rate of uninsured individuals than Pennsylvania overall.346 Like the other City Plaintiffs, Philadelphia is therefore particularly vulnerable to Defendants’ attempts to sabotage the ACA and the resulting increase in the rate of uninsured. Each of these harms will be redressed by countermanding the challenged provisions of the 2019 Rule specifically and Defendants’ sabotage of the ACA more generally.
341 Average Monthly Premiums, supra n.288. 342 How ACA Marketplace Premiums Are Changing, supra n.224. 343 2019 Premium Changes, supra n.305. 344 The Chart that Shows the Price Tag, supra n.226. 345 March 2018 Urban Institute Study, supra n.116, at 11. 346 Selected Characteristics, supra n.293 (select table and enter “Pennsylvania” and “Philadelphia city, Pennsylvania”).
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III. Defendants’ Unlawful Actions Harm the Individual Plaintiffs by Making Insurance Coverage Harder and More Expensive to Procure 265. Defendants’ unlawful actions have also harmed individuals and families, by
making it harder and more expensive for them to purchase health insurance on the individual market. As explained above, Defendants’ conduct has caused premiums and deductibles to skyrocket nationwide, and will only drive them higher still.
266. Every additional dollar that, owing to Defendants’ actions, an individual must spend to acquire health insurance constitutes financial harm. There can be no dispute that the rising cost of health insurance is a problem Congress specifically set out to address in enacting the ACA. Congress specifically noted its desire to “significantly reduc[e] the number of the uninsured,” and thereby “lower health insurance premiums.” 42 U.S.C. § 18091(2)(F). In other words, the ACA expressly “seeks to make insurance more affordable” for individuals and families. King, 135 S. Ct. at 2487.
267. Since President Trump took office, however, premiums for health insurance purchased on the individual market have sharply increased, as described above. Charlottesville, Virginia, has been particularly hard hit. For the 2018 benefit year, “[m]onthly health-care insurance premiums increased all over America . . . but nowhere as dramatically as in Charlottesville,” according to the Kaiser Family Foundation.347 “An exodus of carriers, which was blamed on losses caused by the instability of the Obamacare marketplace,” and in turn directly attributable to the Trump Administration’s actions, “created a coverage vacuum, leaving
347 Colby Itkowitz, Where Are the Most Expensive ACA Plans in America? Charlottesville., Washington Post, Nov. 16, 2017, https://www.washingtonpost.com/local/where-are-the-mostexpensive-aca-plans-in-america-charlottesville/2017/11/16/e1b352d8-ca27-11e7-aa9654417592cf72_story.html.
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locals and insurance regulators scrambling.”348 As a result, monthly premiums for individuals and families tripled for 2018—becoming the highest in the nation.349
268. Specifically, Optima Health, then the area’s only individual market insurer, offered plans with premiums around $2,500 to $3,000 a month for a family of four, with an annual deductible of around $10,000 to $15,000—meaning that a family would have to pay nearly $50,000 before it saw any benefit from its health insurance.350 Rising premiums and deductibles forced Charlottesville residents to resort to desperate measures to afford health insurance, including hiring an unnecessary employee to purchase small business insurance, moving to another county, cutting their own pay, obtaining a new job, or purchasing multiple non-ACA compliant plans.351
269. For all the reasons described above, Defendants’ actions have caused these staggering increases in the cost of health insurance, in Virginia and nationwide. The Virginia Bureau of Insurance reported that insurers rose rates “due to the rising cost of health care but also federal actions or inaction that raise costs and create uncertainty in the insurance
348 Rachel Bluth, The City With the Most Expensive ACA Insurance in the U.S., Atlantic, Apr. 24, 2018, https://www.theatlantic.com/health/archive/2018/04/the-city-with-the-most-expensiveaca-insurance-in-the-united-states/558605/. 349 Lisa Provence, Sticker Shock: Charlottesville Health Insurance Premiums Spike to Highest in Nation, C-Ville, Nov. 14, 2017, http://www.c-ville.com/sticker-shock-charlottesville-healthinsurance-premiums-spike-highest-nation/#.W1dgkdJKhyw. 350 Robert Pear, Middle-Class Families Confront Soaring Health Insurance Costs, New York Times, Nov. 16, 2017, https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiumsmiddle-class.html?_r=0. 351 Colby Itkowitz, Where Are the Most Expensive ACA Plans in America? Charlottesville., Washington Post, Nov. 16, 2017, https://www.washingtonpost.com/local/where-are-the-mostexpensive-aca-plans-in-america-charlottesville/2017/11/16/e1b352d8-ca27-11e7-aa9654417592cf72_story.html.
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markets.”352 Multiple independent studies have also connected rising health care premiums in Virginia to Defendants’ sabotage efforts. The Urban Institute, for example, attributed a potential 19.1 percent increase in insurance premiums in Virginia to Defendants’ policies, among other factors.353 And Covered California describes Virginia as being at “high risk” for future premium increases of up to 50 percent due to “ongoing federal uncertainty.”354
270. Optima has also placed the blame on Defendants, justifying its 2018 rate increases by pointing to “marketplace changes,” including “the uncertainty in Washington, and other carriers withdrawing from the market or reducing their service area.”355 Specifically, Optima’s 2018 rate filing attributed the increases to “growing uncertainty in the marketplace, particularly with respect to various aspects of the Affordable Care Act . . . that continue to remain undecided and unstable,” including “the effectiveness / enforceability of the individual mandate, stability of available plan options in the marketplace (e.g., carriers exiting the market), unknown funding of the CSR subsidies, and preliminary rate filings indicating substantial rate actions for 2018 across various marketplaces, including Virginia.”356 Optima’s then-CEO and President, Michael
352 Press Release, Virginia Gov. Ralph S. Northam, Governor Northam Statement on Anticipated Double-Digit Health Insurance Rate Increases (May 10, 2018), https://www.governor.virginia.gov/newsroom/all-releases/2018/may/headline-825487-en.html. 353 March 2018 Urban Institute Study, supra n.116, at 16. 354 March 2018 Covered California Post, supra n.304. 355 2018 Individual & Family Plan Information, Optima Health, https://www.optimahealth.com/plans/individual/2018-plan-coverage-information. 356 Part III Actuarial Memorandum, Optima Health Plan Individual Rate Filing 6, 28-29 Milliman (Sept. 15, 2017), http://ratereview.healthcare.gov/files/1023591_2018_I_OHP_PartIII_Act_Memo_20170915.pdf.
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Dudley, confirmed that “Optima is affected by the same factors destabilizing insurance markets
elsewhere.”357
271. Other regional insurers, like CareFirst Blue Cross Blue Shield and Evergreen
Health, have stated that Defendants are partly responsible for these substantial premium hikes.358
And still others, like Anthem, cited Defendants’ sabotage efforts in defending their decision to
exit the Virginia market, thus limiting choice and driving up prices for individual consumers.359
These are not isolated cases: a study of insurer decisionmaking by the Urban Institute found that
most insurers “remain committed to participating in the individual market,” but that their
“commitment has been tested by the continued erosion of policies designed to maintain the
stability of the individual market.”360
272. Insurers again sought to increase their rates in Virginia for 2019 by around 20
percent, reflecting the persistent effects of Defendants’ sabotage actions.361 However,
357 Robert Pear, Middle-Class Families Confront Soaring Health Insurance Costs, New York Times, Nov. 16, 2017, https://www.nytimes.com/2017/11/16/us/politics/obamacare-premiumsmiddle-class.html?_r=0. 358 Sarah Kliff, The Trump Administration Is Making Obamacare More Expensive, Vox, May 8, 2017, https://www.vox.com/2017/5/8/15563448/trump-insurance-premiums-2018. 359 Michael Martz, Anthem, State’s Largest Health Insurer, Drops Out of Virginia’s Individual Market for 2018, Richmond Times-Dispatch, Aug. 11, 2017, https://www.richmond.com/news/virginia/government-politics/anthem-state-s-largest-healthinsurer-drops-out-of-virginia/article_c704aecb-f84d-5602-92ce-a04b711edb30.html; Katie O’Connor, 58 Virginia Counties Left Without an Insurance Option in 2018 Exchanges as Deadline Approaches, Richmond Times-Dispatch, Sept. 13, 2017, https://www.richmond.com/life/health/virginia-counties-left-without-an-insurance-option-inexchanges-as/article_2e83056f-3d2e-5a04-9967-32bcbc93ea71.html. 360 Sabrina Corlette et al., Insurers Remaining in Affordable Care Act Markets Prepare for Continued Uncertainty in 2018, 2019 at 3, Urban Institute (Mar. 2018), https://www.rwjf.org/content/dam/farm/reports/issue_briefs/2018/rwjf444308. 361 John Tozzi, Obamacare Premiums to Surge Next Year, Early Requests Show, Bloomberg, May 7, 2018, https://www.bloomberg.com/news/articles/2018-05-07/obamacare-premiums-tosurge-next-year-early-rate-requests-show.
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Charlottesville saw some relief: Anthem re-entered the Charlottesville market, and Optima slightly decreased its rates. That reduction, though, comes nowhere close to canceling out the impact of Optima’s staggering rate increases in the past,362 and Anthem raised its statewide rates by 3.2 percent over 2018.363 Both Optima’s and Anthem’s rates would be lower in the absence of Defendants’ attempts to sabotage the ACA. Indeed, one analyst found that the average unsubsidized insurance premium in Virginia in 2019 is $1,078 higher than it would otherwise be because of Defendants’ sabotage actions.364
273. Steve Vondra and Bonnie Morgan, a married couple who have been residents of Charlottesville since 2009 and 2010, respectively, have therefore been forced to pay higher premiums for lower-quality insurance because of Defendants’ actions.
274. Steve has a preexisting condition. Before the ACA, Steve’s health insurance situation was precarious: he had not had health insurance since 2005, when he closed his business. He was unable to purchase insurance because, at the time, insurers were able to discriminate against individuals on the basis of their health history and health status. While Bonnie had insurance through her work, Steve was ineligible, as the two were not married at the time.
275. After the ACA prohibited discrimination on the basis of preexisting conditions, Steve and Bonnie were finally able to purchase insurance on the individual exchange. In 2016, they purchased a Bronze plan with a premium of around $1050 a month for the two of them.
362 Id. 363 Elizabeth Simpson, Anthem Re-Enters 42 Markets in Virginia’s Affordable Care Act Exchange, Including Hampton Roads, Virginian-Pilot, Aug. 14, 2018, https://pilotonline.com/news/local/health/article_8e16e5bc-9fc5-11e8-ac8c-fbe7eea0f98c.html 364 The Chart that Shows the Price Tag, supra n.226.
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They subsequently upgraded their coverage in 2017 to a Silver plan with a premium of around $1270 a month.
276. Defendants’ attempts to sabotage the ACA, however, have dramatically increased the prices Steve and Bonnie pay for coverage. Steve and Bonnie do not receive subsidized coverage (advance premium tax credits) under the Act. In 2018, Steve and Bonnie returned to a Bronze plan, sold by Optima. However, the monthly premium rose to a staggering $3327.65 for the two of them—a 261 percent increase above what they paid for a Silver plan in 2017. Moreover, the plan’s annual deductible, around $14,400, was also significantly higher than the deductible for the plans they purchased in 2016 and 2017. Combining a year’s worth of premiums and the annual deductible, Steve and Bonnie would have had to spend nearly $55,000 before receiving any benefit from their insurance.
277. Similarly, in 2019, Steve and Bonnie are paying prices higher than they would otherwise have to pay because of Defendants’ actions. Steve and Bonnie enrolled in a Bronze plan, sold by Anthem, with a premium of $1,899.49 for the two of them—and a $13,000 deductible. While the plan is cheaper than the plan they purchased in 2018, it remains significantly more expensive than the plans they had in 2017 and 2016, before Defendants’ sabotage actions took hold. Combining a year’s worth of premiums and the annual deductible, Steve and Bonnie would still have to spend nearly $35,794 before receiving any benefit. Their plan is also more expensive than it was in 2018 by an average of 2.5 percent—an increase Anthem justified in its 2019 rate filing as a response to “the elimination of the individual
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mandate penalty for lack of minimum essential coverage and potential movement into other markets,” namely, the non-ACA compliant plans promoted by Defendants.365
278. Steve and Bonnie have therefore been injured by having to pay higher premiums and deductibles for their health coverage—the very injury the ACA was intended to prevent. That injury is the direct result of Defendants’ ongoing attempts to sabotage the ACA, including the 2019 Rule and Defendants’ other unlawful actions. And Steve and Bonnie’s injury would be redressed if Defendants were instead required to implement the ACA lawfully and in good faith.
CLAIMS FOR RELIEF Count One (Violation of the Administrative Procedure Act) 279. Plaintiffs repeat and incorporate by reference each of the foregoing allegations as if fully set forth herein. 280. The 2019 Rule is “final agency action for which there is no other adequate remedy in a court” and is “subject to judicial review.” 5 U.S.C. § 704; see id. § 702. 281. Under the Administrative Procedure Act, a “reviewing court shall . . . hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. § 706(2)(A). 282. As detailed above, Defendants HHS, Secretary Azar, CMS, and Administrator Verma have failed to provide adequate reasons, and failed to adequately respond to comments, for many provisions of the 2019 Rule, such that they are “arbitrary” and “capricious.” Id. In addition, as also detailed above, many provisions of the 2019 Rule violate the Affordable Care Act, and therefore are “not in accordance with law.” Id. Accordingly, upon application by the
365 Actuarial Memorandum, HealthCare.gov, https://ratereview.healthcare.gov/files/787675_20180820VA88380IndOnOffRedactedAM.pdf.
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specified Plaintiffs, this Court must “hold unlawful and set aside” the following provisions of the 2019 Rule:
a. The provision depriving taxpayers of advance premium tax credits for failing to reconcile credits for prior years on their tax returns without direct notification of their ineligibility. See supra ¶¶ 52-56. (Columbus, Baltimore, Cincinnati, Chicago, Philadelphia, Individual Plaintiffs)
b. The provision outsourcing plan review on FFEs to states. See supra ¶¶ 5763. (Columbus, Cincinnati, Philadelphia, Individual Plaintiffs)
c. The provision allowing insurance agents, brokers, and insurers to select their own third-party auditors. See supra ¶¶ 64-68. (Columbus, Cincinnati, Chicago, Philadelphia, Individual Plaintiffs)
d. The provision discontinuing support for standardized option insurance plans. See supra ¶¶ 70-74. (Columbus, Cincinnati, Chicago, Philadelphia, Individual Plaintiffs)
e. The provisions eliminating the requirements that exchanges have at least two Navigators, that one of those Navigators be a community non-profit, and that Navigators have a physical presence in the state. See supra ¶¶ 7579. (Columbus, Baltimore, Cincinnati, Chicago, Philadelphia, Individual Plaintiffs)
f. The provision eliminating requirements that Small Business Health Options Program Health Insurance Exchanges maintain employee eligibility, premium aggregation, and online enrollment functionality. See supra ¶¶ 80-82. (Columbus, Cincinnati, Chicago, Philadelphia)
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g. The provision requiring consumers who attest to income between 100

percent and 400 percent of the federal poverty line to verify their income

if available electronic data sources indicate their income to be below the

federal poverty line. See supra ¶¶ 83-86. (Columbus, Cincinnati, Chicago,

Philadelphia, Individual Plaintiffs)

h. The provisions exempting student health insurance plans from rate review

and increasing the threshold for insurance rate increases subject to review

to 15 percent. See supra ¶¶ 88-93. (Columbus, Baltimore, Cincinnati,

Chicago, Philadelphia, Individual Plaintiffs)

i.

The provision allowing insurers to claim a standard 0.8 percent of

premium for quality improvement activities when calculating medical loss

ratio. See supra ¶¶ 94-98. (Columbus, Baltimore, Cincinnati, Chicago,

Philadelphia, Individual Plaintiffs)

Count Two (Violation of the Take Care Clause)

283. Plaintiffs repeat and incorporate by reference each of the foregoing allegations as

if fully set forth herein.

284. Under the Take Care Clause of the U.S. Constitution, the President and his or her

Administration must “take care that the laws be faithfully executed.” U.S. Const. art. II, § 3.

285. As detailed above, Defendants have violated the Take Care Clause by failing to

take care to faithfully execute the Affordable Care Act.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that this Court:

1. declare that the provisions of the 2019 Rule identified in Count One are arbitrary,

capricious, or otherwise not in accordance with law under the Administrative Procedure Act;

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2. vacate the provisions of the 2019 Rule identified in Count One under the

Administrative Procedure Act;

3. declare that Defendants are violating the Take Care Clause by not faithfully

executing the Affordable Care Act;

4. declare that Defendants are violating the Take Care Clause by taking executive

action to:

a. suppress the number of individuals and families obtaining health insurance

through ACA exchanges;

b. increase premiums for health insurance in the ACA exchanges;

c. diminish the availability of comprehensive, reasonably-priced health

insurance for individuals and families with preexisting conditions;

d. discourage individuals and families from obtaining health insurance that

provides the coverage that Congress, in the ACA, determined is necessary

to protect American families against the physical and economic

devastation that results from lesser insurance, with limits on coverage that

leaves them unable to cover the costs of an accident or unexpected illness;

5. order Defendants to comply with their constitutional obligation to take care to

faithfully execute the ACA, including by acting to:

a.

expand, rather than suppress, the number of individuals and families

obtaining health insurance through ACA exchanges;

b.

reduce, rather than increase, premiums for health insurance in the ACA

exchanges;

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Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 145 of 148

c.

promote, rather than diminish, the availability of comprehensive,

reasonably-priced health insurance for individuals and families with

preexisting conditions;

d.

encourage, rather than discourage, individuals and families to obtain

health insurance that provides the coverage that Congress, in the ACA,

determined is necessary to protect American families against the physical

and economic devastation that results from lesser insurance, with limits on

coverage that leaves them unable to cover the costs of an accident or

unexpected illness;

6. enjoin Defendants from implementing Executive Order No. 13,765 so as to

undermine, rather than faithfully execute, the ACA;

7. order Defendants to fully fund advertising under the ACA;

8. enjoin Defendants from producing and disseminating advertisements that aim to

undermine the ACA;

9. order Defendants to fully fund Navigators under the ACA;

10. enjoin Defendants from incentivizing Navigators to advertise non-ACA compliant

plans;

11. order Defendants to expand open enrollment;

12. order Defendants to resume participation in enrollment events and other outreach

activities under the ACA;

13. order Defendants to faithfully enforce the individual mandate as prescribed in the

ACA (as amended);

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14. order Defendants to process states’ waiver applications under the ACA so as to

faithfully implement the Act;

15. enjoin Defendants from implementing Executive Order No. 13,813 so as to

undermine, rather than faithfully execute, the ACA;

16. award Plaintiffs their costs, attorneys’ fees, and other disbursements for this

action; and

17. grant any other relief this Court deems appropriate.

Dated: January 25, 2019

Respectfully submitted,

City of Columbus Zach Klein (OH Bar No. 0078222) City Attorney

Javier M. Guzman (D.C. Bar No. 462679) (pro hac vice)
Legal Director

Lara N. Baker-Morrish (OH Bar No. 0063721) City Solicitor General
Charles P. Campisano (OH Bar No. 0095201) Jennifer L. Shea (OH Bar No. 0085239) Assistant City Attorneys
Columbus City Attorney’s Office 77 N. Front St., 4th Floor Columbus, OH 43215 (614) 645-7385 zmklein@columbus.gov lnbaker-morrish@columbus.gov cpcampisano@columbus.gov jlshea@columbus.gov
Mayor and City Council of Baltimore Andre M. Davis #00362 City Solicitor
Suzanne Sangree #26130 Senior Counsel for Public Safety & Director of Affirmative Litigation

/s/ Adam Grogg Adam Grogg (D.C. Bar No. 1552438) (pro hac
vice) Senior Counsel
John Lewis (D.C. Bar No. 1033826) (pro hac vice)
Counsel
Democracy Forward Foundation 1333 H St. NW Washington, DC 20005 (202) 448-9090 jguzman@democracyforward.org agrogg@democracyforward.org jlewis@democracyforward.org
Sara E. Kropf (D. Md. Bar No. 26818) Law Office of Sara Kropf, PLLC 701 8th St. NW, Suite 300 Washington, DC 20001 (202) 627-6900 sara@kropf-law.com

Elizabeth R. Martinez #29394 Assistant Solicitor, Litigation

Counsel for Plaintiffs

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Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 147 of 148
City of Baltimore Department of Law City Hall, Room 109 100 N. Holliday St. Baltimore, MD 21202 (443) 388-2190 andre.davis@baltimorecity.gov suzanne.sangree2@baltimorecity.gov liz.martinez@baltimorecity.gov
City of Cincinnati Paula Boggs Muething (OH Bar No. 0080018) City Solicitor
Office of the City Solicitor, Cincinnati City Hall, Room 214 801 Plum St. Cincinnati, OH 45202
City of Chicago Edward N. Siskel (IL Bar No. 6279423) Corporation Counsel
Jane Elinor Notz (IL Bar No. 6270361) Deputy Corporation Counsel Affirmative Litigation Division
Stephen J. Kane (IL Bar No. 6272490) Assistant Corporation Counsel Affirmative Litigation Division
City of Chicago Department of Law 121 N. LaSalle St., Room 600 Chicago, IL 60602 edward.siskel@cityofchicago.org
City of Philadelphia Marcel S. Pratt Solicitor of the City of Philadelphia
Diana P. Cortes (PA Bar No. 204274) Chair, Litigation Group
Eleanor N. Ewing (PA Bar No. 28226) Chief Deputy Solicitor, Affirmative & Special Litigation Unit
143

Case 1:18-cv-02364-DKC Document 44 Filed 01/25/19 Page 148 of 148 Benjamin H. Field (PA Bar No. 204569) Divisional Deputy City Solicitor, Affirmative & Special Litigation Unit City of Philadelphia Law Department 1515 Arch Street, 17th Floor Philadelphia, PA 19102 diana.cortes@phila.gov eleanor.ewing@phila.gov benjamin.field@phila.gov (215) 683-5000
144

 
 Case 1:18-cv-02364-DKC Document 65-1 Filed 06/07/19 Page 1 of 22

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

CITY OF COLUMBUS, et al.,
Plaintiffs,
v.
DONALD J. TRUMP, in his official capacity as President of the United States of America, et al.,
Defendants.

Case No. 1:18-cv-02364-DKC

BRIEF OF U.S. HOUSE OF REPRESENTATIVES AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS

Douglas N. Letter General Counsel Megan Barbero Associate General Counsel
OFFICE OF GENERAL COUNSEL U.S. HOUSE OF REPRESENTATIVES 219 Cannon House Office Building Washington, D.C. 20515 Tel: (202) 225-9700 Douglas.Letter@mail.house.gov

Elizabeth B. Wydra Brianne J. Gorod Ashwin P. Phatak CONSTITUTIONAL ACCOUNTABILITY
CENTER 1200 18th Street N.W., Suite 501 Washington, D.C. 20036-2513 Tel: (202) 296-6889 elizabeth@theusconstitution.org brianne@theusconstitution.org ashwin@theusconstitution.org

Counsel for Amicus U.S. House of Representatives

Case 1:18-cv-02364-DKC Document 65-1 Filed 06/07/19 Page 2 of 22

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .................................................................................................. ii
INTEREST OF AMICUS CURIAE......................................................................................... 1
INTRODUCTION .................................................................................................................. 1
ARGUMENT .......................................................................................................................... 3
THE AFFORDABLE CARE ACT WAS DESIGNED TO EXPAND HEALTH CARE BENEFITS AND PROTECTIONS, YET THE TRUMP ADMINISTRATION HAS MADE SIGNIFICANT EFFORTS TO UNDERMINE THAT GOAL ................................. 3
A. The Affordable Care Act Responded to Serious Problems in America’s Health Care System That Had Left Millions Without Quality, Affordable Insurance ........ 3
B. Congress Passed the Affordable Care Act To Expand Access to Quality, Affordable Health Insurance, and the Act’s Reforms Have Been Remarkably Successful ................................................................................................................. 5
C. The Administration’s Various Actions Undermine the Affordable Care Act .......... 10
CONCLUSION....................................................................................................................... 15

(i)

Case 1:18-cv-02364-DKC Document 65-1 Filed 06/07/19 Page 3 of 22

TABLE OF AUTHORITIES
CASES
Fla. ex rel. Atty. Gen. v. U.S. Dep’t of Health & Human Servs., 648 F.3d 1235 (11th Cir. 2011) .................................................................................
King v. Burwell, 135 S. Ct. 2480 (2015) ..............................................................................................
King v. Burwell, 759 F.3d 358 (4th Cir. 2014) .....................................................................................
NFIB v. Sebelius, 567 U.S. 519 (2012) ..................................................................................................

Page(s)
5 5, 7, 8
8 2, 5

STATUTES AND LEGISLATIVE MATERIALS

2 U.S.C. § 5571(a) .........................................................................................................

15

26 U.S.C. § 36B .............................................................................................................

8

26 U.S.C. § 4980H.........................................................................................................

6

26 U.S.C. § 4980H(a) ....................................................................................................

6

29 U.S.C. § 218a ............................................................................................................

6

42 U.S.C. § 300gg(a) .....................................................................................................

7

42 U.S.C. § 300gg-1 ......................................................................................................

7

42 U.S.C. § 300gg-3 ......................................................................................................

7

42 U.S.C. § 300gg-4 ......................................................................................................

7

42 U.S.C. § 300gg-4(b)..................................................................................................

7

42 U.S.C. § 300gg-6(a) ..................................................................................................

6

42 U.S.C. § 300gg-11 ....................................................................................................

6

42 U.S.C. § 300gg-12 ....................................................................................................

6

42 U.S.C. § 300gg-13 ....................................................................................................

6

42 U.S.C. § 300gg-14 ....................................................................................................

6

ii

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TABLE OF AUTHORITIES – cont’d

Page(s)

42 U.S.C. § 1396a(a)(10) ...............................................................................................

5

42 U.S.C. § 1396a(a)(10)(A)(i)(VIII) ............................................................................

6

42 U.S.C. § 18022(b)(1) ................................................................................................

7

42 U.S.C. § 18031(b)(1) ................................................................................................

7

42 U.S.C. § 18031(d)(4)(B) ...........................................................................................

8

42 U.S.C. § 18031(d)(4)(C) ...........................................................................................

9

42 U.S.C. § 18031(d)(4)(D) ...........................................................................................

9

42 U.S.C. § 18031(d)(4)(E) ...........................................................................................

9

42 U.S.C. § 18031(d)(4)(K) ...........................................................................................

9

42 U.S.C. § 18031(i)(3)(A)............................................................................................

9

42 U.S.C. § 18031(i)(3)(B) ............................................................................................

9

42 U.S.C. § 18031(i)(3)(C) ............................................................................................

9

42 U.S.C. § 18031(i)(4)(A)............................................................................................

9

42 U.S.C. § 18041(c)(1).................................................................................................

7

42 U.S.C. § 18071..........................................................................................................

8

42 U.S.C. § 18081..........................................................................................................

8

42 U.S.C. § 18082..........................................................................................................

8

42 U.S.C. § 18091(2)(D)................................................................................................ 1, 6, 10

45 C.F.R. § 155.410(e) (2017) .......................................................................................

12

CBO’s Analysis of the Major Health Care Legislation Enacted in Mar. 2010 Before the H.

Subcomm. on Health of the Comm. on Energy & Com., 112th Cong. (Mar. 30,

2011) ..........................................................................................................................

6

Congressional Oversight Hearing on the Impact of the Administration’s Policies Affecting

the Affordable Care Act Before the H. Appropriations Subcomm. on Labor, Health, &

Human Servs., 116th Cong. (Feb. 6, 2019),

https://docs.house.gov/meetings/AP/AP07/20190206/108858/HHRG-116-AP07-

Wstate-PeckJ-20190206.pdf......................................................................................

13

iii

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TABLE OF AUTHORITIES – cont’d

Page(s)

Examining Threats to Workers with Preexisting Conditions Before the H. Educ. & Labor

Comm., 116th Cong. (Feb. 6, 2019),

https://edlabor.house.gov/imo/media/doc/Testimony_Corlette0206192.pdf ............

13

Exchange and Insurance Market Standards for 2015 and Beyond, 79 Fed. Reg. 15,808

(Mar. 21, 2014)..........................................................................................................

11

HHS Notice of Benefit and Payment Parameters for 2017, 80 Fed. Reg. 75,488 (Dec. 2,

2015) ..........................................................................................................................

11

H.R. Rep. No. 111-299, Pt. 1 (2009) .............................................................................

3, 4

H.R. Rep. No. 111-299, Pt. 3 (2009) ............................................................................. 3, 4, 5

Market Stabilization, 82 Fed. Reg. 18,346 (Apr. 18, 2017) ..........................................

12

Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (Apr. 17, 2018).......................................................................................................................... 3, 10, 11

Rules of the U.S. House of Representatives (116th Cong.)...........................................

1

BOOKS, ARTICLES, AND OTHER MATERIALS

American Academy of Actuaries, An Evaluation of the Individual Health Insurance

Market and Implications of Potential Changes (Jan. 2017),

https://www.actuary.org/files/publications/Acad_eval_indiv_mkt_ 011817.pdf .....

8

David Blumenthal & Sara Collins, Where Both the ACA and AHCA Fall Short, and What

the Health Insurance Market Really Needs, Harv. Bus. Rev. (Mar. 21, 2017),

https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-the-health-

insurance-market-really-needs ..................................................................................

4

Adrian Garcia Mosqueira & Benjamin D. Sommers, Better Outreach Critical to ACA

Enrollment, Particularly for Latinos, The Commonwealth Fund (Jan. 14, 2016),

http://www.commonwealthfund.org/publications/blog/2016/jan/better-outreach-critical-

to-aca-enrollment-particularly-for-latinos .................................................................

11

Sarah E. Gollust et al., TV Advertising Volumes Were Associated with Insurance

Marketplace Shopping and Enrollment in 2014, 37 Health Affairs 956 (2018).......

13

Kate Heyer et al., RAND Corp., Assessing the Role of State and Local Public Health in

Outreach and Enrollment for Expander Coverage: A Case Study on Boston and

Massachusetts (2016) (eBook) ..................................................................................

14

iv

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TABLE OF AUTHORITIES – cont’d

Page(s) Paul R. Shafer et al., Television Advertising and Health Insurance Marketplace Consumer
Engagement in Kentucky: A Natural Experiment, 20 J. Med. Internet Res. (2018) . 12, 13

Benjamin D. Sommers et al., The Impact of State Policies on ACA Applications and

Enrollment Among Low-Income Adults in Arkansas, Kentucky, and Texas, 34 Health

Affairs 1010 (2015) ...................................................................................................

13

Jennifer Tolbert et al., Connecting Consumers to Coverage: Lessons Learned from

Assisters for Successful Outreach and Enrollment (Sept. 19, 2014),

http://files.kff.org/attachment/connecting-consumers-to-coverage-issue-brief ........

11

Namrata Uberio et al., Health Insurance Coverage and the Affordable Care Act, 20102016, Dep’t of Health & Human Servs. (Mar. 3, 2016), https://aspe.hhs.gov/system/files/pdf/187551/ACA2010-2016.pdf ..........................

9, 10

U.S. Gov’t Accountability Office, GAO-18-565, Health Insurance Exchanges: HHS Should Enhance Its Oversight of Open Enrollment Performance (July 2018) .........

13, 14

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Case 1:18-cv-02364-DKC Document 65-1 Filed 06/07/19 Page 7 of 22
INTEREST OF AMICUS CURIAE1 Amicus curiae is the United States House of Representatives (“the House”),2 which has a
strong institutional interest in the effective implementation of the Patient Protection and
Affordable Care Act (“the Affordable Care Act” or “the Act”) and ensuring that the millions of
Americans who have benefited from its reforms and protections continue to do so. In 2010, the
House passed the Affordable Care Act after significant study into the problems with then-existing
health insurance markets, and the House is thus particularly well suited to explain to the Court why
Congress enacted this landmark legislation and how it has helped ensure that all Americans,
including those with preexisting conditions, have access to quality, affordable health insurance.
During the 116th Congress, the House has held multiple hearings on actions taken by President
Trump and his Administration that threaten to undermine the benefits and protections provided by
the Act, and thus amicus also has unique knowledge about, and a strong interest in, the question
whether the Trump Administration’s actions are consistent with the plan that Congress put in place
when it passed the Affordable Care Act.
INTRODUCTION
In 2010, Congress passed the Affordable Care Act, a landmark law that sought to achieve
“near-universal coverage,” 42 U.S.C. § 18091(2)(D), by making quality, affordable health
1 No person or entity other than amicus and its counsel assisted in or made a monetary contribution to the preparation or submission of this brief.
2 The Bipartisan Legal Advisory Group (BLAG) of the United States House of Representatives has authorized the filing of an amicus brief in this matter. The BLAG comprises the Honorable Nancy Pelosi, Speaker of the House, the Honorable Steny H. Hoyer, Majority Leader, the Honorable James E. Clyburn, Majority Whip, the Honorable Kevin McCarthy, Republican Leader, and the Honorable Steve Scalise, Republican Whip, and “speaks for, and articulates the institutional position of, the House in all litigation matters.” Rules of the U.S. House of Representatives (116th Cong.), Rule II.8(b), available at https://tinyurl.com/HouseRules116thCong. The Republican Leader and Republican Whip dissented.
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insurance available to all Americans. When Congress passed the Affordable Care Act, it was responding to serious problems affecting America’s insurance and health care systems. Many employers failed to offer coverage to their employees, and only a limited number of individuals were eligible for government health insurance programs like Medicaid. Moreover, those who could not obtain coverage through their employer or Medicaid were forced to try their luck in the individual marketplace. That marketplace was plagued with sky-high prices, care that was not comprehensive, and discriminatory practices that prevented millions of Americans from obtaining coverage. As a result, one-seventh of the American population lacked health insurance.
In response to these systemic flaws, Congress passed the Affordable Care Act “to increase the number of Americans covered by health insurance and decrease the cost of health care.” Nat’l Fed’n of Indep. Bus. v. Sebelius (NFIB), 567 U.S. 519, 538 (2012) (opinion of Roberts, C.J.). The law thus includes a number of provisions designed to expand access to health insurance to as many Americans as possible. First, it expands Medicaid to all low-income individuals. Second, it prevents insurers from discriminating on the basis of preexisting conditions, and includes a number of other protections designed to ensure that insurers offer comprehensive care to a wide swath of consumers. Third, it creates a system of American Health Benefit Exchanges (“Exchanges”) whereby individuals who do not receive health insurance through their employer or through Medicaid can easily compare and purchase health insurance in the individual marketplace, and it provides tax credits to subsidize the cost of insurance for many lower- and middle-income individuals. Finally, the Act includes many provisions designed to assist individuals with obtaining coverage on the Exchanges. These various provisions were all designed with one primary goal in mind: to reduce the number of Americans who do not have access to quality, affordable coverage.
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Over the last two years, the Trump Administration has repeatedly taken steps to undermine Congress’s goal of expanding coverage. For instance, the Centers for Medicare and Medicaid Services recently promulgated a Rule that ends the requirement that Exchanges provide “standardized options,” which make it easier for consumers to compare plans and more likely that they will purchase insurance. See Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930, 16,974-75 (Apr. 17, 2018). That same Rule also ends the requirement that Navigators—entities that assist individuals with signing up for insurance—have a physical presence in the area they serve, seriously undermining their effectiveness. The Administration has also taken steps designed to reduce enrollment on the Exchanges. The Administration has, among many other things, shortened the open enrollment period, drastically reduced funding for advertisements to educate consumers about the Exchanges, cut funding for Navigators, and failed to set numeric enrollment targets. Through all of these actions, the Administration has undermined the Affordable Care Act, and it has harmed the millions of Americans who depend on the Act to access quality, affordable health insurance.
ARGUMENT THE AFFORDABLE CARE ACT WAS DESIGNED TO EXPAND HEALTH CARE BENEFITS AND PROTECTIONS, YET THE TRUMP ADMINISTRATION HAS MADE SIGNIFICANT EFFORTS TO UNDERMINE THAT GOAL.
A. The Affordable Care Act Responded to Serious Problems in America’s Health Care System That Had Left Millions Without Quality, Affordable Insurance. Congress passed the Affordable Care Act in response to serious problems plaguing
America’s health care system. See H.R. Rep. No. 111-299, Pt. 3, at 55 (2009) (“The U.S. health care system is on an unsustainable course.”). In 2007, “more than 45.7 million people were uninsured . . . , representing more than one-seventh of the population.” H.R. Rep. No. 111-299, Pt. 1, at 320 (2009). This uninsured rate was caused by a number of different factors. First, while
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almost all large employers offered their employees health insurance benefits, “[l]ess than half of all small employers (less than 50 employees) offer[ed] health insurance coverage to their employees.” Id. at 322. Indeed, there was “no federal requirement that employers offer health insurance coverage to employees or their families.” H.R. Rep. No. 111-299, Pt. 3, at 134.
Second, at the time the Affordable Care Act was passed, health care costs were skyrocketing, making it difficult for most Americans to purchase their own insurance in the individual marketplace. “Between 1999 and 2008, health insurance premiums more than doubled as wages largely stagnated.” Id. at 55-56 (citing testimony of Jacob Hacker).3 On top of that, the United States “spen[t] substantially more than other developed countries on health care, both per capita and as a share of GDP.” H.R. Rep. No. 111-299, Pt. 1, at 320. This dramatic increase in health care costs affected employers—who “face[d] a growing challenge paying for health benefits while managing labor costs to succeed in a competitive market,” id.—and federal and state budgets—“both directly, through spending on Medicare, Medicaid, and other programs, and indirectly, through tax expenditures for health insurance and expenses,” id. at 320-21.
Third, insurance companies in many States were permitted to discriminate against individuals with preexisting conditions. Because “‘20 percent of the population account[ed] for 80 percent of health spending’” in 2009, “health insurers—particularly in the individual market— . . . adopted discriminatory, but not illegal, practices to cherry-pick healthy people and to weed out those who [we]re not as healthy.” H.R. Rep. No. 111-299, Pt. 3, at 92 (quoting testimony of Karen Pollitz). Such practices included: “denying health coverage based on pre-
3 See David Blumenthal & Sara Collins, Where Both the ACA and AHCA Fall Short, and What the Health Insurance Market Really Needs, Harv. Bus. Rev. (Mar. 21, 2017), https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-the-health-insurancemarket-really-needs (“premiums for . . . policies [in the individual market] were increasing more than 10% a year, on average, while the policies themselves had major deficiencies”).
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existing conditions or medical history, even minor ones; charging higher, and often unaffordable, rates based on one’s health; excluding pre-existing medical conditions from coverage; charging different premiums based on gender; and rescinding policies after claims [we]re made based on an assertion that an insured’s original application was incomplete.” Id. As a result of these practices, “many uninsured Americans—ranging from 9 million to 12.6 million—voluntarily sought health coverage in the individual market but were denied coverage, charged a higher premium, or offered only limited coverage that excludes a preexisting condition.” Fla. ex rel. Atty. Gen. v. U.S. Dep’t of Health & Human Servs., 648 F.3d 1235, 1245 (11th Cir. 2011), aff’d in part, rev’d in part by NFIB, 567 U.S. 519. Congress found that “[d]iscrimination based on health, gender and other factors has severe economic consequences for those who have been unable to find affordable health coverage and for those who have coverage, but are under-insured.” H.R. Rep. No. 111-299, Pt. 3, at 92.
Finally, millions of Americans who were not provided insurance benefits by their employers and could not afford or were denied coverage in the individual market were also ineligible for insurance through government programs like Medicaid. Indeed, at the time, Medicaid offered federal funding to States only “to assist pregnant women, children, needy families, the blind, the elderly, and the disabled in obtaining medical care.” NFIB, 567 U.S. at 541 (citing 42 U.S.C. § 1396a(a)(10)).
B. Congress Passed the Affordable Care Act To Expand Access to Quality, Affordable Health Insurance, and the Act’s Reforms Have Been Remarkably Successful. In light of these serious and systemic problems that had resulted in millions of Americans
who could not access quality, affordable health insurance, Congress passed the Affordable Care Act “to expand coverage” while keeping health care costs in check. King v. Burwell, 135 S. Ct. 2480, 2485 (2015); see NFIB, 567 U.S. at 538 (“The Act aims to increase the number of Americans
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Case 1:18-cv-02364-DKC Document 65-1 Filed 06/07/19 Page 12 of 22
covered by health insurance and decrease the cost of health care.”); 42 U.S.C. § 18091(2)(D) (the Act aims to achieve “near-universal coverage”). It does so in three primary ways. First, the Act expands Medicaid to provide funding to States to provide coverage to all individuals earning up to 133% of the federal poverty level. See id. § 1396a(a)(10)(A)(i)(VIII). This expansion was estimated to provide coverage to millions of Americans. See CBO’s Analysis of the Major Health Care Legislation Enacted in Mar. 2010 Before the H. Subcomm. on Health of the Comm. on Energy & Com., 112th Cong. 22-23 (Mar. 30, 2011) (statement of Douglas Elmendorf, Director, Cong. Budget Office).
Second, the Act includes various market reforms designed to expand access to insurance coverage. For instance, the Act requires large employers to offer insurance to their employees or pay a penalty, 26 U.S.C. § 4980H; to automatically enroll new and current employees of large employers in an employer-sponsored plan unless an employee opts out, 29 U.S.C. § 218a; and to offer adequate health insurance plans, 26 U.S.C. § 4980H(a). The Act also includes numerous other important provisions that, for example, prohibit insurers from imposing lifetime dollar limits on the value of coverage, 42 U.S.C. § 300gg-11; prohibit insurers from rescinding coverage except in the case of fraud, id. § 300gg-12; require individual and group health plans to cover preventive services without cost sharing, id. § 300gg-13; and allow children to stay on their parents’ health insurance until age 26, id. § 300gg-14.
The Act further addresses the inadequacy of benefits in the individual and small group markets by expressly providing that insurance offered in those markets must include “essential health benefits.” 42 U.S.C. § 300gg-6(a) (“A health insurance issuer that offers health insurance coverage in the individual or small group market shall ensure that such coverage includes the essential health benefits package required under section 18022(a) of this title.”). While the law
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gave the Secretary of Health and Human Services authority to define what those “essential health benefits” would be, the law specified that “such benefits shall include at least the following general categories”: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative and habilitative services, laboratory services, preventive and wellness services and chronic disease management, and pediatric services, including oral and vision care. Id. § 18022(b)(1). All of these reforms were designed to allow more Americans access to comprehensive insurance coverage.
Third, the Act includes reforms that ensure that no American is denied the ability to purchase health insurance. The Act prevents discrimination on the basis of preexisting conditions by including a guaranteed-issue provision prohibiting insurers from denying coverage to any individual because of a medical condition or their medical history, see id. §§ 300gg-1, 300gg-3, 300gg-4, and a community-rating provision prohibiting insurers from charging higher premiums because of an individual’s preexisting medical conditions, id. §§ 300gg(a), 300gg-4(b).
Finally, for individuals who are not eligible for Medicaid and do not receive insurance from their employer, the Act provides for the creation of Exchanges through which individuals can purchase health insurance for themselves and their families. The Act “requires the creation of an ‘Exchange’ in each State where people can shop for insurance, usually online.” King, 135 S. Ct. at 2487 (citing 42 U.S.C. § 18031(b)(1)). Generally, States were tasked with setting up these Exchanges, see 42 U.S.C. § 18031(b)(1), but if a State declined to do so, the Secretary of Health and Human Services was required to “establish and operate such Exchange within the State.” Id.
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§ 18041(c)(1).4 The Act then “s[ought] to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line.” King, 135 S. Ct. at 2487 (citing 26 U.S.C. § 36B). “Individuals who meet the Act’s requirements may purchase insurance with the tax credits, which are provided in advance directly to the individual’s insurer.” Id. (citing 42 U.S.C. §§ 18081, 18082); see King v. Burwell, 759 F.3d 358, 364 (4th Cir. 2014), aff’d by King, 135 S. Ct. 2480 (“The Exchanges facilitate this process by advancing an individual’s eligible tax credit dollars directly to health insurance providers as a means of reducing the upfront cost of plans to consumers.”). The Act also requires insurers to reduce certain cost-sharing expenses—like deductibles and co-payments—for lower income individuals, and requires the Department of Health and Human Services to reimburse insurers for these cost-sharing reductions. See 42 U.S.C. § 18071.
The existence of the Exchanges and tax credits for purchasing insurance is critical to Congress’s goal of expanding coverage: the Exchanges allow individuals to explore different insurance plans for themselves and their families and to purchase insurance online, while the tax credits make this coverage affordable for lower income Americans who are ineligible for Medicaid. Moreover, because the Exchanges work most effectively when “[i]ndividual enrollment” is sufficiently high, and there is a “balanced risk pool,”5 the Act included a number of different provisions to facilitate enrollment. For example, the Act requires Exchanges to “provide for the operation of a toll-free telephone hotline to respond to requests for assistance,” 42 U.S.C. § 18031(d)(4)(B), and “an Internet website through which enrollees and prospective enrollees of
4 As of 2018, 12 States operate State Exchanges, 28 States rely on the federal government to run their Exchanges, and 11 States have a hybrid Exchange of some sort. Am. Compl. 14, ¶ 38.
5 American Academy of Actuaries, An Evaluation of the Individual Health Insurance Market and Implications of Potential Changes 1 (Jan. 2017), https://www.actuary.org/files/publications/Acad_eval_indiv_mkt_ 011817.pdf.
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qualified health plans may obtain standardized comparative information on such plans,” id. § 18031(d)(4)(C), and to “utilize a standardized format for presenting health benefits plan options,” id. § 18031(d)(4)(E), including “assign[ing] a rating to each qualified health plan offered through [an] Exchange,” id. § 18031(d)(4)(D).
Moreover, Exchanges are required to “establish [a] Navigator program,” id. § 18031(d)(4)(K), which by law awards grants to entities that “conduct public education activities to raise awareness of the availability of qualified health plans,” id. § 18031(i)(3)(A), “distribute fair and impartial information” about enrollment and the availability of tax credits and cost-sharing reductions, id. § 18031(i)(3)(B), and “facilitate enrollment in qualified health plans,” id. § 18031(i)(3)(C). The Secretary of Health and Human Services is tasked with “establish[ing] standards for navigators . . . , including provisions to ensure that any private or public entity that is selected as a navigator is qualified, and licensed if appropriate, to engage in the navigator activities.” Id. § 18031(i)(4)(A).
These reforms are designed to fulfill Congress’s goal of expanding coverage and ensuring that the coverage that individuals receive meets a baseline standard of comprehensiveness at a reasonable cost. Every provision—from the expansion of Medicaid to millions of Americans, to the establishment of Exchanges, to the creation of the Navigator system to assist individuals with obtaining coverage—was designed to fulfill that goal.
The Act has been wildly successful in ameliorating the immense public health problem caused by having so many Americans without adequate health insurance. As of 2016, approximately 12.7 million more people had purchased plans in the individual market through the state and federal Exchanges than before the Affordable Care Act was passed. Namrata Uberio et al., Health Insurance Coverage and the Affordable Care Act, 2010-2016 at 8, Dep’t of Health &
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Human Servs. (Mar. 3, 2016), https://aspe.hhs.gov/system/files/pdf/187551/ACA2010-2016.pdf. And approximately 14.5 million more people began receiving comprehensive benefits through Medicaid and the Children’s Health Insurance Program (CHIP). Id. Overall, there has been a net gain of 20 million Americans with health insurance coverage. Id. This gain spans many generational, ethnic, and racial groups, and has particularly benefited women, younger people, and Black and Hispanic individuals. Id. at 2.
C. The Administration’s Various Actions Undermine the Affordable Care Act. Despite the success of the Affordable Care Act, the President and his Administration have
taken various actions to undermine the Act and thwart its achievement of the important public health goal of “near-universal coverage.” 42 U.S.C. § 18091(2)(D). Those actions threaten to harm the millions of Americans who have benefited, and continue to benefit, from the Affordable Care Act’s benefits and protections. Just a few examples suffice to show how the Administration has repeatedly sought to undermine the Act.
First, the Centers for Medicare and Medicaid Services (CMS) promulgated a final Rule that undermines the Exchanges. See Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (Apr. 17, 2018). As discussed earlier, Congress created Exchanges to improve access to health insurance for individuals who cannot obtain it through an employer or through a government program like Medicaid. Indeed, the very purpose of the Exchanges was to make it easy for individuals who could not otherwise obtain insurance to purchase it on the individual market and thereby bring in a broad pool of consumers. Yet the CMS Rule makes it harder for individuals to purchase insurance on the Exchanges. For example, the Rule discontinues the requirement that Exchanges provide “standardized options” for health care plans, which help consumers understand the different levels of coverage and compare different plans within each level. Id. at 16,974-75. This change was promulgated despite the Department of Health and
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Human Services’ own prior findings that “[a]n excessive number of health plan options makes consumers less likely to make any plan selection, more likely to make a selection that does not match their health needs, and more likely to make a selection that leaves them less satisfied.” HHS Notice of Benefit and Payment Parameters for 2017, 80 Fed. Reg. 75,488, 75,542 (Dec. 2, 2015) (proposed rule).
The Rule also eliminates the requirement that Navigators have physical presences in the areas they serve. See 83 Fed. Reg. at 16,979-81. This change reduces the effectiveness of the Navigator program. The physical-presence requirement was previously imposed “so that face-toface assistance can be provided to applicants and enrollees.” Exchange and Insurance Market Standards for 2015 and Beyond, 79 Fed. Reg. 15,808, 15,832 (Mar. 21, 2014). Indeed, numerous studies have found that in-person assistance can make a big difference in improving rates of enrollment.6 Thus, as Plaintiffs allege, undoing these requirements would “dampen overall enrollment, especially among vulnerable populations, and thereby increase the rate of the uninsured.” Am. Compl. 43, ¶ 79.
Some of the Rule’s changes are more subtle, but will nonetheless reduce the effectiveness of the Exchanges. For instance, the Rule permits Exchanges to deny tax credits without notice to individuals who do not reconcile the amount of credit they receive in advance with the amount that should be allowed on their tax returns. 83 Fed. Reg. at 16,982-85. This change could reduce enrollment because “[t]he unexpected loss of this assistance would likely cause many if not most
6 See, e.g., Adrian Garcia Mosqueira & Benjamin D. Sommers, Better Outreach Critical to ACA Enrollment, Particularly for Latinos, The Commonwealth Fund (Jan. 14, 2016), http://www.commonwealthfund.org/publications/blog/2016/jan/better-outreach-critical-to-acaenrollment-particularly-for-latinos; Jennifer Tolbert et al., Connecting Consumers to Coverage: Lessons Learned from Assisters for Successful Outreach and Enrollment 2 (Sept. 19, 2014), http://files.kff.org/attachment/connecting-consumers-to-coverage-issue-brief.
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individuals to drop coverage entirely, especially since they will not know why they lost it or how to remedy their loss.” Am. Compl. 33, ¶ 56. Similarly, the Rule substantially scales back oversight of insurance brokers who assist individuals with signing up for insurance, despite evidence that these brokers were often “committing fraud, signing up individuals without their knowledge or consent, and using inaccurate calculators for [tax credit] eligibility.” Id. at 37, ¶ 65. This change “will increase the likelihood that consumers receive inaccurate information, thus decreasing overall enrollment and leading to a rise in the rate of the uninsured.” Id. at 38, ¶ 68.
This Administration has also taken other actions outside the Rule that undermine the law’s purpose of achieving near-universal coverage. First, the Administration has reduced the open enrollment period on Exchanges—the period during which individuals can enroll in coverage— from 3 months to 1.5 months. Market Stabilization, 82 Fed. Reg. 18,346, 18,353-55 (Apr. 18, 2017); see 45 C.F.R. § 155.410(e) (2017). As studies have recognized, reducing the enrollment period will reduce the number of enrollees.7
Second, the Administration has drastically reduced funding for advertisements to educate consumers about the Exchanges and their insurance options. For instance, during open enrollment that began in November of 2017, the Administration spent only $10 million, 90% less than the previous year, on advertising. Am. Compl. 78, ¶ 147. However, Congressional hearings have made clear that advertising is critical to successfully enrolling a broad base of consumers. For instance, at a recent hearing, one witness testified that a multi-year study conducted by CMS itself
7 See, e.g., Paul R. Shafer et al., Television Advertising and Health Insurance Marketplace Consumer Engagement in Kentucky: A Natural Experiment, 20 J. Med. Internet Res. *1, *7 (2018) (finding that “shortening the open enrollment period from 90 to 45 days . . . could have further negative consequences [for ACA enrollment],” particularly as the new period is dominated by the Thanksgiving week, which sees “large drops in [enrollment] activity”).
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“demonstrated the causal relationship between advertising and enrollment.”8 And another testified that “insurers increased premiums due to the Trump Administration’s decision to decrease spending on marketplace advertising and consumer assistance.”9 The research confirms this testimony.10
Third, the Administration has cut funding for Navigators to one-sixth the amount of funding previously provided. Am. Compl. 87, ¶ 165. These funding cuts resulted in many Navigator organizations declining their awards and withdrawing from the program. U.S. Gov’t Accountability Office, GAO-18-565, Health Insurance Exchanges: HHS Should Enhance Its Oversight of Open Enrollment Performance 30 (July 2018) (“GAO Study”). As numerous studies have pointed out, however, Navigator programs and similar application assistance initiatives are central to encouraging enrollment for low-income adults, and their reduction will have detrimental effects on overall enrollment and equity.11

8 Congressional Oversight Hearing on the Impact of the Administration’s Policies

Affecting the Affordable Care Act Before the H. Appropriations Subcomm. on Labor, Health, &

Human Servs., 116th Cong. (Feb. 6, 2019) (statement of Joshua Peck, co-founder, Get America

Covered),

https://docs.house.gov/meetings/AP/AP07/20190206/108858/HHRG-116-AP07-

Wstate-PeckJ-20190206.pdf; see id. (noting that when the Trump Administration cut outreach and

advertising during the final week of the 2016-17 open enrollment period, approximately 500,000

fewer people enrolled on the Exchanges).

9 Examining Threats to Workers with Preexisting Conditions Before the H. Educ. & Labor Comm., 116th Cong. (Feb. 6, 2019) (statement of Sabrina Corlette, Research Professor, Georgetown University’s Center on Health Insurance Reforms), https://edlabor.house.gov/imo/media/doc/Testimony_Corlette0206192.pdf.

10 See, e.g., Sarah E. Gollust et al., TV Advertising Volumes Were Associated with Insurance Marketplace Shopping and Enrollment in 2014, 37 Health Affairs 956 (2018) (finding that the number of televised ads for health insurance, particularly those sponsored by the federal government, is positively correlated with rates of marketplace enrollment); Shafer et al., supra, at *1 (finding that weekly state-sponsored television advertising during the open enrollment period substantially increased enrollment and information-seeking behaviors).

11 See Benjamin D. Sommers et al., The Impact of State Policies on ACA Applications and Enrollment Among Low-Income Adults in Arkansas, Kentucky, and Texas, 34 Health Affairs 1010,

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And fourth, the Administration has failed to set numeric enrollment targets for 2018 and 2019. In prior years, the Department of Health and Human Services “used numeric targets to monitor enrollment progress during the open enrollment period and focus its resources on those consumers that it believed had a high potential to enroll in exchange coverage.” GAO Study at 32. The Department failed to set such targets in 2018. Id. The Government Accountability Office found that “the lack of numeric enrollment targets for [the Department] to evaluate its performance with respect to the open enrollment period hamper[ed] the agency’s ability to make informed decisions about its resources.” Id. at 37.
In other words, in myriad ways, this Administration has tried to make it more difficult for individuals who need health insurance to access it through the Exchanges, even though Congress passed the Affordable Care Act to accomplish the opposite goal. When Congress passed the Affordable Care Act, it recognized that systemic problems in the health insurance markets meant that many Americans were denied critically important health insurance, and it passed the Affordable Care Act to put in place reforms to fix that. Among other things, Congress wanted to ensure that Americans who were not provided insurance by their employer or through a government program could easily go on an Exchange and purchase the best insurance option for themselves and their families. These Trump Administration actions undermine that goal.
1015, 1013 (2015) (finding that, for low-income adults, “[t]he strongest predictor of completing the application process was receiving help with enrollment from a navigator or application assister,” as it increased enrollment “from 84.9 percent to 93.1 percent”); Kate Heyer et al., RAND Corp., Assessing the Role of State and Local Public Health in Outreach and Enrollment for Expander Coverage: A Case Study on Boston and Massachusetts 1, 4, 8 (2016) (eBook) (demonstrating that the navigator program was important for increasing enrollment in hard-toreach and underserved communities).
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CONCLUSION

For the foregoing reasons, the House submits this brief in support of Plaintiffs.

Dated: June 7, 2019

Respectfully submitted, /s/ Brianne J. Gorod Brianne J. Gorod

Douglas N. Letter General Counsel Megan Barbero Associate General Counsel
OFFICE OF GENERAL COUNSEL U.S. HOUSE OF REPRESENTATIVES 219 Cannon House Office Building Washington, D.C. 20515 Tel: (202) 225-9700 Douglas.Letter@mail.house.gov

Elizabeth B. Wydra Brianne J. Gorod Ashwin P. Phatak CONSTITUTIONAL ACCOUNTABILITY
CENTER 1200 18th Street N.W., Suite 501 Washington, D.C. 20036-2513 Tel: (202) 296-6889 elizabeth@theusconstitution.org brianne@theusconstitution.org ashwin@theusconstitution.org

Counsel for Amicus U.S. House of Representatives*

* Attorneys for the Office of General Counsel for the U.S. House of Representatives, including any counsel specially retained by the Office of General Counsel, are “entitled, for the purpose of performing the counsel’s functions, to enter an appearance in any proceeding before any court of the United States or of any State or political subdivision thereof without compliance with any requirements for admission to practice before such court.” 2 U.S.C. § 5571(a).
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CERTIFICATE OF SERVICE I hereby certify that on June 7, 2019, the foregoing document was filed with the Clerk of the Court, using the CM/ECF system, causing it to be served on all counsel of record.

Dated: June 7, 2019

/s/ Brianne J. Gorod Brianne J. Gorod

 
 Case 1:18-cv-02364-DKC Document 102 Filed 04/10/20 Page 1 of 67

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

: CITY OF COLUMBUS, et al.
:

v.

: Civil Action No. DKC 18-2364

: DONALD J. TRUMP, in his official capacity as President of the : United States of America, et al.
:

MEMORANDUM OPINION

Presently pending and ready for resolution in this action

for declaratory judgment and injunctive relief is the motion to

dismiss the amended complaint filed by Defendants Donald J.

Trump, Alex M. Azar, II, the United States Department of Health

and Human Services, Seema Verma, and the Centers for Medicare

and Medicaid Services. (ECF No. 52). The issues have been

fully briefed, and the court now rules, no hearing being deemed

necessary. Local Rule 105.6. For the following reasons, the

motion to dismiss will be denied in part and granted in part.

I. Factual Background1

Plaintiffs the City of Columbus, Ohio, the Mayor and City

Council of Baltimore, Maryland, the City of Cincinnati, Ohio,

the City of Chicago, Illinois, and the City of Philadelphia,

1 Unless otherwise noted, the facts outlined here are set forth in the amended complaint and construed in the light most favorable to Plaintiffs.

Case 1:18-cv-02364-DKC Document 102 Filed 04/10/20 Page 2 of 67
Pennsylvania (collectively, the “City Plaintiffs”) and Stephen Vondra and Bonnie Morgan (collectively, the “Individual Plaintiffs”) filed suit against Defendants Donald J. Trump, in his official capacity as President of the United States of America, the United States Department of Health and Human Services (“HHS”), Alex M. Azar, II, in his official capacity as Secretary of HHS, the Centers for Medicare and Medicaid Services (“CMS”), and Seema Verma, in her official capacity as Administrator of CMS, (collectively, “Defendants”). Plaintiffs assert two claims: violation of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706 (Count I) and violation of the Take Care Clause, U.S. Const. art. II, § 3 (Count II).
Central to Plaintiffs’ amended complaint is the Patient Protection and Affordable Care Act (the “ACA,” the “Act,” or the “Affordable Care Act”). Plaintiffs allege that after “fail[ing] to persuade Congress to repeal the Affordable Care Act, President Trump and his Administration are waging a relentless campaign to sabotage and, ultimately, to nullify the law.”2 (ECF No. 44, ¶ 1). Plaintiffs allege that Defendants’ strategy is “[to shift deceptively] the blame from their own actions to the Act itself[]” and that Defendants’ objective is “to pressure Congress to repeal the Act or, if that fails, to achieve de
2 All citations to court documents in this opinion refer to CM/ECF pagination.
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facto repeal through executive action alone.”

(Id.).

Plaintiffs allege that Defendants’ actions force the City

Plaintiffs “to spend more on uncompensated care for their

residents[]” and the Individual Plaintiffs “to pay more for the

quality health insurance coverage they need[.]” (Id., ¶ 4).

A. The ACA

In 2010, Congress passed and President Obama signed into

law the Affordable Care Act “to increase the number of Americans

covered by health insurance and decrease the cost of health

care.” Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519,

538 (2012) (“NFIB”). The ACA “adopts a series of interlocking

reforms designed to expand coverage in the individual health

insurance market.” King v. Burwell, 135 S.Ct. 2480, 2485

(2015).

“Individual health insurance is insurance that

individuals purchase themselves, in contrast to, for example,

joining employer-sponsored group health plans.” (ECF No. 44, ¶

32). “Prior to the enactment of the ACA, individual health

insurance markets were dysfunctional.” (Id.). The ACA “aims to

achieve systemic improvements in the individual health insurance

market by means of certain key reforms[.]” (Id., ¶ 33).

Plaintiffs’ amended complaint highlights four such reforms.

(Id., ¶¶ 33-34).

First, “Congress addressed the problem of those who cannot

obtain insurance coverage because of preexisting conditions or

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other health issues . . . through the Act’s ‘guaranteed-issue’ and ‘community rating’ provisions.” NFIB, 567 U.S. at 547-48. “These provisions together prohibit insurance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals.” Id. at 548 (citing 42 U.S.C. §§ 300gg, 300gg-1, 300gg-3, 300gg4).
Second, recognizing that “[t]he guaranteed-issue and community-rating reforms do not . . . address the issue of healthy individuals who choose not to purchase insurance to cover potential health care needs[,]” id., Congress “required individuals to maintain health insurance coverage [(the individual mandate)] or make a shared responsibility payment to the Internal Revenue Service[,]” (ECF No. 44, ¶ 34).
Third, the ACA requires ACA-compliant plans to cover essential health benefits and limits “so-called ‘cost-sharing’ – for example, deductibles and copayments – for essential health benefits coverage[.]” (ECF No. 44, ¶ 33b). The ACA also “prohibits plans from imposing annual or lifetime limits” on essential health benefits coverage. (Id.).
Fourth, the ACA “seeks to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line [(“FPL”)].” (ECF No. 44, ¶ 33c (quoting King, 135
4

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S.Ct. at 2487)). Qualified individuals receive income-related, premium-based tax credits (advance premium tax credits or “APTCs”).3 (Id.). The ACA “also requires health insurance issuers to reduce certain individuals’ cost-sharing expenditures and directs HHS to reimburse issuers for such cost-sharing reductions (‘CSRs’).” (Id.).
“To facilitate individuals’ ability to learn about and enroll in the health insurance options that are available to them, the ACA ‘requires the creation of an “Exchange” in each State where people can shop for insurance, usually online.’” (ECF No. 44, ¶ 35 (quoting King, 135 S.Ct. at 2487)). “An exchange may be established by the state in which it operates or, in states that elect not to establish exchanges, by the federal government.”4 (Id., ¶ 38).
The exchanges serve as marketplaces, allowing people not eligible for Medicare or Medicaid to compare and purchase ACAcompliant insurance plans, known as “qualified health plans” or “QHPs” under the Act. (ECF No. 44, ¶ 35). Individuals may
3 “Those with income below 100 percent of FPL generally are not eligible for APTC payments because the ACA contemplated that they would instead be eligible for Medicaid.” (ECF No. 92, at 30).
4 The exchange in Illinois is a hybrid exchange (an exchange that “assume[s] some, but not all, exchange functions[]”), the exchange in Maryland is a state-based exchange (“SBE”), and the exchanges in Ohio and Pennsylvania are federally-facilitated exchanges (“FFEs”). (ECF No. 44, ¶ 38).
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enroll during an annual open enrollment period or, after a qualifying life event, during a special enrollment period. The exchanges “help consumers make smart health insurance choices by running call centers and providing in-person assistance.” (Id., ¶ 37). Pertinently, “the ACA requires that exchanges award grants to healthcare ‘Navigators’ to ‘carry out . . . duties” that are specified by statute and in HHS implementing regulations[.]” (Id. (citations omitted)).
“The ACA requires that exchanges offer only quality health insurance[.]” (ECF No. 44, ¶ 39). Such coverage “improve[s] access to care and overall health[]” and “reduce[s] financial burdens for both individuals and institutions that cover the costs of uncompensated care.” (Id.). Plaintiffs allege that increasing enrollment in quality health insurance coverage is both the ACA’s immediate goal and the key to the ACA’s long-term success. Enrollment “must be high enough to reduce random fluctuations in claims from year to year[.]” (Id.). Enough healthy individuals must enroll to spread the costs of lesshealthy individuals. (Id.). To promote increased enrollment, health care costs must be limited. (Id., ¶ 40). Plaintiffs allege that before Defendants’ actions, “the ACA’s reforms successfully met Congress’s goal of enabling more individuals – specifically, 20 million more individuals – to enroll in health insurance coverage.” (Id., ¶¶ 41-43).
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B. Defendants’ Challenged Actions Plaintiffs dedicate 12 pages of the amended complaint to cataloging the many statements made by the President and members of his Administration that they allege express contempt for the Act. (ECF No. 44, ¶¶ 44-48). According to Plaintiffs, these statements evince “the Administration’s intent to repeal the ACA, with or without Congress.” (Id., at 22). Plaintiffs also challenge Defendants’ actions. “At issue here are a final rule and a long list. . . of other executive actions, all undertaken by the Trump Administration to undermine the ACA.” (ECF No. 44, ¶ 9). “The final rule is [CMS’s] Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16,930 (April 17, 2018), referenced here as the ‘2019 Rule’ [because] it governs many aspects of ACA insurance markets starting in the 2019 plan year.” (Id., ¶ 10). The challenged executive actions include two executive orders, Executive Order No. 13,765, titled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal,” 82 Fed. Reg. 8,351 (Jan. 20, 2017) and Executive Order No. 13,813, titled “Promoting Healthcare Choice and Competition Across the United States,” 82 Fed. Reg. 48,385 (Oct. 12, 2017).
1. The 2019 Rule Plaintiffs allege that the 2019 Rule implements changes “that increase the cost of health coverage and impose other
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barriers to enrollment.” (ECF No. 44, ¶ 10). They allege that the 2019 Rule undermines the Act’s safeguards and requirements and that “provisions of the 2019 Rule roll back protections that the Act guarantees, make it more difficult to enroll in ACAcompliant plans, and drive up the cost of ACA-compliant plans.” (Id., ¶ 50). They argue that nine particular provisions of the 2019 Rule violate the APA because the “changes lack adequate justification and, in some instances, violate the Affordable Care Act’s text[.]” (Id. at ¶ 10).
Plaintiffs allege that the first three challenged provisions of the 2019 Rule will eliminate protections guaranteed by the ACA. The first challenged provision of the 2019 Rule relates to APTCs. (ECF No. 44, ¶¶ 52-56). The ACA “required HHS to promulgate regulations further defining APTC eligibility.” (Id., ¶ 52). HHS regulations include a “failure to reconcile provision” which directs “exchanges to deny APTCs to an individual if the [IRS] notifies the exchange that the individual or a member of her household did not reconcile the amount of advance premium tax credits she received with the amount of the actual premium tax credit she should have been allowed on her prior year’s tax return.” (Id. (emphasis added)). In 2016, the failure to reconcile provision was amended “to specify that an exchange may not deny APTC under this provision ‘unless direct notification is first sent to the tax filer . . .
8

Case 1:18-cv-02364-DKC Document 102 Filed 04/10/20 Page 9 of 67

that his or her eligibility will be discontinued as a result of

the tax filer’s failure to comply with the requirement.’” (Id.

(quoting 45 C.F.R. § 155.305(f)(4)(ii)(2016)(effective Jan. 17,

2017 to June 17, 2018))). The 2019 Rule removes the advance

direct notification requirement.5 Plaintiffs allege that this

change “will cause eligible individuals to lose the subsidies

that the ACA guarantees[]” and that “[t]he unexpected loss of

this assistance would likely cause many if not most individuals

to drop coverage entirely[.]” (Id., ¶ 56).

The second challenged provision of the 2019 Rule relates to

the compliance review of insurance plans to be offered on

federal exchanges. (ECF No. 44, ¶¶ 57-63). The ACA requires

the Secretary of HHS to establish, by regulation, “‘criteria for

the certification of health plans as [QHPs],’ including criteria

that ‘ensure a sufficient choice of providers,’ – i.e., criteria

that ensure network adequacy.” (Id., ¶ 57 (quoting 42 U.S.C.

§ 18031(c)) (internal citations omitted)). The criteria require

an exchange to “implement procedures for the certification,

recertification, and decertification . . . of health plans as

[QHPs].”

(Id. (quoting 42 U.S.C. § 18031(d)(4)(A))).

Previously, “CMS, acting as the exchange in states with [FFEs] .

. . review[ed] network adequacy and accreditation status plans

5 The 2019 Rule “indicates that FFEs will continue to provide direct notification[.]” (ECF No. 44, ¶ 55).
9

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that insurers proposed to offer[.]” (Id., ¶ 58). The 2019 Rule allows CMS to “‘rely on the [s]tates’ reviews’ of network adequacy and other critical requirements in certain [FFEs].”6 (Id., ¶ 59 (quoting 83 Fed. Reg. at 17,024-26)). Plaintiffs allege that “[o]utsourcing federal plan review to states will permit insurers to market plans with overly restrictive networks of providers – networks that could thereby limit patient access to care.” (Id., ¶ 63). As a result, the rate of the underinsured will increase because “[m]ore consumers will end up purchasing inadequate plans[.]” (Id.).
The third challenged provision of the 2019 Rule relates to federal oversight of insurance brokers participating in direct enrollment. (ECF No. 44, ¶¶ 64-68). “Direct enrollment is a process under which a consumer enrolls in an ACA-compliant health insurance plan through a third-party website instead of through the governmental platform[.]” (Id., ¶ 65). Previous rules “provided a strong oversight structure” and required third-party audits by HHS-approved auditors because “direct enrollment entities were committing fraud, signing up individuals without their knowledge or consent, and using inaccurate calculators for APTC eligibility[.]” (Id.). The 2019 Rule eliminates this protection and allows direct enrollment
6 This represents an extension of a “policy first adopted in the 2018 Market Stabilization Rule, 82 Fed. Reg. 18,346, 1837172 (April 18, 2017)[.]” (ECF No. 44, ¶ 59).
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entities to select their own third-party auditors without HHS’s initial review and approval. (Id., ¶ 66). Plaintiffs allege that the reduced oversight “will increase the likelihood that consumers receive inaccurate information, thus decreasing overall enrollment and leading to a rise in the rate of the uninsured [and underinsured].” (Id., ¶ 68).
Plaintiffs allege that the next four challenged provisions of the 2019 Rule will deter Americans from enrolling in QHPs. The fourth challenged provision of the 2019 Rule relates to standardized options. (ECF No. 44, ¶¶ 70-74). Previous “rules supported ‘standardized options,’ which are qualified health plans at different levels of coverage with a cost-sharing structured specified by HHS[.]” (Id., ¶ 70). HHS previously supported standardized options because “an excessive number of health plan options makes consumers less likely to make any plan selection, more likely to make a selection that does not match their health needs, and more likely to make a selection that leaves them less satisfied.” (Id., ¶ 71 (quoting CMS, Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2017, 81 Fed. Reg. 12,204, 12,205, 12,289-293 (Mar. 8, 2016))). The 2019 Rule discontinues support for standardized options. (Id., ¶ 72). Plaintiffs allege that eliminating support for standardized options “makes it more difficult for consumers to select appropriate health coverage,
11

Case 1:18-cv-02364-DKC Document 102 Filed 04/10/20 Page 12 of 67

and also increases the risk that they will go without coverage

entirely.” (Id., ¶ 73). They also allege “eliminating support

for standardized options will limit the degree to which health

plans will compete on price; instead, some plans will choose to

compete on benefit design in a gambit to discourage high-risk

enrollees.” (Id., ¶ 74). “Without standardized options, it will

be harder for individuals to select coverage, prices will rise,

and the rate of the uninsured and underinsured will increase.”

(Id.).

The fifth challenged provision of the 2019 Rule relates to

the Navigator program. (ECF No. 44, ¶¶ 75-79). Previous rules

required each exchange “to have two Navigators, one of those

Navigators was required to be a community- and consumer-focused

nonprofit, and Navigators were required to have physical

presences in the areas they served.” (Id., ¶ 75). The 2019

Rule eliminates these requirements. (Id.). Plaintiffs allege

that the elimination of these requirements “will decrease

individuals’ and families’ in-person access to complete,

impartial information[]” and “dampen overall enrollment,

especially among vulnerable populations[.]”

(Id., ¶ 79).

Plaintiffs emphasize the importance of in-person assistance for

minority populations and young people and the statistic that

“[p]eople who receive in-person assistance are nearly 40 percent

more likely to enroll in coverage than people who are forced to

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go it alone.” (Id.). They conclude that the elimination of these Navigator requirements will “increase the rate of the uninsured [and underinsured].” (Id.).
The sixth challenged provision of the 2019 Rule relates to small business exchanges. (ECF No. 44, ¶¶ 80-82). Under the ACA, exchanges must provide for the establishment of a Small Business Health Options Program (a “SHOP Exchange”) to assist certain “small employers in facilitating the enrollment of their employees in [QHPs] offered in the small group market.” (Id., ¶ 80 (quoting 42 U.S.C. § 18031(b)(1)(B))). The ACA also “requires SHOP exchanges to ‘make available [QHPs] to . . . qualified employers,’ to protect employers’ and employees’ choice among certain [QHPs], and to protect employees’ ability to enroll even after their employer no longer qualifies as a small employer under the Act.” (Id. (internal citations omitted)). “Under prior rules, CMS interpreted the ACA as ‘requiring that all SHOPs provide for employer eligibility, employee eligibility, and certain enrollment functions, including premium aggregation functions.” (Id., ¶ 81 (citing 83 Fed. Reg. at 16,996)). The 2019 Rule “purport[s] to reinterpret the ACA and remove these requirements.” (Id.). Plaintiffs allege that “[b]y eliminating the requirement that SHOP exchanges allow employers to determine employee eligibility, aggregate premiums, and enroll employees online, the 2019 Rule
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makes it more difficult for small businesses to offer workers and their dependents affordable coverage, and thereby will increase the size of the uninsured population.” (Id., ¶ 82). Additionally, Plaintiffs allege that “[t]hese changes will . . . push small businesses to use a broker or buy directly from an insurance company, limiting their ability to make plan comparisons and shop by price for appropriate coverage, potentially raising their premiums.” (Id.).
The seventh challenged provision of the 2019 Rule relates to income verification requirements imposed on individuals seeking APTCs. (ECF No. 44, ¶¶ 83-86). The 2019 Rule imposes “income verification requirements ‘where electronic data sources reflect income under 100 percent FPL and a consumer attests to income between 100 percent FPL and 400 percent FPL.’” (Id., ¶ 83 (citing 83 Fed. Reg. at 16,985)). The income verification requirement originated “[o]ut of purported concern that individuals inflate their income above the FPL to gain APTCs, resulting in the payment of APTCs to those not entitled to receive them[.]” (Id.). Plaintiffs allege that “making it harder for consumers to obtain insurance tax credits . . . will likely mean that more consumers will choose to go without coverage entirely – i.e., that the rate of the uninsured will increase.” (Id., ¶ 85). Significantly, “paperwork burdens have historically deterred enrollment of people with relatively low
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need for health care; those with high health care needs will work harder to get coverage.” (Id.). Thus, Plaintiffs also allege that the income verification requirement “will worsen the risk pool and raise premiums, causing coverage to become less affordable.” (Id.).
Plaintiffs allege that the final two challenged provisions of the 2019 Rule will drive up costs. The eighth challenged provision curtails review of insurance rate increases. (ECF No. 44, ¶¶ 88-93). “Under the ACA, ‘[t]he Secretary, in conjunction with States, shall establish a process for the annual review . . . of unreasonable increases in premiums for health insurance coverage.’” (Id., ¶ 88 (quoting 42 U.S.C. § 300gg-94(a)(1))). CMS “promulgated regulations that require insurers to justify annual rate increases above a given threshold.” (Id.). The 2019 Rule changes this scheme by (1) exempting student health plans from rate review and (2) raising the threshold for rate review from rate increases of 10% to rate increases of 15%. (Id., ¶ 89). Plaintiffs allege that “the 2019 Rule’s . . . changes to rate review will make it easier for insurers to increase rates without adequate justification; the purpose of rate review is for insurance commissioners and the public to examine the proposed reasons for health insurance premium increases in the individual and small-group market and adjust them as appropriate to improve affordability for consumers.”
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(Id., ¶ 93). Plaintiffs point to statistical data from 2011 and 2015 to demonstrate the effectiveness of rate review.7 They allege that “if prices are permitted to increase without the significant check provided by rate review, individuals will increasingly decide to go without appropriate coverage or any coverage at all – driving up the rate of uninsured and underinsured individuals.” (Id.).
The ninth, and final, challenged provision of the 2019 Rule relates to rebates for poor insurer performance. (ECF No. 44, ¶¶ 94-98). This provision involves the “medical loss ratio” or “MLR.” The MLR is “the percentage of each premium that [insurers] spend on paying claims and improving their services[.]” (Id., ¶ 94). Under the ACA, insurers must pay rebates if the MLR “drops below 85 percent (for large group insurance plans) or 80 percent (for small group and individual insurance plans).” (Id., (citing 42 U.S.C. § 300gg18(b)(1)(A))). “These minimum MLR standards are intended to help ensure that individuals covered under private health insurance plans (enrollees) receive adequate value for their premiums and to create incentives for insurers to become more
7 “In 2011, one in five proposed premium increases was reduced through rate review, with rates that went into effect approximately one-fifth lower than those initially requested by the insurer.” (ECF No. 44, ¶ 93). “In 2015, rate review lowered premiums in the individual and small group markets by $1.5 billion.” (Id.).
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efficient in their operations.” (Id.). The 2019 Rule “alters the method by which rebates are awarded[]” by “allow[ing] insurers to claim a flat 0.8 percent of premium credit for quality improvement activities (“QIA”) – i.e., ‘activities that promote health care quality,’ when calculating medical loss ratio, rather than a percent based on the amount actually spent on such activities. (Id., ¶ 95 (internal citations omitted)). “In other words, the 2019 Rule allows insurers to take credit for improving their services whether or not they actually did so.” (Id.). Plaintiffs allege that since the beginning of ACA’s medical loss ratio policy in 2012, enrollees “have received nearly $4 billion in rebates.” (Id., ¶ 98). In 2018, insurers paid “nearly $707 million in rebates[.]” (Id.). Plaintiffs allege that “[b]y allowing insurers [increasingly to avoid] paying these rebates, the 2019 Rule will effectively cause consumers to pay more for worse insurance, leading to an increase in the number of consumers that lack appropriate coverage.” (Id.).
2. Defendants’ Executive Actions Plaintiffs allege that, in addition to the 2019 Rule, Defendants “have taken many other actions with the intent and effect of sabotaging the Act generally and its private insurance reforms and exchanges in particular.” (ECF No. 44, ¶ 99). They allege that these actions “establish Defendants’ pattern and
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practice of taking executive action to undermine the Act[.]” (Id.) They divide the actions into five categories: (1) directing agencies to sabotage the Act; (2) attempting to destabilize the exchanges; (3) working to decrease enrollment; (4) arbitrarily driving up premiums; and (5) refusing to defend the Act.
Plaintiffs first outline Defendants’ actions directing agencies to sabotage the ACA. (ECF No. 44, ¶¶ 100-103). They highlight Executive Order No. 13,765 (“EO 13,765”). EO 13,765 announced the policy of the Trump Administration “to seek the prompt repeal of the [ACA]” and directed Administration officials to “take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act.” (ECF No. 44, ¶ 100 (quoting 82 Fed. Reg. 8,351 (Jan. 20, 2017)). EO 13,765 signaled that the Trump Administration might not enforce the individual mandate. One estimate, from Joshua Peck, the Chief Marketing Officer for the federal government’s ACA exchange until 2016 and an amicus curiae presently, forecasted that such signaling “resulted in 130,000 fewer individuals enrolling in health insurance during the open enrollment period for 2017 plan year insurance[.]” (Id., ¶ 102). Indeed, EO 17,365 “resulted in reduced enforcement of the individual mandate[.]” (Id.).
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Plaintiffs next outline Defendants’ actions to destabilize the exchanges. Plaintiffs allege that Defendants’ strategy was to sow uncertainty in insurance markets. Defendants’ challenged actions include: (1) threatening to discontinue, and ultimately discontinuing, reimbursing insurers for cost-sharing reductions (ECF No. 44, ¶¶ 105-108); (2) issuing Executive Order No. 13,813 (“EO 13,813”) and thereby promoting non-ACA compliant plans to try to weaken ACA exchanges (id., ¶¶ 109-115); (3) undermining the individual mandate (id., ¶¶ 116-122); (4) delaying or denying state waiver requests under Section 1332 of the Act that would further the Act’s goals (id., ¶¶ 123-126);8 (5) enabling and encouraging states to seek Section 1332 waivers that would undercut the Act’s goals (id., ¶¶ 127-128); and (6) attempting to weaken public confidence in ACA exchanges (id., ¶¶ 129-132).
Plaintiffs also outline Defendants’ actions to decrease enrollment. These actions include: (1) halving the open enrollment period and increasing planned downtime for the federal health insurance exchange website (ECF No. 44, ¶¶ 135-

8 “Section 1332 of the ACA, 42 U.S.C. § 18052, permits

states to apply for waivers of some of the law’s requirements in

order to promote innovative policies that satisfy certain

statutorily-prescribed guardrails[.]” (ECF No. 44, ¶ 123).

“Crucially, for example, states may only seek waivers that would

‘provide coverage that is at least as comprehensive as’ ACA-

compliant coverage.”

(Id. (citing 42 U.S.C. § 18052

(b)(1)(A))). “In keeping with these guardrails, only certain

ACA provisions are subject to waiver under Section 1332.”

(Id.).

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142); (2) drastically reducing funding twice (in January 2017 and in August 2017) for advertising and refusing to publicize open enrollment (id., ¶¶ 143-154); (3) drastically cutting funding twice (in 2017 and 2018) for Navigators working in federally-facilitated exchanges and encouraging them to undermine the Act by “requiring them to compete for funding according to how enthusiastically they plan to advertise the availability of non-ACA compliant coverage” (id., ¶¶ 155-167); (4) failing to set numeric enrollment targets for 2018 and 2019 despite explicit findings from the Government Accountability Office (“GAO”) that “failing to set enrollment targets . . . hamper[s] HHS’s ability to measure its performance and make critical decisions about how to use resources to facilitate enrollment[]” (id., ¶¶ 168-170); and (5) refusing to participate in enrollment events and other outreach (id., ¶¶ 171-172). Plaintiffs allege “two of the decisions at issue here – shortening open enrollment and reducing outreach – may result in as much as a [nine] percent increase in premiums.” (Id., ¶ 134).
Finally, Plaintiffs outline Defendants’ efforts to drive up premiums and Defendants’ refusal to defend the ACA. (ECF No. 44, ¶¶ 173-180). Plaintiffs’ allegations regarding Defendants’ efforts to drive up premiums focus on a proposed rule, see CMS, Proposed Rule, Notice of Benefit and Payment Parameters for
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2020, -- Fed. Reg. 00 (Jan. 17, 2019) (the “2020 Proposed

Rule”).

(ECF No. 44, ¶ 173).

Plaintiffs allege that

Defendants’ refusal to defend the ACA in the ongoing litigation

over the individual mandate “is a dramatic example of how

Defendants are eager to invalidate, rather than to implement,

core ACA provisions.” (Id., ¶ 179).

Plaintiffs’ allegations regarding the 2019 Rule support

their APA claim in Count I. Plaintiffs’ allegations regarding

both the 2019 Rule and Defendants’ other executive actions

support their Take Care Clause claim in Count II.

II. Procedural Background

On January 25, 2019, Plaintiffs filed the amended

complaint. (ECF No. 44). On March 8, 2019, Defendants filed

the presently pending motion to dismiss. (ECF No. 52).

Plaintiffs responded, (ECF No. 61), and Defendants replied (ECF

No. 92). Defendants move to dismiss Plaintiffs’ complaint for

lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1)

and for failure to state a claim under Fed.R.Civ.P. 12(b)(6).

Also pending are five motions for leave to file memoranda

as amici curiae in support of Plaintiffs.9 (ECF Nos. 65; 66; 67;

9 The potential amici include: (1) the United States House of Representatives (ECF No. 65); (2) the City of Berkeley, California, Cook County, Illinois, the City of Dayton, Ohio, the City of Los Angeles, California, the City of Minneapolis, Minnesota, Montgomery County, Maryland, the City of Oakland, California, the City of Saint Paul, Minnesota, the City and
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71; 76). In addition, the District of Columbia, along with the States of California, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington, jointly filed an amicus brief in support of Plaintiffs pursuant to United States District Court for the District of Maryland Standing Order 2018-07. (ECF No. 72).
Under Standing Order 2018-07, a state may file an amicus brief without the consent of the parties or leave of court and any other amicus curiae may file a brief only by submitting a motion to obtain leave of the court. There is no Federal Rule of Civil Procedure that applies to motions for leave to appear as amicus curiae in a federal district court. District courts therefore have discretion to deny or grant such leave and often look for guidance to Rule 29 of the Federal Rules of Appellate Procedure, which applies to amicus briefs at the federal appeals level. See, e.g., Wheelabrator Balt., L.P. v. Mayor of Balt., -- F.Supp.3d ---, No. 19-1264-GLR, 2020 WL 1491409, at *1 n.1
County of San Francisco, California, the County of Santa Clara, California, the City of Seattle, Washington, Shelby County, Tennessee, and Travis County, Texas (ECF No. 66); (3) Families USA, Community Catalyst, the National Health Law Program, and Service Employees International Union (ECF No. 67); (4) Henry J. Aaron (ECF No. 71); and (5) Joshua Peck (ECF No. 76). Defendants and Plaintiffs consented to the filing of each proposed amicus brief.
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(D.Md. Mar. 27, 2020); Bryant v. Better Bus. Bureau of Greater Md., Inc., 923 F.Supp. 720, 728 (D.Md. 1996); Wash. Gas Light Co. v. Prince George’s Cty. Council, No. 08-0967-DKC, 2012 WL 832756, at *3 (D.Md. Mar. 9, 2012). Rule 29 indicates that amici should state “the reason why an amicus brief is desirable and why the matters asserted are relevant to the disposition of the case.” Fed.R.App.P. 29(a)(3). As noted by Judge Davis in Bryant, “[t]he aid of amici curiae has been allowed at the trial level where they provide helpful analysis of the law, they have a special interest in the subject matter of the suit, or existing counsel is in need of assistance.” Bryant, 923 F.Supp. at 728 (citations omitted). Here, the motions will be granted. Each demonstrated a special interest in the outcome of the suit and provided helpful information to the court. III. Justiciability
Defendants contend that the complaint should be dismissed for lack of subject matter jurisdiction because Plaintiffs lack standing and because their claims are not ripe. (ECF No. 52-1, at 23–38; ECF No. 92, at 9–17). Plaintiffs disagree. (ECF No. 61, at 23–45).
“A challenge to subject matter jurisdiction under [Fed.R.Civ.P. 12(b)(1)] may proceed ‘in one of two ways’: either a facial challenge, asserting that the allegations pleaded in the complaint are insufficient to establish subject matter
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jurisdiction, or a factual challenge, asserting “‘that the jurisdictional allegations of the complaint [are] not true.’” Mayor of Balt. v. Trump, 416 F.Supp.3d 452, 479 (D.Md. 2019) (quoting Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009). In a facial challenge, “the facts alleged in the complaint are taken as true, and the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction.” Kerns, 585 F.3d at 192. In a factual challenge, “the district court is entitled to decide disputed issues of fact” and may “‘go beyond the allegations of the complaint and in an evidentiary hearing determine if there are facts to support the jurisdictional allegations.’” Id. (quoting Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). “The burden of establishing subject matter jurisdiction rests with the plaintiff.” Demetres v. East West Constr., Inc., 776 F.3d 271, 272 (4th Cir. 2015).
A. Standing “Article III standing is ‘part and parcel of the constitutional mandate that the judicial power of the United States extend only to cases and controversies.’” Baehr v. Creig Northrop Team, P.C., 953 F.3d 244, 252 (4th Cir. 2020) (quoting Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013). “To establish Article III standing, an injury must be ‘concrete, particularized, and actual or imminent; fairly
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traceable to the challenged action; and redressable by a

favorable ruling.’” Clapper v. Amnesty Int’l USA, 568 U.S. 398,

409 (2013).

These three elements are “the irreducible

constitutional minimum of standing[.]” Lujan v. Defs. of

Wildlife, 504 U.S. 555, 560 (1992).

Defendants appear to mount a facial challenge to standing,

although they rely on declarations of Jeff Wu, Deputy Director

for Policy for the Center for Consumer Information and Insurance

Oversight, for some of their arguments, and use language

indicative of a factual challenge at times. Plaintiffs’

response to the challenge reflects their understanding that the

challenge is facial. The issue will be resolved based on the

allegations in the amended complaint.

1. Injury in Fact

“To establish injury in fact, a plaintiff must show that he

or she suffered ‘an invasion of a legally protected interest’

that is ‘concrete and particularized’ and ‘actual or imminent,

not conjectural or hypothetical.’” Spokeo, Inc. v. Robins, 136

S.Ct. 1540, 1548 (2016) (quoting Lujan, 504 U.S. at 560).

Defendants contend that the Individual Plaintiffs lack

standing because “even assuming that rising premiums alone could

constitute an injury in fact . . . the Individual Plaintiffs’

prediction about continued rising individual market insurance

premiums has been proven to be incorrect.” (ECF No. 52-1, at

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25). Defendants elaborate that “the 2019 premiums for such

insurance in [the county where the Individual Plaintiffs live]

has seen dramatic decreases[]” and that “a new insurer,

HealthKeepers, Inc. (affiliated with Anthem, Inc.), entered the

. . . market in 2019.” (Id.).

Plaintiffs respond that the Individual Plaintiffs “have

standing because Defendants’ actions have caused issuers . . .

to charge them . . . higher premiums.” (ECF No. 61, at 33).

They elaborate:

Defendants’ actions led to significant

premium increases nationwide from 2017 to

2019. Charlottesville, Virginia, where the

Individual Plaintiffs reside, is no

exception. Overall, premiums tripled in

Charlottesville in 2018, becoming the

highest in the nation.

In 2017, the

Individual Plaintiffs paid a monthly premium

of $1,270 for an Optima silver plan; in

2018, they paid $3,300 a month for their

Optima bronze plan, 261 percent higher than

their 2017 premium, and with a significantly

higher deductible of $14,400. Now, in 2019,

they pay $1,899 a month for their Anthem

bronze plan – still 50 percent higher than

what they paid for the Optima silver plan in

2017 – with a deductible of $13,000. Anthem

also raised its statewide rates from 2018 to

2019 by 3.2 percent. Indeed, the price of

the plan purchased by the Individual

Plaintiffs itself rose by 1.6 percent from

2018 to 2019.

(Id., at 34–35 (citations omitted and emphasis in original)).

Plaintiffs’ allegations, reduced to the minimum, recite

that they were insured by Optima in 2017 and 2018 and switched

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to Anthem in 2019. While their actual premium with Anthem in 2019 is lower than their actual premium with Optima in 2018, the Anthem premium in 2019 was higher than the Anthem premium in 2018 was for the same plan.
Plaintiffs allege that their increased premiums constitute concrete injury and cite several cases in support of their contention. (Id., at 33 (citing Stewart v. Azar, 313 F.Supp.3d 237, 252 (D.D.C. 2018) (“Plaintiffs would be required to pay increased premiums and thus would suffer a concrete injury[.]”); AARP v. EEOC, 226 F.Supp.3d 7, 18 (D.D.C. 2016) (“An increase in premiums would certainly constitute an injury.”).10 Defendants do not address these cases, instead noting that the Individual Plaintiffs “acknowledge that their 2019 premiums are actually lower than their 2018 premiums,” (ECF No. 92, at 14), and focusing on traceability, (id., at 10-15). The increase in premiums constitutes economic harm and is therefore “a classic and paradigmatic form of injury in fact[.]” Air Evac EMS, Inc. v. Cheatham, 910 F.3d 751, 760 (4th Cir. 2018). The Individual Plaintiffs satisfy the first element of constitutional standing.
10 Plaintiffs also emphasize that “Defendants themselves recently endorsed a similar theory of standing in Texas v. United States,” explaining that “in Texas, Defendants say that higher premiums constitute ‘concrete financial and practical injuries.’” (ECF No. 61, at 33–34 (quoting Brief for the Federal Defendants at 24, Texas, No. 19-10011)). Defendants do not address this contention in their reply.
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Defendants similarly contend that the City Plaintiffs lack

standing because their alleged injury – harm to “the City

Plaintiffs’ budgets, including the budgets for their public

health departments, free or reduced-cost clinics, and ambulance

services” - “is premised on an even greater number of uncertain

links in the causal chain, which are either premised on invalid

assumptions or are attributable to the City Plaintiffs

themselves.” (ECF No. 52-1, at 31–32 (quoting ECF No. 44,

¶ 197)). Plaintiffs correctly note that this challenge does not

dispute that budgetary outlays constitute injury in fact but

rather focuses on traceability.

(ECF No. 61, at 24).

Plaintiffs argue that “[a] city has standing ‘when a harm to the

city itself has been alleged[,]’” (id., at 38 (quoting City of

Olmstead Falls v. FAA, 292 F.3d 261, 268 (D.C. Cir. 2002), and

elaborates that a city may sue to protect its proprietary

interests, including “‘management, public safety, [and]

economic’ harms[,]” (id. (quoting City of Sausalito v. O’Neill,

386 F.3d 1186, 1197-99 (9th Cir. 2004). Plaintiffs also

highlight four cases that have found standing where policies

have shifted costs onto governments to provide uncompensated

health care: (1) Massachusetts v. U.S. Dep’t of Health & Human

Servs., 923 F.3d 209 (1st Cir. 2019); (2) California v. Azar, 911

F.3d 558 (9th Cir. 2018); (3) Pennsylvania v. Trump, 351

F.Supp.3d 791 (E.D.Pa. 2019); and (4) U.S. House of

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Representatives v. Price, No. 16-5202, 2017 WL 3271445, at *1 (D.C. Cir. 2017) (per curiam). Defendants again do not address Plaintiffs’ argument but focus on traceability. The City Plaintiffs satisfy the first element of constitutional standing.
2. Traceability and Redressability11 “For an injury to be traceable, ‘there must be a causal connection between the injury and the conduct complained of’ by the plaintiff.” Air Evac EMS, Inc., 910 F.3d at 760 (quoting Lujan, 504 U.S. at 560). “While the defendant’s conduct need not be the last link in the causal chain, the plaintiff must be able to demonstrate that the alleged harm was caused by the defendant, as opposed to the ‘independent action of some third party not before the court.’” Id. (quoting Frank Krasner Enters., Ltd. v. Montgomery Cty., 401 F.3d 230, 234 (4th Cir. 2005). Although a plaintiff’s theory of standing may “not rest on mere speculation about the decisions of third parties[,]” it may “rel[y] instead on the predictable effect of Government
11 The parties conflate their arguments regarding the second and third elements of constitutional standing: traceability and redressability. (ECF No. 52-1, at 31 (“For similar reasons, nor would the Individual Plaintiffs’ asserted injury be redressed by striking down the challenged actions.”) (alteration and quotation marks omitted); ECF No. 61, at 38 (“By the same token, the Individual Plaintiffs’ injuries would be redressed by a decision invalidating Defendants’ actions.”); ECF No. 92, at 15 (“Given the lack of causation, Plaintiffs also fail to show that their claimed injuries would be redressed by a decision setting aside the challenged aspects of the 2019 Rule.”)).
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action on the decisions of third parties.” Dep’t of Commerce v. New York, 139 S.Ct. 2551, 2566 (2019).
Defendants contend that “Plaintiffs have not established that Defendants’ actions are the cause of Plaintiffs’ purported harms, nor can they make this showing.” (ECF No. 52-1, at 25). Defendants primarily advance two arguments in support of this contention. The first asserts that “the Individual Plaintiffs have not shown that there is a causal link. . . because Defendants do not set individual health insurance premiums; rather, issuers set them by taking into account a wide range of factors that are in turn dependent on a whole host of other third party actors.” (Id., at 26). Relatedly, Defendants argue that the City Plaintiffs’ “standing allegations are even weaker[]” because “[t]heir alleged injury is premised on an even greater number of uncertain links in the causal chain[.]” (Id., at 31). This first argument focuses on third party actors. Defendant’s second argument emphasizes that Plaintiffs must demonstrate standing for each claim individually and argues that Plaintiffs fail to demonstrate that any of Defendants’ actions are a substantial factor in their injury. (ECF No. 92, at 917).
Defendants highlight two cases, Frank Krasner Enterprises, Ltd. v. Montgomery County, 401 F.3d 230 (4th Cir. 2005), and American Freedom Law Center v. Obama, 821 F.3d 44 (D.C. Cir.
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2016), to support their first argument that third party actors

break the chain of causation between their challenged actions

and Plaintiffs’ injury. (ECF No. 52-1, at 26–31). Crucially,

“the Frank Krasner [c]ourt did not establish that courts could

never find standing when the ‘asserted injury arises from the

government's allegedly unlawful regulation (or lack of

regulation) of someone else,’ only that doing so will be

‘substantially more difficult.’” Mayor of Balt., 416 F.Supp.3d

at 489 (quoting Frank Krasner, 401 F.3d at 235). Judge

Hollander aptly summarized Frank Krasner’s limits:

In the recent case of Department of

Commerce v. New York, ––– U.S. ––––, 139 S.

Ct. 2551, 204 L.Ed.2d 978 (2019), the

Supreme Court confronted the standing

arguments the government raises here. That

case involved the Department of Commerce’s

plan to ask about citizenship on the 2020

United States Census.

Several states,

counties, cities, and other entities

challenged the change as arbitrary and

capricious under the Administrative

Procedure Act. Id. at 2564. The respondent

challengers maintained that the question

would result in residents declining to

complete the Census, and that this

underreporting would, in turn, lead to a

host of injuries, including a loss of

federal funds for states with a

disproportionate share of noncitizen

households. Id. at 2565.

The Department of Commerce contested

respondents’ Article III standing on the

ground that the alleged harms were not

traceable to the Department’s actions but to

the independent actions of third

parties. Id. at 2565-66.

Indeed, the

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Department contended that the chain of

causation was further attenuated by the fact

that the intervening, third party-actions

were unlawful and driven by “unfounded

fears.” Id. The Supreme Court rejected the

Department’s

argument, concluding

that

respondents “met their burden of showing

that third parties will likely react

in predictable ways to the citizenship

question, even if they do so unlawfully and

despite the requirement that the Government

keep individual answers confidential.”

Id. at 2566 (emphasis added). As a result,

the respondents’ theory of standing “d[id]

not rest on mere speculation about the

decisions of third parties” but “instead on

the predictable effect of Government action

on the decisions of third parties.” Id.

Id., 416 F.Supp.3d at 489. Plaintiffs contend that “independent

analyses and issuers’ explanations confirm Plaintiffs’

allegations that Defendants’ actions have caused price

increases.” (ECF No. 61, at 37). Plaintiffs have sufficiently

alleged that insureds and issuers reacted in “predictable ways”

to Defendants’ actions.

Defendants’ discussion of American Freedom Law Center is

also unpersuasive. Defendants emphasize the language: “[M]any

factors determine the cost of health care, including

administrative costs, drug costs, and the health and age of the

national populace. Changes in any of these factors could cause

costs to increase or decrease, and it is difficult to separate

out which factors actually cause any specific price adjustment.”

Am. Freedom Law Ctr., 821 F.3d at 51. However, American Freedom

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Law Center does not conclude that a plaintiff can never

establish a causal link between increased premiums and

challenged policies.

Contrary to Defendants’ assertion,

Plaintiffs provide more than “unadorned speculation as to the

existence of a relationship between the challenged government

action and the third-party conduct[.]” (ECF No. 52-1, at 29

(quoting Am. Freedom Law Ctr., 821 F.3d at 49)). Plaintiffs

correctly note that Defendants criticize and emphasize one

allegation, “Healthkeepers’ statement that ‘the elimination of

the individual mandate penalty for lack of minimum essential

coverage and potential movement into other markets’ are factors

that the issuer considered in setting its 2019 health insurance

rate[,]” (ECF No. 52-1, at 29 (quoting ECF No. 44, ¶ 277)), and

ignore “page upon page of independent studies and analyses,

statements from issuers, and statistics [detailing] how

Defendants’ actions have harmed health insurance markets.”12

12 Defendants also argue that “Congress’s reduction of the

individual mandate tax penalty to zero . . . is not attributable

to Defendants (nor do Plaintiffs allege otherwise)[.]” (ECF No.

52-1, at 29). Plaintiffs counter that “Defendants’ actions need

not be the sole cause” and regardless, the elimination of the

individual mandate and its resultant encouragement of

individuals to purchase non-ACA compliant plans “confirms,

rather than defeats, Plaintiffs’ allegations concerning

causation; the availability and desirability of those

alternatives . . . is itself a result of Defendants’ own

decisions to expand access to them.” (ECF No. 61, at 42–43).

Plaintiffs’ counterargument is persuasive.

Indeed, their

allegations regarding EO 13,813, which directed the

Administration to expand access non-ACA compliant plans, state:

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(ECF No. 61, at 26, 35-38). Plaintiffs also fairly distinguish
their complaint from “the 19-page complaint in [American Freedom
Law Center]” and emphasize that the only evidence offered to
support causation in American Freedom Law Center was a single
rate filing (that may not have applied to the plaintiffs’ plan
at all and was contradicted by subsequent filings). (Id., at
37–38).
Defendants’ second argument is more compelling but still
unavailing. Here, Defendants distinguish between standing to
assert the APA claim and standing to assert the Take Care Clause
claim. Defendants contend that Plaintiffs’ factual allegations
regarding the APA claim predate the 2019 Rule. (ECF No. 92, at
10–15 (“[C]hanges that occurred before the 2019 Rule went into
effect cannot be attributed to the challenged aspects of the
2019 Rule.”)). For the Individual Plaintiffs, Defendants
contend that “the 2019 Rule could not have affected the
“Executive Order No. 13,813 will open doors for young and healthy people to flee the ACA-compliant market, i.e., the exchanges, and find lower premiums off of the exchanges. Because on-exchange purchasers will as a group be older and sicker than they have been in prior years, premiums for on-exchange purchasers will increase. This will lead to decreased enrollments in ACAcompliant plans, particularly among the young and healthy. The Order will thereby increase costs and decrease coverage[.]”
(ECF No. 44, ¶ 110 (alterations and quotation marks omitted). 34

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[I]ndividual Plaintiffs’ premiums at all prior to 2019 (since
premiums for the new plan year would not have taken effect until
January 2019).” (Id., at 14). For the City Plaintiffs,
Defendants contend that they failed to show “that each
challenged aspect of the 2019 Rule will be a substantial factor
in the increased premiums and decreased enrollments that they
predict, [and] also that those increased premiums and decreased
enrollments will shift costs onto the City Plaintiffs.” (Id.,
at 15 (citations and quotation marks omitted). Contrary to
Defendants’ assertions, Plaintiffs do “tie[]. . . the challenged
provisions of the 2019 Rule to increased costs, inaccessibility
of quality coverage, and rises in the uninsured and underinsured
rates.” (ECF No. 61, at 31). Plaintiffs’ opposition details
the amended complaint’s allegations and explains that:
eliminating the direct notification requirement causes individuals to lose their premium tax credits and drop insurance coverage, [ECF No. 44, ¶ 56];
outsourcing plan review to states allows restrictive networks to flourish, meaning that more individuals purchase inadequate insurance; id. ¶ 63;
scaling back oversight of agents, brokers, and issuers makes it harder for consumers to receive accurate information and enroll in the right plan; id. ¶ 68;
eliminating support for standardized options limits price competition, thereby raising premiums, cost-sharing payments, and deductibles; id. ¶ 74;
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decreased access to impartial, in-person Navigators deprives individuals of the assistant they need to enroll; id. ¶ 79;

making exchanges for small businesses less functional impedes employers from enrolling their employees and inhibits price competition among issuers; id. ¶ 82;

requiring enrollees to verify their income will deter enrollment, particularly among healthy individuals, which will thereby increase premiums; id. ¶¶ 85–86;

scaling back rate review will make it easier for insurers to raise premiums, causing more individuals to forgo insurance; id. ¶ 93; and

allowing issuers to claim a set figure for quality improvement activities will make it easier to avoid paying rebates, increasing the cost of health care without increasing quality, id. ¶ 98.

(ECF No. 61, at 31-32).

These allegations outline the

predictable results of the 2019 Rule.

Defendants contend that Plaintiffs’ factual allegations

regarding the Take Care Clause claim “fail to show that any of

the challenged conduct was a ‘substantial factor’ in producing

the harms” and “the notion that any of the challenged actions

could conceivably qualify as a ‘substantial factor’ in issuer

decisions to set rates, or in consumer decisions to enroll in

health plans, is far-fetched.” (ECF No. 92, at 16-17).

Defendants try to bolster their Take Care Clause argument by

pointing to “Congress’s decision to set the penalty for failure

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to comply with the individual mandate at zero[]” as the cause of
reduced enrollments.” (Id., at 16). Plaintiffs outline the
amended complaint’s allegations “that Defendants have engaged in
a campaign to undermine the ACA comprising many discrete actions
that, both individually and in combination, make ACA-compliant
health insurance more expensive, less effective, and less
accessible.” (ECF No. 61, at 32). Plaintiffs’ allegations
regarding cost-sharing reduction payments provide a useful
example. They allege:
Exemplifying the Trump Administration’s strategy is the way in which the Administration, over the course of the summer and the fall in 2017, repeatedly threatened to discontinue reimbursing insurers for cost-sharing reductions – to stop paying insurers back for the reductions in copayments, coinsurance, and so on, that the Act requires them to provide to consumers . . . [T]he Administration’s actions, aimed toward provoking a legislative repeal, were deliberately designed to introduce uncertainty into the exchanges through threats that the CSR payments would cease. As the President himself asserted . . . “If you don’t make them, [the ACA exchange] fails.”
The threats served their purpose. Throughout the country, some insurers that had previously sold health insurance through the exchanges for the 2017 plan year exited them entirely, refusing to offer coverage for the 2018 plan year because of the Administration’s refusal to guarantee that CSR payments would continue. That left some counties with decreased competition among issuers, which (again) drives up prices and decreases overall enrollment. Indeed, at
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the time, the Congressional Budget Office

warned that terminating CSR payments could

increase the percentage of people living in

areas not served by a single insurer between

2018 and 2020.

Other insurers raised

premiums by as much as 23 percent for 2018

to guard against the risk that they would

not receive the payments . . .

Tellingly, the Trump Administration ultimately stopped making CSR payments on October 12, 2017, shortly after the reconciliation instruction for legislation to repeal and replace the ACA expired . . . Some insurers and insurance commissioners adjusted to the Administration’s action by raising premiums rather than pulling out of the exchanges entirely.

(ECF No. 44, ¶¶ 105-107). Plaintiffs fairly tie Defendants’

actions to the harm alleged in their Take Care Clause claim.

Moreover, while Defendants attempt to blame decreased enrollment

on Congress’s reduction of the individual mandate to zero,

Plaintiffs allege that “promoting and expanding access to non-

ACA compliant plans causes individuals, particularly healthy

individuals, to leave the marketplace[]” and that “threatening

[not to] enforce the individual mandate and expanding exemptions

similarly caused individuals, particularly healthy individuals,

to leave the marketplace, driving up premiums for those that

remained.” (ECF No. 61, at 32 (citing ECF No. 44, ¶¶ 110–22).

Defendants’ actions need not be “the sole or even immediate

cause of the injury.” Sierra Club v. U.S. Dep’t of the

Interior, 899 F.3d 260, 284 (4th Cir. 2018). Plaintiffs

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sufficiently allege that Defendants’ actions underlying the Take Care Clause claim caused their asserted harm.
For an injury to be redressable, “it must be likely, and not merely speculative, that a favorable decision will remedy the injury.” Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 154 (4th Cir. 2000). The parties largely rely on their traceability arguments to advance their redressability positions. See supra n.11. Defendants elaborate that the court “cannot compel a health plan issuer to maintain a certain premium rate level[]” and that invalidating the challenged actions would not “necessarily lead to any rate decreases . . . because a health plan issuer has the discretion to establish premium rates in a manner deemed appropriate by the issuer within the broad parameters set by federal and state laws.” (ECF No. 52-1, at 31). Plaintiffs counter that the court “need not compel issuers to set rates at a particular level; a favorable decision would abate Defendants’ ongoing attempts to undermine the ACA, curbing actions that issuers have cited as reasons for their high premiums, and thereby redressing the Individual Plaintiffs’ injuries.” (ECF No. 61, at 38). Defendants’ argument that Plaintiffs’ injury cannot be redressed because it is dependent on third party actions and speculative, like Defendants’ traceability argument, fails. The relief
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sought here would redress Plaintiffs injuries by ameliorating the predictable results of Defendants’ challenged actions.
B. Ripeness “The doctrine of ripeness prevents judicial consideration of issues until a controversy is presented in clean-cut and concrete form.” Miller v. Brown, 462 F.3d 312, 318–19 (4th Cir. 2006) (internal quotation marks omitted). The ripeness inquiry requires courts to “‘balance the fitness of the issues for judicial decision with the hardship to the parties of withholding court consideration.’” Lansdowne on the Potomac Homeowners Ass’n, Inc. v. OpenBand at Lansdowne, LLC, 713 F.3d 187, 198 (4th Cir. 2013) (quoting Miller, 462 F.3d at 319). “[A] case is ‘fit for judicial decision when the issues are purely legal and when the action in controversy is final and not dependent on future uncertainties.’” Id. (quoting Miller, 462 F.3d at 319). “The hardship prong is measured by the immediacy of the threat and the burden imposed on the [plaintiff].” Id. at 199 (quoting Charter Fed. Sav. Bank v. Office of Thrift Supervision, 976 F.2d 203, 208–09 (4th Cir. 1992). Defendants contend that, for many of the same reasons Plaintiffs lack standing, the claims are not ripe for review. Plaintiffs, too, acknowledge that standing and ripeness are often congruent issues. Because many of the claims are
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primarily legal, and the alleged hardships are already

occurring, the claims are ripe.

IV. Fed.R.Civ.P. 12(b)(6).

A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the

sufficiency of the complaint.

Presley v. City of

Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

In

evaluating the complaint, unsupported legal allegations need not

be accepted. Revene v. Charles Cty. Comm’rs, 882 F.2d 870, 873

(4th Cir. 1989).

Legal conclusions couched as factual

allegations are insufficient, Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009), as are conclusory factual allegations devoid of any

reference to actual events. United Black Firefighters of

Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also

Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009).

“[W]here the well-pleaded facts do not permit the court to infer

more than the mere possibility of misconduct, the complaint has

alleged – but it has not ‘show[n]’ – ‘that the pleader is

entitled to relief.’” Iqbal, 556 U.S. at 679 (quoting

Fed.R.Civ.P. 8(a)(2). Thus, “[d]etermining whether a complaint

states a plausible claim for relief will . . . be a context-

specific task that requires the reviewing court to draw on its

judicial experience and common sense.” Id.

It is axiomatic that, “[g]enerally, when a defendant moves

to dismiss a complaint under Rule 12(b)(6), courts are limited

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to considering the sufficiency of allegations set forth in the complaint and the ‘documents attached or incorporated into the complaint.’” Zak v. Chelsea Therapeutics Int’l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011)). Courts are, however, permitted to consider facts and documents subject to judicial notice because, under Federal Rule of Evidence 201, courts “at any stage of a proceeding” may “judicially notice a fact that is not subject to reasonable dispute.” Id. at 607. Importantly, “[n]evertheless, when a court considers relevant facts from the public record at the pleading stage, the court must construe such facts in the light most favorable to the plaintiffs.” Id.
A. APA Claim The first claim in the amended complaint is for violation of the APA, 5 U.S.C. § 706. Under the APA, the reviewing court shall “hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law[.]” 5 U.S.C. § 706(2)(A). Plaintiffs contend that all of the 2019 Rule’s challenged provisions are arbitrary and capricious and that several of the 2019 Rule’s challenged provisions are contrary to
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law. Defendants disagree.13 As will be discussed infra, Defendants’ arbitrary and capricious challenge is premature and although the contrary to law challenge is not necessarily premature, it is underdeveloped. The parties combined their arguments regarding these challenges. The court endeavored to disentangle the arguments below to allow consideration of each under the appropriate framework.
1. Arbitrary and Capricious The arbitrary and capricious standard requires the agency to “examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v. United States, 371

13 Defendants argue “[a]s an initial matter, the President

is not subject to the APA, Franklin v. Massachusetts, 505 U.S.

788, 828, 796 (1992), and thus, this claim can only proceed as

against the other defendants.”

(ECF No. 52-1, at 38).

Plaintiffs do not challenge this argument in the APA section of

their opposition, (ECF No. 61, at 45-64), and subsequently note

that “while ‘the President’s actions. . . are not reviewable for

abuse of discretion under the APA,’ they ‘may still be reviewed

for constitutionality” (id., at 76 n.26 (quoting Franklin, 505

U.S. at 801)). This observation comports with the amended

complaint, which did not identify the President in Count I.

(See ECF No. 44, ¶ 282 (“As detailed above, Defendants HHS,

Secretary Azar, CMS, and Administrator Verma have failed to

provide adequate reasons, and failed to [respond adequately] to

comments for many provisions of the 2019 Rule, such that they

are ‘arbitrary’ and ‘capricious.’ In addition, as also detailed

above, many provisions of the 2019 Rule violate the [ACA] and

therefore are ‘not in accordance with law.’”)).

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U.S. 156, 168 (1962)). When reviewing the agency’s explanation, the reviewing court “must ‘consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.’” State Farm, 463 U.S. at 43 (quoting Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285 (1974). “[A]n agency decision is arbitrary and capricious if ‘the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’” Sierra Club, 899 F.3d at 293 (4th Cir. 2018) (quoting State Farm, 463 U.S. at 43).
Review under the arbitrary and capricious standard is deferential and narrow. Dep’t of Commerce, 139 S.Ct. at 2569. “[A] court is not to substitute its judgment for that of the agency.” State Farm, 463 U.S. at 43. Nonetheless, the arbitrary and capricious standard “is not meant to reduce judicial review to a ‘rubber-stamp’ of agency action.” Ohio Valley Envtl. Coal. v. Aracoma Coal Co., 556 F.3d 177, 192 (4th Cir. 2009). The reviewing court must “engage in a ‘searching and careful’ inquiry of the record.” Id. (quoting Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).
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Plaintiffs allege that all of the challenged provisions of the 2019 Rule are arbitrary and capricious. As may be expected, many of these allegations overlap. Plaintiffs contend that Defendants failed to cite data or offer evidence in support of the challenged provisions, failed to respond adequately to commenters’ concerns about the challenged provisions, failed to explain sufficiently the challenged provisions that involved policy changes, and deferred to insufficient state processes. (ECF No. 44, ¶¶ 55, 62, 67, 72, 78, 81, 84, 91, 92, 97). Defendants provide CMS’s reasons for implementing the challenged provisions to demonstrate that they are not arbitrary and capricious. (ECF No. 52-1, at 38-59). Defendants also emphasize CMS’s substantial expertise and the deferential nature of review under the arbitrary and capricious standard.
These arguments are premature at the motion to dismiss stage in this case. Plaintiffs argue: “[A]t this early stage of the litigation, Defendants have yet to produce the administrative record, so the [2019 Rule] itself is all that Plaintiffs and the [c]ourt have to go by. That posture alone counsels in favor of permitting Plaintiffs’ claims to proceed, as ‘the [c]ourt cannot properly evaluate’ whether Defendants ‘acted arbitrarily and capriciously’ where ‘the [c]ourt does not have a complete administrative record.’” (ECF No. 61, at 46 (quoting Farrell v. Tillerson, 315 F.Supp.3d 47, 69 (D.D.C.
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2018)).

Defendants respond that the Notice of Proposed

Rulemaking (“NPRM”), the comments responding to the NPRM, and

the Preamble to the Rule are all publicly available and

therefore there is no barrier to dismissal. (ECF No. 92, at 18

n.9).

Because of the sheer number of administrative appeals

arising in the District of Columbia, courts in that circuit have

the most complete description of the procedures for analysis.

In Banner Health v. Sebelius, 797 F.Supp.2d 97, 112-13 (D.D.C.

2011) (footnote omitted), the district judge outlined the

overall approach to an APA challenge in the District of Columbia

Circuit:

“[W]hen a party seeks review of agency action under the APA, the district judge sits as an appellate tribunal.” Am. Bioscience Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). “The entire case is a question of law,” and the “complaint, properly read, actually presents no factual allegations, but rather only arguments about the legal conclusion[s] to be drawn about the agency action.” Marshall Cty. Health Care Auth. v. Shalala, 988 F.2d 1221, 1226 (D.C. Cir. 1993). Therefore, the question is not whether the plaintiff has “raised genuine issues of material fact,” but whether, “based on the agency record[,] . . . the agency acted arbitrarily or capriciously.” Rempfer v. Sharfstein, 583 F.3d 860, 865 (D.C. Cir. 2009) (citing 5 U.S.C. § 706), cert. denied sub nom. Rempfer v. Hamburg, ––– U.S. ––––, 130 S.Ct. 1707, 176 L.Ed.2d 183 (2010).

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When presented with a motion to dismiss for failure to state a claim, the district court may, in appropriate circumstances, reach the merits even in the absence of the administrative record, as when the parties’ arguments can be resolved with reference to nothing more than the relevant statute and its legislative history. [See Dist. Hosp. Partners, L.P. v. Sebelius, 794 F.Supp.2d 162, 169–72 (D.D.C. 2011)]. Moreover, a court may generally take judicial notice of materials published in the Federal Register without converting the motion to one for summary judgment. See 44 U.S.C. § 1507 (“The contents of the Federal Register shall be judicially noticed.”).
Nevertheless, in recognition of the dangers associated with proceeding with judicial review “on the basis of a partial and truncated record” without the consent of the parties, Nat. Res. Def. Council, Inc. v. Train, 519 F.2d 287, 291–92 (D.C. Cir. 1975), when the arguments raised go to the question of whether the agency has adhered to the standards of decisionmaking required by the APA, the United States Court of Appeals for the District of Columbia Circuit has advised that the “better practice” is to test the parties’ arguments in the context of a motion for summary judgment and with reference to the full administrative record. Marshall Cty., 988 F.2d at 1226 n.5. “If a court is to review an agency’s action fairly, it should have before it neither more nor less information than did the agency when it made its decision.” Walter O. Boswell Mem’l Hosp. v. Heckler, 749 F.2d 788, 792 (D.C. Cir. 1984); see also Occidental Petroleum Corp. v. Secs. & Exch. Comm’n, 873 F.2d 325, 338 (D.C. Cir. 1989) (“[I]n order to allow for meaningful judicial review, the agency must produce an administrative record that delineates the path by which it reached its decision.”).
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Consistent with this guidance, courts routinely exercise their discretion to decline to reach the ultimate question of whether the agency’s decisionmaking process was arbitrary or capricious in the absence of the full administrative record. See, e.g., Ravulapalli v. Napolitano, 773 F.Supp.2d 41, 53–54 (D.D.C. 2011); Int’l Longshoremen’s Ass’n, AFL–CIO v. Nat’l Mediation Bd., No. 04 Civ. 824(RBW), 2005 WL850358, at *4 (D.D.C. Mar. 30, 2005).
In a similar case where a defendant, in reference to
material in the Federal Register, argued that the decisionmaking
was explained sufficiently, the court concluded that such
analysis would be premature:
Even though the Court may refer to the Federal Register, it concludes that dismissal based solely on its contents would be premature here because a review of the administrative record is necessary to a determination of whether the Secretary’s methodology was arbitrary and capricious.
Dist. Hosp. Partners, 794 F.Supp.2d at 171. The situation is
the same here. The court declines to examine a truncated record
in evaluating this claim.
2. Contrary to Law
“When a challenger asserts that an agency action conflicts
with the language of a statute, [the reviewing court] generally
appl[ies] the two-step analytical framework set forth in
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S.
837, 842-43 (1984).” Sierra Club v. U.S. Army Corps of Eng’rs,
909 F.3d 635, 643 (4th Cir. 2018). The Chevron framework
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“operates as a tool of statutory construction whereby [the reviewing court] give[s] plain and unambiguous statutes their full effect; but, where a statute is either silent or ambiguous, [the reviewing court] afford[s] deference ‘to the reasonable judgments of agencies with regard to the meaning of ambiguous terms or silence in statutes that they are charged with administering.’” People for the Ethical Treatment of Animals v. U.S. Dep’t of Agriculture, 861 F.3d 502, 506 (4th Cir. 2017) (quoting Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 739 (1996) (alteration omitted)).
Plaintiffs allege that the first challenged provision of the 2019 Rule, relating to the elimination of the direct notification requirement before denying APTC for failure to reconcile, “conflicts with express statutory language requiring that any eligible individual be allowed to claim APTC.” (ECF No. 44, ¶ 54). The Internal Revenue Code (“IRC”) provides the express statutory language on which Plaintiffs rely: “In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed . . . for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxpayer year.” 26 U.S.C. § 36B(a). “The term ‘applicable taxpayer’ means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount
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equal to the poverty line for a family of the size involved.” 26 U.S.C. § 36B(c)(1)(A). Plaintiffs contend: “Whether an individual has reconciled her APTC has no bearing on whether she is an ‘applicable taxpayer’ under the statute. Therefore, depriving an ‘applicable taxpayer’ of the credit that the statute says ‘shall be allowed’ based on a failure to reconcile . . . violates the plain language of the statute.” (ECF No. 44, ¶ 54). Defendants argue that the IRC provision “is not under the jurisdiction of CMS,” and regardless, “there is no conflict between the challenged provision and § 36B of the IRC because nothing in the challenged provision deprives an individual from receiving APTC as long as she or he complies with the statutory and regulatory eligibility requirements.” (ECF No. 52-1, at 4950). In other words, the challenged provision “does not address taxpayers’ eligibility” but instead “governs when an Exchange will make advance payments of those tax credits directly to a health plan on behalf of an Exchange enrollee.” (ECF No. 92, at 20). Plaintiffs respond by highlighting Defendants’ lack of “authority for the . . . proposition that agency regulations must only comply with statutes that the agency administers,” and by emphasizing that “where there is a conflict between a regulation and a statute . . . the statute controls regardless of where it is codified[.]”14 (ECF No. 61, at 48).
14 Plaintiffs also note that the challenged provision raises 50

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Plaintiffs allege that the second challenged provision of the 2019 Rule, relating to outsourcing to the states compliance review of federal plans, “conflicts with express statutory language . . . that requires the federal government, as the administrator of federally-facilitated exchanges, to certify plans proffered by insurers as [QHPs.]” (ECF No. 44, ¶ 60). Plaintiffs contend that “[i]nterpreting the statute to prohibit CMS’s decision to rubber-stamp states’ review of network adequacy for federally-facilitated exchanges is also consistent with the Act’s purpose.” (Id., ¶ 61). Plaintiffs rely on the ACA’s language that HHS “shall, by regulation, establish criteria for the certification of health plans as [QHPs,]” 42 U.S.C. § 18031(c)(1), including criteria that ensure network adequacy, and that, pursuant to those criteria, “[a]n Exchange shall, at a minimum[,] implement procedures for the certification, recertification, and decertification . . . of health plans as [QHPs,]” 42 U.S.C. § 18031(d)(4)(A). Defendants contend that the challenged provision “falls well within CMS’s authority to promulgate regulations” under § 18031(c)(1). (ECF No. 52-1, at 56). Defendants argue that § 18031(d)(4) “does not require CMS . . . to conduct the QHP certification process or
“significant due process concerns.” (ECF No. 61, at 47; see also ECF No. 44, ¶ 55 (“[T]he direct notice requirement was added to the failure to reconcile provision in 2016 in response to concerns that denying APTCs without direct notice would violate due process.”)).
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assess network adequacy itself[]” and “the challenged provision does what § 18031(d)(4) requires: implementing a procedure for FFE QHP certification – one that relies on [s]tates’ processes[.]” (Id., at 55-56). Plaintiffs respond that the ACA’s “repeated use of the term ‘shall’ makes plain that these are mandatory duties[]” and that “CMS does not ‘implement procedures for . . . certification’ by leaving certification to others.” (ECF No. 61, at 50).
Plaintiffs allege that the fifth challenged provision, relating to changes to the Navigator program, “is contrary to law because it permits entities to qualify as Navigators that cannot satisfy the relevant statutory criteria.” (ECF No. 44, ¶ 76). Plaintiffs identify those criteria as: (1) conducting “public education activities to raise awareness of the availability of [QHPs],” 42 U.S.C. 18031(i)(3)(A); (2) distributing “fair and impartial information concerning enrollment in [QHPs], and the availability of premium tax credits . . . and cost-sharing reductions,” id. 18031(i)(3)(B); (3) facilitating “enrollment in [QHPs],” id. 18031(i)(3)(C); (4) providing “enrollees with grievances, complaints, or questions about their health plans with referrals to specified entities,” id. 18031(i)(3)(D); and (5) providing “information in a manner that is culturally and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges,”
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id. 18031(i)(3)(E). (ECF No. 44, ¶ 76). Defendants argue that “the ACA does not require Navigators to have a physical presence in the Exchange’s service area, nor mandate a two-Navigator minimum for every Exchange[]” but rather “sets forth broader requirements for Navigators.” (ECF No. 92, at 27). Defendants conclude that absent any statutory directive, “the same statutory authority that allowed CMS to establish the prior standards for Navigator certification now allows CMS to modify those standards.”15 (ECF No. 52-1, at 46 (citation omitted)).
Plaintiffs allege that the sixth challenged provision, regarding the removal of certain requirements for SHOP exchanges, is contrary to law because “the removal of these requirements permits SHOPs that cannot fulfill their statutory duties . . . which violates the ACA’s text.” (ECF No. 44, ¶ 81). This argument is similar to Plaintiffs’ argument regarding the Navigator program. Defendants argue that the ACA does not require SHOPs “to perform the functions removed by the new rule.” (ECF No. 52-1, at 53). In their reply, Defendants contend that Plaintiffs failed to contest this argument in their opposition and therefore have abandoned any claim that the SHOP changes are contrary to law. (ECF No. 92, at 28-29). Despite
15 Defendants also argue the 2019 Rule improves flexibility for Exchanges because despite eliminating the requirements, Exchanges could nonetheless choose Navigators that comply with them. (ECF No. 92, at 27).
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Defendants’ characterization, Plaintiffs’ opposition argues that the changes “permit SHOPS to operate even where they cannot possibly meet the ACA’s command that they ‘make available [QHPs] to qualified individuals and qualified employers’” and therefore “undercuts the ACA’s purpose.” (ECF No. 61, at 56).
Plaintiffs allege that part of the eighth challenged provision, regarding the exemption of student health plans from rate review, is contrary to the text of the ACA. (ECF No. 44, ¶ 90). Plaintiffs explain that “the ACA requires review of ‘unreasonable increases in premiums for health insurance coverage,’ 42 U.S.C. § 300gg-94(a)(1), which are defined as ‘benefits consisting of medical care,’ id. § 300gg-91(b)(1) – a term that encompasses student health plans, which . . . provide medical care benefits like any other health insurance plan.” (ECF No. 44, ¶ 90). “[T]he only exceptions to rate review are for ‘excepted benefits’ and ‘grandfathered health plan’ coverage, both of which are mandated by statute, see 42 U.S.C. §§ 300gg-91(c), 18011, and for large group plan rates, which are negotiated on a group-by-group basis and therefore cannot be effectively reviewed.” (ECF No. 44, ¶ 90). Defendants discuss 42 U.S.C. § 18118(c), and argue that “CMS has long interpreted the ACA to exclude student health insurance plans from ACA requirements that ‘would have, as a practical matter, the effect of prohibiting an institution of higher education from offering
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a student health plan otherwise permitted under federal, state, or local law.” (ECF No. 52-1, at 39). Defendants offer three examples of exemptions for student health plans under § 18118(c): (1) student health plans are exempt “from the ACA’s guaranteed availability and renewability requirements to the extent that such requirements would require a student health insurance plan to accept enrollment or renew coverage of individuals who are not students or dependents of students[;]” (2) student health plans may offer coverage based on the academic year, rather than the calendar year; and (3) “student health insurance coverage is not included in the ACA’s individual market single risk pool in a State because issuers of student health insurance coverage typically contract with colleges and universities to issue a blanket health insurance policy[.]” (Id., at 40). Plaintiffs question Defendants’ invocation of § 18118(c) and proffer of these three examples: “CMS did not invoke § 18118 in the 2019 Rule itself – let alone articulate this novel rationale – and Defendants cannot do so now.” (ECF No. 61, at 60).
Finally, Plaintiffs allege that the ninth challenged provision, “allowing insurers to claim a flat credit for quality improvement activities [when calculating MLR], is contrary to the text of the ACA.” (ECF No. 44, ¶ 96). Plaintiffs contend that the ACA “requires insurers to report the amount actually
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spent on QIA[.]” (Id. (discussing 42 U.S.C. § 300gg-18(a)(1)).

They argue that the ACA “does not permit CMS to . . . throw up

its hands and give every insurer the same credit [for QIA],

whether or not the funds are actually expended.” (Id.).

Defendants argue that § 300gg-18(a)(2) “directs insurers to

report ‘the percentage of total premium revenue, after

accounting for collections or receipts for risk adjustments and

risk corridors and payments of reinsurance, that such coverage

expends . . . for [QIA].’” (ECF No. 52-1, at 58). Defendants

conclude that “[b]y its express terms, the statute does not

require issuers to provide an itemized list of each QIA

expenditure that contributes to the calculation of the MLR; the

itemized method was imposed only by regulation.” (Id.).

Pure matters of law may be resolved on a motion to dismiss

and, at times, determining whether an agency’s actions are

contrary to law presents such a question of law. See, e.g. King

v. Burwell, 759 F.3d. 358, 367-376 (4th Cir. 2014), aff'g King v.

Sebelius, 997 F.Supp.2d 415 (E.D.Va. 2014), aff'd, 135 S.Ct.

2480 (2015). Of course, the issue can also be resolved on a

motion for summary judgment.

Defendants’ arguments are

insufficiently developed to demonstrate that Plaintiffs’ claims

would fail under the Chevron standard. See Farrell, 315

F.Supp.3d at 65-68. Defendants appear to raise both Chevron

step one and Chevron step two arguments but do not clearly apply

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the Chevron analysis. The United States Court of Appeals for the Fourth Circuit explained the framework:
At Chevron’s first step, a court looks to the “plain meaning” of the statute to determine if the regulation responds to it. Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. If it does, that is the end of the inquiry and the regulation stands. Id. However, if the statute is susceptible to multiple interpretations, the court then moves to Chevron’s second step and defers to the agency’s interpretation so long as it is based on a permissible construction of the statute. Id. at 843, 104 S.Ct. 2778. King, 759 F.3d at 367. “The objective of Chevron step one is not to interpret and apply the statute to resolve a claim, but to determine whether Congress’s intent in enacting it was so clear as to foreclose any other interpretation.” Id. “Courts should employ all the traditional tools of statutory construction in determining whether Congress has clearly expressed its intent regarding the issue in question.” Id. Defendants here attempt “to interpret and apply” the ACA but they fail to grapple with Congress’s intent. Moreover, the parties combined their arbitrary and capricious arguments with their contrary to law arguments. Because all of the provisions challenged as contrary to law are also challenged as arbitrary and capricious, the court will not resolve the contrary to law arguments separately now.
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B. Take Care Clause Claim The second claim in the amended complaint is for violation of the “Take Care Clause,” U.S. Const. art II, § 3. Plaintiffs assert that the court “has authority to issue ‘equitable relief [to] prevent[] entities from acting unconstitutionally.’” (ECF No. 44, ¶ 14) (quoting Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 491 n.2 (2010)). The viability of the “Take Care Clause” as a stand-alone cause of action is, to put it lightly, uncertain. No court in this circuit, or any other circuit, has definitively found that the “Take Care Clause” provides a private cause of action which a plaintiff may bring against the President of the United States or his administration. Arguably the closest any court has come to doing so is the D.C. Circuit in National Treasury Employees Union v. Nixon, 492 F.2d 587 (D.C. Cir. 1974). In that case, the D.C. Circuit issued broad dicta about the constitutional implications of the Take Care Clause, specifically noting that the constitutional duty arising from the Take Care Clause “does not permit the President to refrain from executing laws duly enacted by the Congress[.]” Nixon, 492 F.2d at 604. Critically, though, Nixon did not involve a freestanding cause of action brought under the Take Care Clause. Rather, Plaintiffs in that case asserted claims for mandamus pursuant to 28 U.S.C. § 1361 and declaratory relief pursuant to the Federal
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Declaratory Judgment Act, 28 U.S.C. § 2201. The court in Nixon held that it had subject matter jurisdiction under the former, and the alternative power to issue declaratory relief pursuant to the latter. Section 1361 grants district courts “original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” 28 U.S.C. § 1361. The court ultimately issued a declaratory judgment against President Nixon declaring that “that the President has a constitutional duty forthwith to grant, effective as of October, 1972, the federal pay increase mandated by the Congress and sought by NTEU herein so that the members of NTEU can collect what has been due them for many months.” Nixon, 492 F.2d at 616.
While the D.C. Circuit did find that the President’s “constitutional duty” to implement a federal pay increase arose from the Take Care Clause, it did not find that the Take Care Clause creates a federal cause of action. Indeed, even though the existence of such a cause of action was not directly before the court, the D.C. Circuit was still careful to limit itself to a declaratory judgment only, refusing to issue an injunction or writ of mandamus. The court stated that “[w]e so restrict ourselves at this time in order to show the utmost respect to the office of the Presidency and to avoid, if at all possible,
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direct involvement by the Courts in the President's
constitutional duty faithfully to execute the laws and any clash
between the judicial and executive branches of the Government.”
Id. (emphasis added).
To understand the D.C. Circuit’s reluctance to so involve
itself, the court must look back to Mississippi v. Johnson, 71
U.S. 475 (1866), the clearest statement the Supreme Court of the
United States has given on the Take Care Clause. There, the
state of Mississippi sought to force President Andrew Johnson,
by writ of mandamus, to “faithfully execute” portions of a
series of Reconstruction Acts. The Supreme Court refused,
contrasting a series of earlier cases where courts had issued
writs of mandamus to lower executive branch officials:
A ministerial duty, the performance of which may, in proper cases, be required of the head of a department, by judicial process, is one in respect to which nothing is left to discretion. It is a simple, definite duty, arising under conditions admitted or proved to exist, and imposed by law.
The case of Marbury v. Madison, Secretary of State, furnishes an illustration. A citizen had been nominated, confirmed, and appointed a justice of the peace for the District of Columbia, and his commission had been made out, signed, and sealed. Nothing remained to be done except delivery, and the duty of delivery was imposed by law on the Secretary of State. It was held that the performance of this duty might be enforced by mandamus issuing from a court having jurisdiction.
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So, in the case of Kendall, PostmasterGeneral, v. Stockton & Stokes, an act of Congress had directed the Postmaster-General to credit Stockton & Stokes with such sums as the Solicitor of the Treasury should find due to them; and that officer refused to credit them with certain sums, so found due. It was held that the crediting of this money was a mere ministerial duty, the performance of which might be judicially enforced.
In each of these cases nothing was left to discretion. There was no room for the exercise of judgment. The law required the performance of a single specific act; and that performance, it was held, might be required by mandamus.
Very different is the duty of the President in the exercise of the power to see that the laws are faithfully executed, and among these laws the acts named in the bill. By the first of these acts he is required to assign generals to command in the several military districts, and to detail sufficient military force to enable such officers to discharge their duties under the law. By the supplementary act, other duties are imposed on the several commanding generals, and these duties must necessarily be performed under the supervision of the President as commanderin-chief. The duty thus imposed on the President is in no just sense ministerial. It is purely executive and political.
Johnson, 71 U.S. at 498-99.
The distinction which the Court in Johnson created was
between “ministerial” duties and “executive and political”
duties. The former could be enforced, by mandamus, on executive
branch officials – and perhaps, though not clearly so, even on
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the President – while the latter were beyond the purview of the courts. The D.C. Circuit in Nixon explained this distinction as one that turns on the amount of discretion afforded to the executive branch: “‘If the law direct him to perform an act in regard to which no discretion is committed to him, and which, upon the facts existing, he is bound to perform, then that act is ministerial[.]’” Nixon, 492 F.2d at 602 (quoting Roberts v. United States ex rel. Valentine, 176 U.S. 219, 231 (1900), and citing to Wilbur v. United States ex rel. Krushnic, 280 U.S. 306, 318-19 (1930)). The court in Nixon went on to hold that it “possesses the authority to mandamus the President to perform the ministerial duty involved herein[.]” Id. at 616. That duty was the putting into effect of a Congressionally mandated pay raise for the plaintiffs. Id. at 595. Critically, the court found that issuing a declaratory judgment on the President’s obligation to effect the pay raise would “not require any court supervision over the performance of duty by the executive branch.” Id. at 605.
Despite this cautious history, Plaintiffs blithely assert that this court has jurisdiction and they enjoy a right to sue directly under the Take Care Clause. Plaintiffs argue that:
Faced with the strikingly similar “assert[ion] that [the plaintiffs] have not pointed to any case in which this Court has recognized an implied private right of action directly under the Constitution to
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challenge governmental action under . . .

separation-of-powers

principles,”

the

Supreme Court rejected it, reaffirming that

“equitable relief has long been recognized

as the proper means for preventing entities

from acting unconstitutionally.”

(ECF No. 61, at 77 (quoting Free Enter. Fund, 561 U.S. at 491

n.2)). Reliance on Free Enterprise Fund, however, is misplaced.

The Court there held that “the dual for-cause limitations on the

removal of [certain executive branch officials] contravene the

Constitution’s separation of powers.” Free Enter. Fund, 561

U.S. at 492.

That holding did stem in part from the Take Care Clause:

the Court noted that “[i]t is [the President’s] responsibility

to take care that the laws be faithfully executed. The buck

stops with the President, in Harry Truman's famous phrase . . .

[T]he President therefore must have some ‘power of removing

those for whom he can not continue to be responsible.’” Id. at

493. In other words, the Court found unconstitutional an act of

Congress which purported to tie the president’s hands regarding

his duties under the Take Care Clause.

Under those

circumstances, the court agreed with the plaintiffs that

equitable relief was a proper remedy. That equitable relief was

to take the form of “declaratory relief sufficient to ensure

that the reporting requirements and auditing standards to which

they are subject will be enforced only by a constitutional

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agency accountable to the Executive.” Id. at 513. In other words, the court rightly held that it could issue equitable relief in the form of a declaration that certain aspects of an Act of Congress were unconstitutional, in part because of separation of powers issues stemming from the Take Care Clause.
The Court in Free Enterprise Fund was, of course, right to uphold the bedrock Constitutional Law principle that courts may utilize equitable relief to declare Acts of Congress unconstitutional. Id. at 491 n.2 (“[E]quitable relief ‘has long been recognized as the proper means for preventing entities from acting unconstitutionally’ . . . If the Government’s point is that an Appointments Clause or separation-of-powers claim should be treated differently than every other constitutional claim, it offers no reason and cites no authority why that might be so.”) In this instant case, Plaintiffs are not asking the court to 1) exercise its traditional powers of judicial review over an Act of Congress, and 2) grant equitable relief sufficient to remedy the constitutional issue. Rather, Plaintiffs are asking the court to appropriate a degree of the discretion left to the President in how to take care that the ACA is faithfully executed. Here, there is ample reason and authority why Plaintiffs’ claims should be treated differently from the type of claim brought in Free Enterprise Fund.
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Much of the authority distinguishing this case from the circumstances of Free Enterprise Fund is recent. In Citizens for Responsibility and Ethics in Washington v. Trump, 302 F.Supp.3d 127 (D.D.C. 2018) (hereinafter CREW), the court tentatively concluded that “while Johnson may prevent a court from issuing an injunction to the President concerning a discretionary duty, that case does not so clearly foreclose the declaratory judgment claim at issue here.” Id. at 140. The Fourth Circuit has been even less circumspect in its reading of Johnson, taking that case and its progeny to mean that “‘in general, “this court has no jurisdiction of a bill to enjoin the President in the performance of his official duties.”’ Int’l Refugee Assistance Project v. Trump, 857 F.3d 554, 605 (4th Cir. 2017)(en banc)(vacated as moot, 138 S. Ct. 353 (2017)) (quoting Franklin, 505 U.S. at 802-03).
Based on this guidance from the Fourth Circuit, the D.C. Circuit, and the Supreme Court, Plaintiffs’ claims for injunctive relief pursuant to the Take Care Clause will be dismissed. The only remaining question, then, is whether Plaintiffs have stated a claim for a declaratory judgment pursuant to the Take Care Clause. Assuming, arguendo, that a valid Take Care Clause cause of action exists in some form, and that a district court may, as it did in Nixon, issue a declaratory judgment against the President – neither of which
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appears firmly grounded in precedent or sound constitutional
principles – Plaintiffs have nonetheless failed to state a
claim. For this conclusion, the court need not look further
than the exact declaratory relief Plaintiffs seek; they have
asked this court to:
declare that Defendants are violating the Take Care Clause by taking executive action to: [(a)] suppress the number of individuals and families obtaining health insurance through ACA exchanges; [(b)] increase premiums for health insurance in the ACA exchanges; [(c)] diminish the availability of comprehensive, reasonably-priced health insurance for individuals and families with preexisting conditions; [(d)] discourage individuals and families from obtaining health insurance that provides the coverage that Congress, in the ACA, determined is necessary to protect American families against the physical and economic devastation that results from lesser insurance, with limits on coverage that leaves them unable to cover the costs of an accident or unexpected illness[.]
(ECF No. 44, at 144).
Plainly, none of the President’s complained-of actions are
“ministerial” in the sense developed in Johnson and Nixon. That
is, there is no “peremptory, and plainly defined[,]” Nixon, 492
F.2d at 602, course of action the President could take to
rectify the flaws that Plaintiffs perceive in his execution of
the ACA. Any judgment to the contrary by this court would
“require . . . court supervision over the performance of duty by
the executive branch.” Id. at 605. Plaintiffs’ Take Care
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Clause cause of action fails for the same reason stated by the district court in its recent decision in CREW: because judicial intervention here would impinge on the discretion that Congress has afforded to the President and entrust to the courts the “executive and political” duties of determining how to “faithfully execute” the APA. CREW, 302 F.Supp.3d at 140 (“The Supreme Court has advised that “[h]ow the President chooses to exercise the discretion Congress has granted him is not a matter for [the courts’] review”) (quoting Dalton v. Specter, 511 U.S. 462, 476 (1994)); see also, In re Border Infrastructure Envtl. Litig., 284 F.Supp.3d 1092, 1139 (S.D.Cal. 2018) (“[A] Take Care challenge in this case would essentially open the doors to an undisciplined and unguided review process for all decisions made by the Executive Department.”). Count II will be dismissed in its entirety. V. Conclusion
For the foregoing reasons, the motion to dismiss filed by Defendants will be denied in part and granted in part. A separate order will follow.
/s/ DEBORAH K. CHASANOW United States District Judge
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