Court Opinion

ID: 4549822
Source: CourtListenerOpinion
Date Created: 2020-07-21 15:00:35.363132+00
Date Added: 2024-06-11T13:01:53.443199
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 20, 2020                  Decided July 17, 2020

                        No. 19-5212

 ASSOCIATION FOR COMMUNITY AFFILIATED PLANS, ET AL.,
                    APPELLANTS

                              v.

  UNITED STATES DEPARTMENT OF THE TREASURY, ET AL.,
                     APPELLEES

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:18-cv-02133)

    Charles A. Rothfeld argued the cause for appellants. With
him on the briefs was Andrew J. Pincus.

    Douglas N. Letter, General Counsel, U.S. House of
Representatives, Todd B. Tatelman, Deputy General Counsel,
Megan Barbero, Associate General Counsel, Adam A. Grogg,
Assistant General Counsel, Elizabeth B. Wydra, Brianne J.
Gorod, and Ashwin P. Phatak were on the brief for amicus
curiae U.S. House of Representatives in support of appellants.

   Chad I. Golder was on the brief for amici curiae American
Medical Association, et al. in support of appellants.
                              2
    Kelly Bagby and Dara S. Smith were on the brief for amici
curiae AARP, et al. in support of appellants.

    Joseph R. Palmore and James Sigel were on the brief for
amici curiae National American Cancer Society, et al. in
support of plaintiffs-appellants.

    Daniel Winik, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief was Alisa
B. Klein, Attorney.

    Robert Alt and Ilya Shapiro were on the brief for amici
curiae The Buckeye Institute, et al. in support of defendants-
appellees.

    Monica Derbes Gibson was on the brief for amicus curiae
Louisiana Commissioner of Insurance James J. Donelon in
support of appellees and in support of affirmance.

     Lawrence G. Wasden, Attorney General, Office of the
Attorney General for the State of Idaho, Brian Kane, Assistant
Chief Deputy, Megan A. Larrondo, Deputy Attorney General,
and Anthony F. Shelley were on the brief for amici curiae State
of Idaho, et al. in support of appellees and in support of
affirmance.

    Before: ROGERS, GRIFFITH, and KATSAS, Circuit Judges.

    Opinion for the Court filed by Circuit Judge GRIFFITH.

    Dissenting opinion filed by Circuit Judge ROGERS.

    GRIFFITH, Circuit Judge: Since 1996, federal law has
exempted “short-term limited duration insurance” (STLDI)
from most federal health insurance regulations. For nearly two
                                3
decades, the Departments of Treasury, Labor, and Health and
Human Services (the “Departments”) defined STLDI as plans
with an initial contract term of less than one year. When
Congress enacted the Patient Protection and Affordable Care
Act (ACA) in 2010, it retained the STLDI exemption and left
untouched the Departments’ longstanding definition. As a
result, the ACA allowed insurers to sell STLDI plans to healthy
individuals at a discount without complying with certain of the
statute’s pricing and coverage rules. In 2016, the Departments
became concerned that STLDI plans were drawing healthy
people out of the risk pool for ACA-compliant insurance,
causing premiums to rise. So they capped the length of such
plans at three months. But over the next two years, premiums
for ACA-compliant plans continued to soar while enrollment
dropped off. The Departments reversed course with the goal of
increasing the availability of more affordable insurance. The
Association for Community Affiliated Plans (ACAP), along
with other plaintiffs, challenged this reversal. The district court
granted the Departments summary judgment, and we affirm.

                                 I

                                A

    Congress first carved out an exception for STLDI in the
Health Insurance Portability and Accountability Act of 1996
(HIPAA), Pub. L. No. 104-191, § 102(a), 110 Stat. 1936, 1973
(codified at 42 U.S.C. § 300gg-91(b)(5)). By defining
“individual health insurance coverage” to “[ex]clude short-
term limited duration insurance,” Congress exempted STLDI
plans from many of HIPAA’s standards. Id. Congress
delegated the task of defining STLDI to the Departments. See
42 U.S.C. § 300gg-92 (permitting the Departments to
“promulgate such regulations as may be necessary or
appropriate to carry out the provisions of this subchapter”). In
                               4
1997, the Departments defined STLDI as coverage that expires
“within 12 months of the date the contract becomes effective,”
subject to renewal with the insurer’s consent. Interim Rules for
Health Insurance Portability for Group Health Plans, 62 Fed.
Reg. 16,894, 16,958 (Apr. 8, 1997). Seven years later, the
Departments reaffirmed that definition in a final rulemaking.
See Final Regulations for Health Coverage Portability for
Group Health Plans and Group Health Insurance Issuers Under
HIPAA Titles I & IV, 69 Fed. Reg. 78,720, 78,748 (Dec. 30,
2004).

     When Congress enacted the ACA in 2010 to “expand
coverage in the individual health insurance market,” King v.
Burwell, 135 S. Ct. 2480, 2485 (2015), it incorporated by cross-
reference HIPAA’s definition of “individual health insurance
coverage,” including its exclusion of STLDI, see Pub. L. No.
111-148, § 1551, 124 Stat. 119, 258 (2010). As a result, STLDI
policies were not subject to many of the ACA’s key reforms,
which applied only to “individual health insurance coverage.”

     Those key reforms included a combination of carrots and
sticks that encouraged consumers to purchase more
comprehensive coverage and ensured that they had the
financial means to do so. The ACA’s “guaranteed issue” and
“community rating” provisions prohibited insurers from
denying coverage or charging higher premiums based on an
individual’s race, gender, or health status. See 42 U.S.C.
§§ 300gg, 300gg-1(a). Recognizing that these provisions could
cause premiums to skyrocket by drawing older and sicker
Americans into the risk pool, Congress required everyone to
purchase “minimum essential coverage,” or else pay a tax
penalty. 26 U.S.C. § 5000A. Congress hoped that this
“individual mandate” would induce young, healthy people to
enter the market. However, Congress appreciated that
comprehensive insurance might be too expensive for some, so
                                5
it exempted low-income individuals from the penalty, id.
§ 5000A(e)(1), (5), and provided tax-credit subsidies to those
purchasing insurance through government-run “Exchanges,”
id. § 36B. Finally, Congress required that all plans offered on
the Exchanges provide “essential health benefits,” including
emergency services, prenatal care, and prescription drug
coverage. 42 U.S.C. §§ 18021(a)(1)(B), 18022(b)(1),
18031(d)(2)(B)(i).

     More than 85% of those purchasing insurance on the
Exchanges do so using federal tax credits. See King, 135 S. Ct.
at 2493; Wu Decl. ¶ 6, J.A. 91. These credits effectively cap
the amount of money a person can expect to pay toward her
insurance. For example, a single person whose income is equal
to the poverty line will receive a subsidy sufficient to allow her
to purchase insurance for no more than 2% of her income. See
26 U.S.C. § 36B(b)(3)(A)(i). If insurance prices go up,
subsidies do too. As a result, subsidized individuals are largely
insulated from ballooning premiums.

     Because the ACA directed the states to expand their
Medicaid coverage, Congress assumed that those below the
federal poverty line would be covered and did not make them
eligible for federal subsidies. But after NFIB v. Sebelius, 567
U.S. 519 (2012), held that the ACA’s Medicaid expansion must
be deemed optional to be constitutional, 2.3 million Americans
were left unable to afford insurance in states that declined to
expand their Medicaid programs, resulting in what’s now
called the Medicaid coverage gap. See Kaiser Family
Foundation, The Coverage Gap: Uninsured Poor Adults in
States that Do Not Expand Medicaid (Jan. 14, 2020),
https://www.kff.org/medicaid/issue-brief/the-coverage-gap-
uninsured-poor-adults-in-states-that-do-not-expand-medicaid.
                                6
     When the Exchanges opened in 2014 and premiums
started to rise, consumers seeking cheaper insurance turned to
STLDI policies. These policies can be purchased at a fraction
of the cost because they are exempt from the ACA’s
community-rating, guaranteed-issue, and essential-health-
benefits requirements. But you get what you pay for. STLDI
plans offer skimpier coverage and higher deductibles. They
often expose consumers with undiagnosed preexisting
conditions to the risk of cancellation. And because they don’t
qualify as “minimum essential coverage,” they don’t satisfy the
individual mandate, meaning that those insured under STLDI
plans may be subject to the tax penalty. * Still, for those in the
Medicaid coverage gap or otherwise unable to afford an ACA-
compliant plan, a barebones STLDI policy is better than
nothing.

     In 2016, the Departments became concerned that these
policies were drawing healthy Americans out of the risk pool
for ACA-compliant insurance, causing premiums to rise. To
discourage people from purchasing STLDI policies as their
primary insurance, the Departments revised the definition of
STLDI to cover only plans that expired “less than 3 months
after the original effective date of the contract.” Excepted
Benefits; Lifetime and Annual Limits; and Short-Term,
Limited-Duration Insurance, 81 Fed. Reg. 75,316, 73,326 (Oct.
31, 2016). By capping STLDI plans at three months and
prohibiting renewals, the Departments hoped to minimize the
use of STLDI as a “primary form of health coverage,” reducing
“adverse[] impact[s] [on] the risk pool for Affordable Care
Act-compliant coverage.” Id. at 75,317-18. Although some
commenters pointed out that the rule wouldn’t prevent insurers

*
  The penalty now has no bite, because Congress reduced it to $0,
effective January 1, 2019. See Tax Cuts and Jobs Act of 2017, Pub.
L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (2017).
                              7
from stringing together four three-month-long STLDI policies
to create year-round coverage, the Departments decided that a
prohibition on such bundling would be too difficult to enforce.
Id. at 75,318. Thus, even under the 2016 Rule, insurers could—
and did—market STLDI policies in year-round blocks.

     Despite the Departments’ efforts, premiums in the
individual health insurance market continued to soar. Between
2016 and 2017, average premiums shot up 21%, while
Exchange enrollment of unsubsidized adults fell by almost the
same percentage (1.3 million in total). Short-Term, Limited-
Duration Insurance, 83 Fed. Reg. 38,212, 38,214 (Aug. 3,
2018). Acknowledging the burdens that these rising premiums
created, the Department of Health and Human Services sought
comments on how to expand affordable coverage options. Id.
at 38,213. Several commenters suggested revitalizing the
STLDI market. Id.

     In 2018, the Departments proposed returning to the
original definition of STLDI. Short-Term, Limited-Duration
Insurance, 83 Fed. Reg. 7,437, 7,446 (Feb. 21, 2018).
Following a comment period, the Departments issued a final
rule defining STLDI as coverage with an initial contract term
of less than one year and a maximum duration of three years
counting renewals. 83 Fed. Reg. at 38,243. The Departments
also expanded disclosure requirements, directing insurers to
include a disclaimer that STLDI policies may “exclu[de] . . .
coverage of preexisting conditions,” may not provide certain
“health benefits,” and may not trigger a special enrollment
period if coverage expires mid-year. Id.

     Two main reasons were given for the new rule: (1)
increasing access to affordable health insurance, especially
among the uninsured, and (2) increasing consumer choice. The
Departments explained that although the 2016 Rule “was
                                8
intended to boost enrollment in individual health insurance
coverage . . . , it did not succeed in that regard,” so “expansion
of additional coverage options . . . [was] necessary.” Id. at
38,214. They reasoned that the new rule would “expand[]
access to additional, more affordable coverage options for
individuals, including those who might otherwise be uninsured,
as well as to those who do not qualify for [premium tax
credits],” such as those in the Medicaid coverage gap. Id. at
38,216. The Departments acknowledged that expanding the
availability of STLDI “could have an impact on the risk pools
for individual health insurance coverage[] and could therefore
raise premiums.” Id. at 38,217. However, they predicted that
this effect would be modest, as subsidized enrollees were
shielded from the effect of rising premiums. Moreover, because
subsidies were available only on the Exchanges and “the
individual subsidized premium [was] so low,” they anticipated
that most “healthy lower-income individuals [would] remain in
[their ACA-compliant] plans.” Id. at 38,235-36.

     The Departments estimated that approximately 100,000
uninsured people would enroll in STLDI plans in 2019 and
approximately 500,000 people would swap their ACA-
compliant plans for STLDI plans, producing a 1% increase in
unsubsidized premiums. Id. at 38,236. By 2028, the
Departments projected that 200,000 previously uninsured
individuals would enroll in STLDI plans, and 1.3 million
individuals would shift from ACA-compliant plans to STLDI
plans. Id. This would lead to a 5% increase in unsubsidized
premiums. Id. The Congressional Budget Office and the Urban
Institute both projected that the share of new STLDI enrollees
who were previously uninsured would be somewhat higher
(35% and 40% respectively). See id. at 38,237-38.
                               9

                               B

     ACAP challenged the STLDI Rule, alleging that it was
contrary to law and arbitrary and capricious. The district court
held that ACAP had competitor standing because its
members—private insurers selling plans on government
Exchanges—faced growing competition from the STLDI
market. On the merits, the district court granted the
Departments’ motion for summary judgment, holding that the
STLDI Rule was a reasonable interpretation of HIPAA and the
ACA and that the change from the 2016 Rule to the current
STLDI Rule was not arbitrary and capricious. “We review the
district court’s grant of summary judgment de novo,” applying
the familiar standards of the Administrative Procedure Act.
Alpharma, Inc. v. Leavitt, 460 F.3d 1, 6 (D.C. Cir. 2006).

                               II

     ACAP argues that the STLDI Rule is contrary to law
because it is inconsistent with HIPAA’s plain text and an
unreasonable interpretation of that text in light of the ACA’s
structure and purpose. We are not persuaded.

                               A

     Recall that the phrase “short-term limited duration
insurance” does not appear in the ACA. Instead, the ACA
incorporates by cross-reference HIPAA’s definition of
“individual health insurance coverage,” which in turn is
defined to exclude “short-term limited duration insurance.” See
Pub. L. No. 111-148, § 1551, 124 Stat. at 258; 42 U.S.C.
§ 300gg-91(b)(5). ACAP argues that the Departments’
definition of STLDI is inconsistent with the text. We evaluate
that definition under Chevron USA, Inc. v. Natural Resources
                              10
Defense Council, Inc., 467 U.S. 837, 842-43 (1984). Because
the phrase “short-term limited duration insurance” is
ambiguous, we defer to the Departments’ interpretation so long
as it is “based on a permissible construction of” HIPAA and the
ACA. Id. at 843. It is.

                              1

    ACAP argues that the Departments’ definition involves an
unreasonable interpretation of “short-term” for two reasons.

     First, ACAP argues that the ACA’s definition of “short
coverage gaps” restricts the Departments’ discretion to define
“short-term” as used in HIPAA and incorporated by cross-
reference into the ACA. Noting that the ACA exempts from the
individual mandate persons who experience “short coverage
gaps” of “less than 3 months,” 26 U.S.C. § 5000A(e)(4)(A),
ACAP maintains that “Congress presumptively intended [the
ACA’s] definition of short—as meaning a period of less than 3
months—to apply to the interpretation of . . . [HIPAA’s]
phrase short-term coverage.” ACAP Br. 54 (internal quotation
marks omitted). In other words, whatever “short-term”
originally meant under HIPAA, it must now mean three
months.

     We cannot agree that Congress intended to amend HIPAA,
a statute written over a decade before the ACA, in such a
roundabout way. “[W]e will not understand Congress to have
amended [a prior] act by implication unless there is a positive
repugnancy between the provisions of the preexisting and
newly enacted statutes, as well as language manifesting
Congress’s considered determination of the ostensible
change.” U.S. Ass’n of Reptile Keepers, Inc. v. Zinke, 852 F.3d
1131, 1141 (D.C. Cir. 2017) (internal quotation marks
omitted). Congress knows how to impose time limits—after all,
                               11
it defined “short coverage gaps” as “less than 3 months”—but
it didn’t do so for STLDI plans.

     Second, ACAP responds that even if the ACA doesn’t
limit “short-term” insurance to three months, the Departments’
definition still contradicts the plain text of HIPAA. “Short-
term” means “occurring over or involving a relatively short
period of time.” Short-Term, WEBSTER’S THIRD NEW
INTERNATIONAL DICTIONARY 2103 (1981). As ACAP sees it,
an STLDI policy must be “meaningfully shorter than the
standard annual insurance term,” and a 364-day policy is not
“meaningfully shorter” than a 365-day one. ACAP Br. 51.

      But there is nothing unreasonable about the Departments’
definition. Consider, for example, how federal tax law defines
capital gains. A “short-term capital gain” is a gain derived from
an investment held for less than one year. 26 U.S.C. § 1222(1).
A “long-term capital gain” is a gain derived from an investment
held for one year or more. Id. § 1222(3). A 364-day investment
is not “meaningfully shorter” than a 365-day one, yet the gains
from each investment fall into different categories. So too here,
it’s perfectly reasonable to describe a 364-day policy as “short-
term,” even if a 365-day policy would not be.

     ACAP would impose an artificial limitation on the
Departments’ discretion by requiring STLDI policies to be not
just “shorter” than the standard term but “meaningfully” so.
This limitation finds no support in the text and strikes us as
unworkable. Can the Departments cap STLDI plans at nine
months? Ten months? Eleven months? Without further
guidance from Congress, we will not place amorphous
restrictions on the Departments’ authority to define such an
open-ended term. It suffices to say that the Departments have
the discretion to define STLDI to include policies shorter than
the standard policy term.
                               12

                               2

     ACAP next argues that the Departments’ definition is not
properly confined to “limited duration” plans. It would seem
that a plan that cannot be renewed beyond three years is, quite
literally, “limited” in “duration.” Nevertheless, in an effort to
evade the phrase’s ordinary meaning, ACAP suggests that
“limited duration” actually means “nonrenewable.” ACAP Br.
56. One of HIPAA’s central reforms was to guarantee
renewability of most “individual health insurance coverage.”
42 U.S.C. § 300gg-42(a). STLDI plans are exempt from that
guarantee because they are exempt from HIPAA’s definition of
“individual health insurance coverage.” Id. § 300gg-91(b)(5).
From this lack of a guarantee of renewability, ACAP infers a
prohibition. But nothing in HIPAA prevents insurers from
renewing expired STLDI policies. Indeed, from 1997 to 2016,
renewals were allowed with the insurer’s consent.

     ACAP responds that if “limited duration” does not mean
“nonrenewable,” then it’s redundant of “short term.” Not so.
Under the Departments’ definition, “short-term” refers to the
initial contract term, while “limited duration” refers to the
policy’s total length, including renewals. This reasonable
reading gives independent meaning to each term.

     In any event, the Departments didn’t pick the three-year
limitation out of a hat. They matched the duration of STLDI
policies to that of similar types of temporary insurance, such as
COBRA. See 83 Fed. Reg. at 38,221 (noting that COBRA
“requires certain group health plan sponsors to provide a
temporary continuation coverage option for a minimum of 18,
29, or 36 months”); see also id. (explaining that the Federal
Employees Health Benefits Program permits temporary
continuation of coverage for up to three years). Congress
                              13
granted the Departments wide latitude to define STLDI, and
while the Departments retain the flexibility to narrow their
definition in the future, nothing in the text forecloses their
current interpretation.

                               B

     ACAP next argues that the STLDI Rule is “irreconcilable
with the structure and policy of the ACA,” ACAP Br. 25, and
will ravage the government Exchanges. We disagree.

                               1

     ACAP’s core contention is that the STLDI Rule
contravenes the spirit of the ACA. ACAP contends that
“Congress’s plan was to create a single, ACA-compliant
individual market.” ACAP Br. 42 (emphasis added). ACAP
says that the STLDI Rule is unreasonable because it facilitates
the development of a parallel, “shadow” market for plans that
do not provide comprehensive coverage. ACAP Reply 3. But
the exception for STLDI is baked into the statute itself. By its
own terms, the ACA exempts STLDI plans from the provisions
requiring insurers to provide certain benefits, see 42 U.S.C.
§§ 18021(a)(1)(B), 18022(b)(1), 18031(d)(2)(B)(i), and to treat
all purchasers as members of a single risk pool, see id.
§ 18032(c). Contrary to ACAP’s portrayal, the Departments
did not fashion a new category of insurance out of whole cloth
to evade the ACA’s restrictions; they simply crafted rules to
clarify which policies fall within the exception Congress
created.

     And the Departments reasonably defined the contours of
that exception. On the day that Congress enacted the ACA,
HIPAA had excluded “short-term limited duration insurance”
from the definition of “individual health insurance coverage”
                              14
for over a decade. And for all that time, the Departments had
defined the term almost exactly as they do today. That is
powerful evidence that the modern STLDI Rule is consistent
with the ACA. After all, “[w]here Congress ‘adopts a new law
incorporating sections of a prior law, Congress normally can
be presumed to have had knowledge of the interpretation given
to the incorporated law, at least insofar as it affects the new
statute.’” Gordon v. U.S. Capitol Police, 778 F.3d 158, 165
(D.C. Cir. 2015) (quoting Lorillard v. Pons, 434 U.S. 575, 581
(1978)).

    ACAP argues that there’s “no evidence that Congress was
even aware of the Departments’ interpretation . . . when it
enacted the ACA.” ACAP Br. 48. But if there were ever
“reason to assume[] congressional familiarity with the
administrative interpretation at issue,” Public Citizen, Inc. v.
HHS, 332 F.3d 654, 669 (D.C. Cir. 2003), it is here, where
“[d]espite the ACA’s sweeping reforms,” Congress “left intact
and incorporated” the STLDI exception, Central United Life
Insurance Co. v. Burwell, 827 F.3d 70, 72 (D.C. Cir. 2016).

     ACAP objects that Congress would’ve spoken more
clearly had it intended to empower the Departments to permit
the sale of a primary insurance product outside of the ACA-
compliant marketplace. Riffing on Justice Scalia, ACAP
accuses the Departments of trying to squeeze a “regulatory
elephant” into a “statutory mousehole.” ACAP Br. 40 n.15
(citing Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457,
468 (2001)). But a legislative provision authorizing the
Departments to define an entire category of insurance not
subject to ordinary federal standards is no “mousehole.” And a
regulation that has only modest effects on the government
Exchanges is no “elephant.”
                                 15
     Nevertheless, ACAP insists that Congress likely did not
expect insurance companies to market STLDI as primary
insurance. Instead, ACAP says, Congress must have assumed
that STLDI would be sold as temporary coverage that did not
compete with ACA-compliant plans. The dissent goes further,
suggesting that Congress “decided not to allow consumers to
purchase plans offering less than minimum ‘essential health
benefits’ as their primary form of coverage.” Dissent at 6
(emphasis added). The problem with this argument is that
Congress expressly elected not to set up a Hobson’s choice
between purchasing ACA-compliant insurance and forgoing
coverage altogether. Cf. 42 U.S.C. § 18032(d)(3)(A) (“Nothing
in this title shall be construed to restrict the choice of a qualified
individual to enroll or not to enroll in a qualified health plan or
to participate in an Exchange.” (footnote omitted)). To be sure,
Congress hoped that most individuals would purchase ACA-
compliant plans as their primary insurance, and it provided
incentives to encourage them to do so. It increased the
availability of such plans through the community-rating and
guaranteed-issue provisions, provided subsidies to low-income
adults, and imposed a penalty on those who failed to maintain
“minimum essential coverage.” But it did not foreclose other
options.

     For example, in addition to STLDI, Congress left in place
exceptions for “fixed indemnity” insurance, which pays out a
set amount for predetermined events such as hospitalization.
Id. § 300gg-91(c)(3)(B). As with STLDI, “many individuals
found it cost-effective to forego minimum essential coverage
(even despite the penalty) in favor of these fixed indemnity
policies.” Central United Life Insurance, 827 F.3d at 72. As we
have previously acknowledged, the ACA permits that choice,
id. at 72-75, even as it nudges individuals toward choosing
more comprehensive insurance. ACAP sees these alternative
options as loopholes that the Departments should have closed,
                               16
but the Departments need not rewrite the law to fit ACAP’s
preferences.

     ACAP frames the ACA as relentlessly pursuing one goal:
maximizing the number of individuals with comprehensive
health insurance. But “no legislation pursues its purposes at all
costs.” See Albany Eng’g Corp. v. FERC, 548 F.3d 1071, 1076
(D.C. Cir. 2008) (quoting Rodriguez v. United States, 480 U.S.
522, 525-26 (1987)). And like most statutes, the ACA pursues
multiple competing missions, among them expanding
coverage, decreasing premiums, and maximizing quality. The
STLDI Rule reasonably balances those goals by expanding
coverage to the uninsured, including those in the Medicaid
coverage gap, at the expense of higher unsubsidized premiums
for comprehensive insurance. Balancing the costs and benefits
of expanding the length of STLDI policies is the Departments’
bailiwick. And whatever choice we might have made in their
shoes, we cannot substitute our judgment for theirs.

                               2

     ACAP next objects that the Departments cannot adopt an
interpretation of STLDI that would lay waste to one of the
ACA’s key reforms: the Exchanges. Although we agree that
the Departments may not adopt a definition of STLDI that
“would destabilize the individual insurance market . . . and
likely create the very ‘death spirals’ that Congress designed the
Act to avoid,” King, 135 S. Ct. at 2493, the Departments
reasonably predicted that the Rule’s impacts on Exchange
enrollment and premiums would be limited. And experience
has borne out that prediction.

     We defer to “reasonable agency prediction[s] about the
future impact of [the agency’s] own regulatory policies.” La.
Energy & Power Auth. v. FERC, 141 F.3d 364, 370 (D.C. Cir.
                               17
1998). Here, the Departments reasonably concluded that the
Rule’s potential effects on premiums would be relatively small.
Compare 38 Fed. Reg. at 38,236-38 (predicting a 5% increase),
with King, 135 S. Ct. at 2493 (predicting as much as a 47%
increase). And the Departments reasonably predicted that the
Rule’s potential effects on Exchange enrollment would be
blunted by federal subsidies. The vast majority of individuals
purchasing plans on the Exchanges receive subsidies and are
thus “largely insulated from premium increases.” 83 Fed. Reg.
at 38,213. Because subsidies “are available only for [ACA-
compliant] plans offered on [the] Exchanges” and the out-of-
pocket cost to subsidized individuals is “so low,” the
Departments anticipated that most “lower-income individuals
[would] remain in [their ACA-compliant] plans.” Id. at 38,235-
36.

     This prediction was shared by the Congressional Budget
Office and several nongovernmental organizations, including
opponents of the STLDI Rule. See id. at 38,325-28. As even a
report commissioned by ACAP acknowledged, “the concept of
a death spiral . . . is less applicable” to the Exchanges because
the subsidies soak up premium increases. See Wakely
Consulting Group, Effects of Short-Term Limited Duration
Plans on the ACA-Compliant Individual Market 3,
http://www.communityplans.net/wp-content/uploads/2018/04/
Wakely-Short-Term-Limited-Duration-Plans-Report.pdf; see
also ACAP Comment at 5, J.A. 393 (citing this report).

     Experience confirms these predictions were reasonable.
Following the promulgation of the STLDI Rule, premiums for
benchmark Exchange plans actually fell by 1.5% in 2019. See
Wu Decl. ¶ 18, J.A. 94-95. And in 2020, premiums for those
same benchmark plans dropped another 4%. See Press Release,
Centers for Medicare & Medicaid Services (Oct. 22, 2019),
https://www.cms.gov/newsroom/press-releases/premiums-
                              18
healthcaregov-plans-are-down-4-percent-remain-unaffordable
-non-subsidized-consumers. Similarly, participation in the
Exchanges was not obviously correlated with the new Rule.
Indeed, enrollment went up in some states that permitted the
sale of year-long STLDI policies and down in others that
restricted its sale to shorter time periods. See Wu Decl.
¶¶ 21-22, J.A. 95-96. Because the Departments reasonably
(and, as it turns out, correctly) predicted that the STLDI Rule
would not result in a premium-driven mass exit from the
Exchanges, we reject ACAP’s argument that the Rule is invalid
based on speculation about its potential, unrealized effects.

                              III

    Finally, ACAP argues that the STLDI Rule is arbitrary and
capricious. Once again, we disagree.

     First, ACAP says that the Departments failed to consider
the impact of the STLDI Rule on the Exchanges and relied on
factors that Congress had not intended them to consider. But
the Departments expressly acknowledged that expanding the
length of STLDI plans “could have an impact on the
[Exchange] risk pools” and “could therefore raise premiums.”
83 Fed. Reg. at 38,217. They concluded, however, that such an
impact would be relatively minor and that the need to expand
affordable coverage options, especially for those who could not
afford ACA-complaint insurance, “substantially outweigh[ed]”
that impact. Id. We therefore reject ACAP’s assertion that the
Departments failed to consider the Rule’s effects or acted
outside of their discretion to balance the statute’s competing
policy goals.

    Next, ACAP argues that the Departments failed to
adequately explain their departure from the 2016 Rule.
“Agencies are free to change their existing policies as long as
                                19
they provide a reasoned explanation for the change.” Encino
Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125 (2016). The
agency “need not demonstrate to a court’s satisfaction that the
reasons for the new policy are better than the reasons for the
old one.” FCC v. Fox Television Stations, Inc., 556 U.S. 502,
515 (2009). “[I]t suffices that the new policy is permissible
under the statute, that there are good reasons for it, and that the
agency believes it to be better . . . .” Id.

     The Departments amply met this obligation. As the
Departments explained, the 2016 Rule “did not succeed” in
“boost[ing] enrollment in individual health insurance
coverage.” 83 Fed. Reg. at 38,214. Instead, average monthly
enrollment dropped by 10%, and average monthly premiums
increased by 21% from 2016 to 2017. Id. Acknowledging that
expanding the availability of STLDI plans would draw some
individuals out of comprehensive plans into skimpier STLDI
plans, see id. at 38,236, the Departments reasoned that the
change would be beneficial because it would “reduce the
fraction of the population that is uninsured,” id. at 38,228.
Especially given the advent of the Medicaid coverage gap, it
was reasonable for the Departments to strive to create cheaper
coverage options for those who might otherwise go uninsured.

     Last, ACAP argues that the STLDI Rule could produce
coverage gaps for consumers whose STLDI policies expire
mid-year. Adults who lose their ACA-compliant coverage
qualify for a special enrollment period. 45 C.F.R. § 155.420.
But a person who loses STLDI coverage typically must wait
until the next open enrollment period to obtain ACA-compliant
coverage on the Exchanges.

     The Departments reasoned that the 2016 Rule exacerbated
the coverage-gap problem because three-month STLDI plans
were often not long enough to tide people over to the next open
                              20
enrollment period. See 83 Fed. Reg. at 38,217. For example, an
individual who lost coverage in February and was not entitled
to a special enrollment period would have to wait until
November to enroll. Allowing STLDI policies to run for just
under one year ensures that individuals can always purchase a
policy to fit their need for temporary coverage.

     ACAP responds that as long as individuals only use
STLDI to bridge gaps between two ACA-compliant policies,
there need never be a coverage-gap issue under the 2016 Rule.
But the reality is that even under the 2016 Rule, many
individuals were purchasing STLDI as their primary insurance.
For those people, the 2016 Rule created more volatility because
they could be “subject to re-underwriting” every three months,
could see a “greatly increased” premium, could be denied a
new policy “based on preexisting medical conditions,” and
“would not get credit” toward any deductible on a new plan
“for money spent toward the deductible during the previous 3
months.” 83 Fed. Reg. at 38,218. Finally, to ensure that persons
considering purchasing an STLDI policy in lieu of an ACA-
compliant one would be aware of the risk of coverage gaps, the
Departments required insurers to include a disclaimer that the
loss of STLDI coverage may not trigger a special enrollment
period. Id. at 38,243. Under our deferential standard of review,
that is sufficient to respond to commenters’ concerns.

                              IV

     The dissent would invalidate the STLDI Rule as
“inconsistent with the [ACA’s] statutory scheme.” Dissent at
6. But the dissent never says what that scheme requires. The
dissent acknowledges that Congress expressly exempted
STLDI policies from the statute’s requirements, leaving in
place the Departments’ longstanding regulatory definition. Id.
at 3. The dissent does not suggest that the ACA required the
                               21
Departments to initiate a rulemaking to change that definition.
Nor does the dissent adopt ACAP’s more extreme textual
argument that the ACA required the Departments to cap STLDI
policies at three months. And while the dissent presumably
would not have taken issue with the 2016 Rule, that rule also
did not prevent individuals from purchasing STLDI plans as
their primary coverage. 81 Fed. Reg. at 75,318.

     Boiled down, the dissent’s objection to the STLDI Rule is
a prudential one—STLDI plans aren’t good for consumers, so
they should be restricted as much as possible. But so long as
the Departments have acted within the bounds of their
statutorily delegated authority, that policy judgment is theirs to
make. When Congress delegates decisionmaking authority to
an agency, it sacrifices control for flexibility. Delegation
empowers a comparatively nimbler actor to respond to changed
circumstances and unanticipated consequences. Sometimes
(perhaps often), the agency will have to make policy tradeoffs
in real-world settings that Congress did not imagine. That is
exactly what happened here. In 2016, the Departments changed
the definition of STLDI to respond to concerns about
increasing premiums and decreasing enrollment. Two years
later, confronted by still-increasing premiums and the
Medicaid coverage gap, the Departments decided that
expanding affordable coverage options was the way to go. If
Congress disagrees with that decision, it can take back the
reins. Or if a new Administration comes to power with a
different vision of how the ACA’s competing policy goals
should be balanced, it can revisit the Departments’ choice. But
as judges, our role is narrow: to ensure only that the
Departments reasonably exercised the policymaking authority
granted to them and not to us. Because the Departments
satisfied that constraint, we leave the STLDI Rule in place.
                             22
                             V

     Having concluded that the STLDI Rule is neither contrary
to law nor arbitrary and capricious, we affirm.

                                                 So ordered.
     ROGERS, Circuit Judge, dissenting: Today the court
upholds a Rule defining “short-term limited duration
insurance” (“STLDI”) to include plans that last for up to three
years and function as their purchasers’ primary form of health
insurance, in stark contrast to the gap-filling purpose for which
such plans were created. Because STLDI plans are exempt
from the requirements of the Patient Protection and Affordable
Care Act (“ACA”), insurers offering them can cut costs by
denying basic benefits, price discriminating based on age and
health status, and refusing coverage to older individuals and
those with preexisting conditions. As a result, they leave
enrollees without benefits that Congress deemed essential and
disproportionately draw young, healthy individuals out of the
“single risk pool” that Congress deemed critical to the success
of the ACA’s statutory scheme. 42 U.S.C. § 18032(c)(1). The
Supreme Court has instructed courts to interpret the ACA’s
provisions in a manner “consistent with . . . Congress’s plan.”
King v. Burwell, 135 S. Ct. 2480, 2496 (2015). Because the
Rule flies in the face of that plan by expanding a narrow
statutory exemption beyond recognition to create an alternative
market for primary health insurance that is exempt from the
ACA’s comprehensive coverage and fair access requirements,
I respectfully dissent.

                               I.

     The ACA is a comprehensive statutory scheme that
Congress enacted to address certain problems that had existed
for decades in the health insurance market. See King, 135 S.
Ct. at 2485. First, insurers competed for consumers by selling
low-cost but skimpy plans that offered less than comprehensive
coverage. For example, before the ACA, 75% of non-group
health plans did not cover delivery and inpatient maternity care,
38% did not cover mental health services, and nearly 20%
limited their coverage of prescription drugs. Amicus Br. of
Am. Med. Ass’n et al. 13. Second, insurers further competed
on price by denying coverage to individuals who were likely to
                              2
incur greater medical expenses, particularly those with
preexisting medical conditions, or charging such individuals
higher rates. Amicus Br. of Nat’l Am. Cancer Soc’y et al. 17.
This practice disproportionately affected older people and
women; the prevalence of preexisting conditions increases with
age, id., and before the ACA, insurers routinely denied
coverage on the basis of such preexisting conditions as
pregnancy, a previous Cesarean section, or a history of
surviving domestic abuse, Amicus Br. of U.S. House of
Representatives 7. Additionally, in a practice known as age
rating, insurers frequently charged higher premiums based
solely on an individual’s age, sometimes by as much as eleven
times the rates they charged younger people. Amicus Br. of
AARP et al. 13.

     The ACA addressed these problems through a particular
“series of interlocking reforms” designed to promote fair
access to comprehensive, affordable coverage. King, 135 S.
Ct. at 2485. As to fair access, the ACA’s central provisions
include “guaranteed issue” and “community rating”
requirements, which mandate that insurers accept everyone
who applies for coverage and limit price discrimination,
respectively. 42 U.S.C. §§ 300gg(a)(1), 300gg-1(a). For
example, insurers may not take preexisting conditions or
gender into consideration when setting premiums, and age
rating may not exceed a factor of three to one. Id. §§
300gg(a)(1)(A)(iii), (a)(1)(B). As to comprehensive coverage,
Congress required all individual plans to provide “essential
health benefits,” id. § 300gg-6(a), including preventive care,
prescription drugs, maternity and newborn care, mental health
services, emergency services, and hospitalization, id. §
18022(b)(1). As to affordability, Congress offered tax credits
to qualifying individuals. 26 U.S.C. § 36B. Further, Congress
understood from failed healthcare reform efforts at the state
level that guaranteed issue and community rating requirements
                              3
have the unintended consequence of encouraging adverse
selection. King, 135 S. Ct. 2485–86. That is, when insurers
are required to accept anyone who applies for coverage and to
charge the same premiums regardless of health status,
consumers have an incentive to wait to purchase insurance until
they become ill, which drives premiums higher. Id. To
“minimize this adverse selection and broaden the health
insurance risk pool to include healthy individuals, which will
lower health insurance premiums,” 42 U.S.C. § 18091(2)(I),
Congress required most people to maintain “minimum
essential coverage,” 26 U.S.C. § 5000A(a), and required
insurers to consider all enrollees in the individual market “to
be members of a single risk pool,” 42 U.S.C. § 18032(c)(1).

     Congress provided for certain limited exemptions from the
ACA’s requirements, including the exemption of “short-term
limited duration insurance.” Id. § 300gg-91(b)(5). As the
Departments of Treasury, Labor, and Health and Human
Services (“Departments”) acknowledged in the preamble to the
challenged Rule, STLDI was a well-understood insurance
product that existed before the ACA and “was primarily
designed to fill temporary gaps in coverage that may occur
when an individual is transitioning from one plan or coverage
to another plan or coverage.” Short-Term, Limited-Duration
Insurance, 83 Fed. Reg. 38,212, 38,213 (Aug. 3, 2018) (“2018
Final Rule”); see also Excepted Benefits; Lifetime and Annual
Limits; and Short-Term, Limited-Duration Insurance, 81 Fed.
Reg. 75,316, 75,317 (Oct. 31, 2016) (“2016 Final Rule”). As
the product’s name suggests, STLDI never was intended as a
long-term form of primary insurance coverage. STLDI plans
therefore did not compete with ACA-compliant plans for
enrollees, because these short-term, stop-gap plans served a
different purpose than long-term coverage.
                               4
     Following the ACA’s enactment, some insurers began to
offer STLDI plans “in situations other than those that the
exception from the definition of individual health insurance
coverage was initially intended to address,” namely, as
purchasing individuals’ “primary form of health coverage.”
2016 Final Rule, 81 Fed. Reg. at 75,317. Because STLDI is
not subject to the ACA’s requirements, those who enroll in
STLDI plans may not receive “meaningful health coverage,”
and because STLDI issuers can cut costs by discriminating
based on health status, these plans may disproportionately
attract healthier individuals, “thus adversely impacting the risk
pool for Affordable Care Act-compliant coverage.” Id. at
75,317–18. To prevent the ACA from being undermined in
this manner, the Departments defined STLDI as a health
insurance plan lasting no longer than three months, taking into
account any extensions. Id. at 75,326 (amending 45 C.F.R. §
144.103).

     On January 20, 2017, the day President Trump took office,
he issued an executive order announcing his administration’s
intention “to seek the prompt repeal of the Patient Protection
and Affordable Care Act.”           Exec. Order No. 13,765,
Minimizing the Economic Burden of the Patient Protection and
Affordable Care Act Pending Repeal, 82 Fed. Reg. 8351, 8351
(Jan. 24, 2017). After failing to persuade Congress to repeal
the statute, the President issued a new executive order, which
observed that “STLDI is exempt from the onerous and
expensive insurance mandates and regulations” of the ACA
and therefore was “an appealing and affordable alternative to
government-run exchanges.”         Exec. Order No. 13,813,
Promoting Healthcare Choice and Competition Across the
United States, 82 Fed. Reg. 48,385, 48,385 (Oct. 17, 2017).
The President therefore directed the Departments to consider
proposing regulations “to expand the availability of STLDI”
within sixty days. Id. at 48,386.
                               5

     Following this directive, the Departments promulgated a
Rule designed to facilitate the use of STLDI as “an affordable
alternative” to ACA-compliant insurance. 2018 Final Rule, 83
Fed. Reg. at 38,229. The Departments acknowledged that
STLDI was a product “that was primarily designed to fill
temporary gaps in coverage that may occur when an individual
is transitioning from one plan or coverage to another plan or
coverage.” Id. at 38,213. Nevertheless, they determined that
it also should be offered as “an additional choice” to “exist[]
side-by-side with individual market coverage” that must
comply with the ACA’s requirements. Id. at 38,218. With this
objective in mind, the Departments redefined STLDI to include
any plan with an initial contract term of less than twelve
months and a total duration of no longer than thirty-six months
including renewals or extensions. Id. at 38,243 (amending 45
C.F.R. § 144.103).

                               II.

      In administering the ACA, the Departments “are bound,
not only by the ultimate purposes Congress has selected, but by
the means it has deemed appropriate, and prescribed, for the
pursuit of those purposes.” MCI Telecomms. Corp. v. Am. Tel.
& Tel. Co., 512 U.S. 218, 231 n.4 (1994). The ACA not only
sought to expand access to affordable health insurance, but it
did so in a particular manner: Congress deemed certain health
benefits essential, prohibited discrimination against individuals
with preexisting conditions, and ensured that healthier and less
healthy individuals would share a single risk pool. The
exemption from these requirements for STLDI plans addressed
a well-understood insurance product that existed at the time to
fill gaps in coverage, as the Departments have acknowledged.
2018 Final Rule, 83 Fed. Reg. at 38,213. Apparently
unsatisfied with the statutory scheme that Congress devised,
                               6
the Departments fashioned this limited exemption into an
alternative class of primary health insurance that need not
comply with the ACA’s statutory requirements. I would hold
that the Departments impermissibly defined “short-term
limited duration insurance” in a manner inconsistent with the
statutory scheme and would remand the Rule for further
proceedings consistent with the ACA’s structure. See Chevron,
U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–
43 (1984).

     The Rule departs from the ACA’s structure in several
significant ways, recreating the problems that existed in the
American health insurance market before the statute’s
enactment and that the statute was designed to solve. First, the
Rule promotes the use of STLDI plans to circumvent the
coverage requirements that Congress deemed essential. The
Departments state that the Rule “empowers consumers to
purchase the benefits they want and reduce overinsurance.”
2018 Final Rule, 83 Fed. Reg. at 38,228. But Congress
expressly decided not to allow consumers to purchase plans
offering less than minimum “essential health benefits” as their
primary form of coverage. 42 U.S.C. § 300gg-6(a). In
contravention of Congress’s judgment, 71% of recently studied
STLDI plans do not cover outpatient prescription drugs, 43%
do not cover mental health services, and none cover maternity
care. Amicus Br. of Am. Med. Ass’n et al. 17.

     Unsurprisingly, failing to provide minimum essential
benefits allows STLDI issuers to charge approximately half the
cost of an average, unsubsidized ACA-compliant plan
available through the Exchange, 2018 Final Rule, 83 Fed. Reg.
at 38,236, but at the expense of allowing consumers to gamble
on plans that may not offer adequate protection against
unforeseen medical expenses. For example, STLDI plans
generally do not cover oncology drugs for patients diagnosed
                                7
with cancer, which cost approximately $10,000 per month on
average. Amicus Br. of Am. Med. Ass’n et al. 16 n.27 (quoting
Rachel Schwab, Coming up Short: The Problem with Counting
Short-Term, Limited Duration Insurance as Coverage, CTR. ON
HEALTH INS. REFORMS, GEORGETOWN UNIV. HEALTH POLICY
INST., June 7, 2019). Yet approximately 40% of Americans
will develop cancer at some point in their lifetimes, and
needless to say, most cancer diagnoses are unexpected.
Amicus Br. of Nat’l Am. Cancer Soc’y et al. 8, 25. Further,
individuals who purchase STLDI may not realize that their
plans contain such limitations; reports indicate that STLDI
brokers often use aggressive and misleading marketing tactics,
Amicus Br. of AARP et al. 18–19, and they can advertise more
extensively than brokers of ACA-compliant plans, because
they are not subject to the ACA’s requirement that insurers
must spend at least 80% of premiums on clinical services and
quality improvements, as opposed to other costs such as
marketing, 42 U.S.C. §§ 300gg-18(a), (b)(1)(A)(ii); see
Amicus Br. of Am. Med. Ass’n et al. 27.

     Second, because STLDI plans need not comply with the
ACA’s guaranteed issue and community rating requirements,
insurers can further cut costs by discriminating based on
preexisting conditions, age, or any other factor. While this may
seem to benefit those individuals who qualify for STLDI plans,
cancellation may occur retroactively, resulting in abrupt and
unexpected loss of coverage. Amicus Br. of AARP et al. 15;
Amicus Br. of Am. Med. Ass’n et al. 22–23. For example, one
Arizona woman who enrolled in STLDI was hospitalized with
an abdominal infection a few weeks after receiving emergency
surgery for diverticulitis. Amicus Br. of Am. Med. Ass’n et al.
22. Her insurer treated the diverticulitis as a preexisting
condition and canceled her plan, leaving her with $97,000 in
medical bills. Id. at 22–23. In this respect, as in terms of their
less than comprehensive coverage, STLDI plans may “benefit
                               8
insurance companies more than the patients who purchase
them.” Id. at 27 (quoting Shelby Livingston, Short-Term
Health Plans Spend Little on Medical Care, MODERN
HEALTHCARE, Aug. 6, 2019).

      Third, not only does the use of STLDI as primary health
insurance leave enrollees without congressionally mandated
protections, but it also fractures the “single risk pool” that
Congress deemed critical to the success of the ACA. 42 U.S.C.
§ 18032(c)(1).      “The Departments acknowledge[d] that
relatively young, relatively healthy individuals in the middle-
class and upper middle-class” would be “more likely to
purchase” STLDI, which “could lead to adverse selection and
the worsening of the individual market risk pool.” 2018 Final
Rule, 83 Fed. Reg. at 38,235. As a result, the Departments
estimated that unsubsidized premiums for those who remained
in the risk pool for ACA-compliant coverage available through
the Exchanges—disproportionately, older or less healthy
individuals—would increase by 1% in 2019 and 5% in 2028.
Id. at 38,236. In other words, the Rule draws younger, healthier
consumers out of the market for ACA-compliant insurance,
with the predicted result of higher premiums for those who
remain in the risk pool. It thereby directly undermines a central
purpose of the ACA’s “major reforms,” namely to “minimize .
. . adverse selection and broaden the health insurance risk pool
to include healthy individuals, which will lower health
insurance premiums.” King, 135 S. Ct. at 2493 (alteration in
original) (quoting 42 U.S.C. § 18091(2)(I)). It is difficult to
imagine a starker conflict between a statutory scheme and a
rule that purports to administer it.

                              III.

    None of the court’s attempts to defend the Rule as
consistent with the ACA is persuasive. First, the court places
                                9
considerable weight on the similarity between the 2018 Final
Rule and a prior rule defining “short-term limited duration
insurance” that was in effect when the ACA was enacted,
suggesting that this similarity is “powerful evidence” that the
Departments’ interpretation is consistent with the statute. Op.
14. To the contrary, there was no reason for Congress to expect
that consumers would begin purchasing STLDI plans as their
primary form of health insurance, considering that when
Congress enacted the ACA, STLDI was simply a product used
to fill gaps in coverage, as the Departments have
acknowledged. See 2018 Final Rule, 83 Fed. Reg. at 38,213.

     Second, the court surmises that for individuals who
otherwise would go uninsured, “a barebones STLDI policy is
better than nothing.” Op. 6. Although the Departments
justified the Rule in part as an effort “to reduce the number of
uninsured individuals,” 2018 Final Rule, 83 Fed. Reg. at
38,218, their own data reflect that this was not the primary
anticipated effect of the Rule. Rather, the vast majority of new
enrollees in STLDI plans were expected to switch from
existing coverage. The Departments estimated that by 2028,
enrollment in STLDI plans would increase by 1.4 million,
while “the total number of people with some type of coverage”
would increase by only 0.2 million. Id. at 38,236. That is, only
approximately one in seven individuals enrolling in STLDI by
2028 otherwise would be uninsured. The central issue, then, is
not whether an STLDI plan is better than nothing, but whether
such a policy is an appropriate substitute for a plan offering the
comprehensive coverage and fair access that Congress deemed
essential. Unless Congress amends the ACA’s central
provisions or repeals the statute, that decision is not left to the
Departments or to individual consumers.

     Third, the court brushes aside the Departments’ own
estimate that the Rule would increase premiums for ACA-
                               10
compliant coverage by 5% within a decade by stating that this
predicted impact, confirmed by experience since the Rule took
effect, is “relatively small.” Op. 17. By this logic, the
Executive Branch may incrementally chip away at a statute by
promulgating rules that undermine the statutory scheme, so
long as the effect of each regulatory action is sufficiently
modest. When an agency prioritizes its own policy objectives
over those that Congress enacted, as occurred here, this court
necessarily must conclude that the agency’s action was
arbitrary and capricious. See Gresham v. Azar, 950 F.3d 93,
104 (D.C. Cir. 2020).

     In sum, “[e]ven under under Chevron’s deferential
framework, . . . reasonable statutory interpretation must
account for both ‘the specific context in which . . . language is
used’ and ‘the broader context of the statute as a whole.’” Util.
Air Regulatory Grp. v. EPA, 573 U.S. 302, 321 (2014) (third
alteration in original) (quoting Robinson v. Shell Oil Co., 519
U.S. 337, 341 (1997)). The Departments’ Rule fails to account
for the specific context in which the term “short-term limited
duration insurance” was used at the time of the ACA’s
enactment, namely to refer to a well-understood insurance
product used to fill gaps in coverage, not to serve as an
individual’s primary form of health insurance. The Rule
further fails to account for the general context of the ACA’s
scheme by undermining the particular “series of interlocking
reforms” included in the statute to ensure fair access to
comprehensive, affordable medical coverage and recreating the
same problems in the health insurance market that the ACA
was designed to solve. King, 135 S. Ct. at 2485. Accordingly,
I respectfully dissent.