Judges from the 5th US Circuit Court of Appeals will hear arguments on an Affordable Care Act case on Tuesday.
CNN  — 

The Justice Department and challengers to Obamacare’s no-cost preventive care requirements said Friday they are working on an agreement to put part of a lower court ruling that overturned some of the mandates on hold while the case is appealed.

They told the 5th Circuit US Court of Appeals, which encouraged the parties to hash out a such an agreement at a hearing Tuesday, that they had discussed a “framework” of a deal, but that they’re aiming to file more details next week.

The negotiations come after the federal appeals court wrestled in oral arguments on Tuesday with a Biden administration request that it pause US District Judge Reed O’Connor’s ruling that would wipe away an Obamacare mandate requiring certain preventive care services – including statins and some cancer screenings – to be provided at no cost.

O’Connor’s ruling, in the latest conservative legal attack against the 2010 Affordable Care Act, is on hold under an administrative stay while the appeals court considers whether it should be frozen long-term while the case’s appeal plays out.

During a 45-minute hearing before the New Orleans-based 5th Circuit, a Justice Department attorney argued that if O’Connor’s ruling were allowed to take full effect, it would cause “enormous harms” to the 150 million people whose insurance plans may be impacted if their insurers end the no-cost coverage of the services in question.

“These preventive services are meant to be gotten early so that you detect … cancer and prevent heart attacks and strokes and … all of these things,” DOJ attorney Alisa Klein said. “The reason Congress said, ‘you’ve got to cover all these services without cost sharing’ is to get people to get them in a timely fashion, so they don’t get the disease at a point where their survival rates are much lower.”

The lawyer for the businesses and individuals challenging the Affordable Care Act mandate argued that the administration is overplaying the harms that would occur if O’Connor’s ruling was not frozen for the appeal. Attorney Jonathan Mitchell – a former Texas solicitor general who was the architect of Texas’ civil enforcement six-week abortion ban – said it was not even clear that insurers would drop the no-cost coverage of the services in response to O’Connor’s ruling.

Multiple judges on the panel wondered whether the Justice Department and the plaintiffs could come to some agreement for how the court could issue an order that narrows the scope of O’Connor’s ruling, so that it would focus on how the mandates were affecting the individuals and business that brought the lawsuit.

“It would help us with whatever we may do on this, if we have the understanding that both of you have of this case – more than we can, in our exposure to it – of what is the best thing to do, if we are going to stay anything,” said Circuit Judge Leslie Southwick, an appointee of President George W. Bush. “To have your collective agreement as to what that is would be very helpful – or your collective near-agreement.”

Some no-cost preventive services struck down

O’Connor, in the March ruling at issue in the appellate proceedings, said the federal government could not enforce a portion of the Affordable Care Act’s mandate that requires insurers to provide no-cost coverage of preventive care services.

The challengers had argued that the mandates were forcing them to buy coverage for services they or their families would never want or need, as the lawsuit raised religious and moral objections for Obamacare coverage requirements for STD testing and HIV treatments.

O’Connor, who has issued anti-Obamacare rulings in major challenges to the law in the past, concluded that the US Preventive Services Task Force recommendations issued after the health reform law was enacted in March 2010 violated the Constitution’s Appointments Clause. Those recommendations include a 2019 task force recommendation that HIV-prevention pills known as PrEP treatment be covered at no-cost. O’Connor had previously ruled that the PrEP coverage mandate violated the Religious Freedom Restoration Act.

However, in a separate ruling, O’Connor upheld Obamacare requirements for certain free preventive services for children, such as autism and vision screenings and well-baby visits, and for women, such as mammograms, well-woman visits and breastfeeding support programs. The judge also upheld the mandate that provides immunizations at no charge for the flu, hepatitis, measles, shingles and chickenpox.

These services are recommended by the Health Resources and Services Administration and the Advisory Committee on Immunization Practices.

O’Connor sided with the plaintiffs on only some of their arguments targeting Obamacare’s mandates and Tuesday’s appellate proceedings centered on the aspect of his ruling striking down the recommendations issued by the task force after the 2010 enactment date.

During the 5th Circuit hearing, Judge Stephen Higginson, the sole Democratic appointee on the three-judge appellate panel, had skeptical questions about whether the plaintiffs had shown the types of harm – under a legal requirement known as standing – that would make it appropriate for courts to intervene. The DOJ attorney had argued that the individuals bringing the lawsuit had not said for certain they would even purchase an insurance plan if it excluded the coverage they objected to.

“What DC Circuit case allows injury in fact to rest on what I think of as a generalized grievance? ‘I sure would like to have a cheaper insurance plan, I would seriously consider it.’ Not, ‘I intend to buy it,’” Higginson, who was nominated by President Barack Obama, asked Mitchell.

The third judge on the panel was Circuit Judge Edith Brown Clement, a George W. Bush appointee.

While the case does not pose the existential threat to the Affordable Care Act that previous legal challenges did, legal experts say that O’Connor’s ruling nonetheless puts in jeopardy the access many Americans have to a whole host of preventive services.

Insurers will have to continue to cover preventive and wellness services since they are one of the Affordable Care Act’s required essential health benefits. But under O’Connor’s ruling, they could require patients to pick up part of the tab.

Most major health insurers don’t anticipate making changes to no-cost preventive services while the case proceeds through the courts, according to a joint letter sent to Congress by trade associations for insurers and large employers. They noted that preventive care saves lives and money, as well as improves health outcomes.

Millions could be affected

About 10 million people with private insurance – or about 1 in 20 such policyholders – received at least one preventive service or drug that would no longer be covered at no cost if O’Connor’s ruling is allowed to stand, according to an analysis by KFF.

KFF focused on most of the services and drugs where the task force’s recommendations underwent major changes after 2010, though other services may also be affected. It looked at claims data in 2019 rather than more recent years because the Covid-19 pandemic prompted significant changes to the use of preventive care.

The services and drugs examined include: Statins for adults ages 40 to 75 who are at risk for cardiovascular disease; hepatitis C screening for adults ages 22 and older; lung cancer screening for all adults; breast cancer risk-reducing drugs for at-risk women ages 35 and older, and hepatitis B screening for non-pregnant, at-risk adults ages 22 and older.

It does not take into account more recent recommendations, including PrEP for adults at risk for HIV and colorectal cancer screenings for average-risk adults ages 45 through 49.

Separate studies have shown the Obamacare mandate prompted an uptake in preventive services and narrowed care disparities in communities of color.

This story and headline have been updated with additional developments.