(CNN) – The Trump administration has the authority to make it easier to buy a less expensive alternative to Obamacare coverage, a federal judge ruled Friday.
The lawsuit, brought by a coalition of non-profit insurers that sell plans on the Affordable Care Act exchanges and by patient assistance groups, centers on the administration extending the duration of short-term health insurance plans to just under one year, instead of three months. The rule, which was issued last year, stems from an executive order President Donald Trump issued in the fall of 2017.
“Plaintiffs have strived mightily to frame the 2018 rule as such an ‘extraordinary’ administrative action, striking a blow to the heart of the ACA in a manner that is both unprecedented and unworthy of judicial deference,” Judge Richard Leon of the US District Court for the District of Columbia wrote in his decision. “Unfortunately for the plaintiffs, neither the law nor the facts supports that conclusion.”
The ruling represents a win for the administration, which recently has suffered a string of setbacks in court over its efforts to chip away at the Affordable Care Act and to reduce health care costs.
Short-term plans, which have been available for years and were originally designed to fill a temporary gap in coverage, are typically cheaper than Obamacare policies. But that’s because they are allowed to exclude those with pre-existing conditions and base rates on an applicant’s medical history, unlike Obamacare plans.
Opponents of these policies say they could hurt patients who need coverage and could roil the Affordable Care Act markets by drawing healthier consumers away from the exchanges and pushing up the premiums for those who remain.
“Indeed, the district court itself recognized that administration’s decision allows junk insurance to compete directly with comprehensive, Affordable Care Act-compliant insurance plans,” said Margaret Murray, chief executive officer of the Association for Community Affiliated Plans, the lead plaintiff. “That result subverts the health care protections of the ACA. Junk insurance, no matter what it’s called, is an inferior and hazardous substitute for comprehensive coverage.”
Murray indicated the association will continue the legal battle, saying, “We are confident that the appellate court will see this differently.”
The Trump administration is currently appealing another district court judge’s decisioninvalidating its effort to make it easier for small businesses to band together and buy coverage in association health plans. That judge, John Bates of the US District Court for the District of Columbia, called the administration’s rule “clearly an end-run around the ACA.” It also stems from a Trump 2017 executive order.
Last week, another federal judge nixed a regulation that would have required drug makers to include their list prices in TV ads, saying the agency had overstepped its authority.
The administration is also battling in federal court to have the entire Affordable Care Act declared unconstitutional. It joined a lawsuit brought by a coalition of Republican states that are arguing that the landmark health reform law was undone when Congress essentially eliminated the penalty for not having health insurance. A district court judge in Texas agreed with that view in December.
A coalition of Democratic-led states and the House of Representatives are defending the law in court. A panel of three appellate judges in New Orleans heard oral arguments in the case last week.