A Mixed Message on Obamacare from Two Federal Circuits

By Greg Curfman and Holly Fernandez Lynch

It was as if lightning had struck twice in the same place.

On Tuesday two pivotal federal circuit court opinions that could dramatically impact the future of Obamacare were unexpectedly issued within hours of each other. And what’s more, the two opinions reached opposite conclusions on the same question, setting the stage for further appeals and possible Supreme Court review, potentially bringing the Affordable Care Act (ACA) before the high court for the third time since its passage.

At issue in both circuit court cases was the legality of providing subsidies in the form of Internal Revenue Service tax credits for the purchase of health insurance on the federal exchange (Healthcare.gov).

In a decision that stunned Obamacare supporters–but elated opponents–a three-judge panel of the Federal Appeals Court for the DC Circuit ruled in Halbig v. Burwell that the purchase of health insurance on the federal exchange may not be subsidized by IRS tax exemptions. This judgment would leave millions of Americans with earnings between 133% and 400% of the federal poverty level without affordable health insurance, and it would also threaten the viability of the employer mandate.

In contrast, in a unanimous (3-0) opinion in a nearly identical case, King v. Burwell, the Federal Appeals Court for the Fourth Circuit in Richmond, VA, came to the opposite conclusion.

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Justice Breyer and Wheaton College v. Burwell

By Gregory Curfman

Tom Goldstein, Publisher of SCOTUSblog, has opined on why Justice Stephen Breyer apparently joined the majority opinion in Wheaton College v. Burwell, which the Court released last Thursday. The majority granted Wheaton a temporary injunction exempting the College from the contraceptive mandate, which was spawned by the Affordable Care Act and which the College claimed violates its religious principles. The vote was 6 to 3, with Justice Scalia filing a concurrence (agreeing “in the result”) and Justices Sotomayor, Ginsburg, and Kagan issuing a forceful dissent. The opinion was unsigned, leaving ambiguous whether Justice Breyer actually did join the majority, though the numbers leave little doubt that he did.

Tom Goldstein believes that Justice Breyer joined the majority because, in doing so, he gained more than he lost. In addition to granting the College an injunction, the majority opinion also states that nothing in the opinion prohibits the government from taking steps to provide women access to contraceptive agents without a copayment. The specific language in the opinion is:

“Nothing in this order precludes the Government from relying on this notice, to the extent it considers it necessary, to facilitate the provision of full contraceptive coverage under the Act.”

Thus, Tom Goldstein believes that in joining the majority, Justice Breyer accomplished the pragmatic objective of preventing the loss of contraceptive coverage for the nation’s women who are employed by nonprofit organizations.

Without comment from Justice Breyer himself, we of course cannot know why he (presumably) joined the majority in Wheaton College v. Burwell, despite the fact he dissented when the Court granted Wheaton College a brief (two-day) injunction earlier in the week. And despite the fact that he also joined Justices Ginsburg, Sotomayor, and Kagan in issuing a very strong dissent in Hobby Lobby v. Burwell. Continue reading

In the Aftermath of Hobby Lobby

By Gregory Curfman and Holly Fernandez Lynch

[A quick follow up to our recent NEJM Perspective on the case, with I. Glenn Cohen]

Immediately after Justice Samuel Alito’s announcement on June 30 of the majority opinion in Burwell v. Hobby Lobby, the Supreme Court took further actions on the contraceptive mandate, and both supporters and opponents of the opinion were furiously assessing the implications and impact of what has proved to be a wild week for women’s access to contraception.

A report from the IMS Institute last April found that 24 million more prescriptions for oral contraceptives without a copayment were written in 2013 (when the contraceptive mandate was in full effect) than in 2012 (when it was not). This translates into a savings of $483 million for women (on average $269 per person). The percentage of women with no out-of-pocket costs for contraceptives increased from 14% to 56%. What will be the impact of the Supreme Court’s decision in Hobby Lobby on these trends?

The Hobby Lobby opinion is quite clear that the contraceptive mandate, spawned by the Affordable Care Act, may not be enforced against closely held, for-profit companies with religious objections to paying for contraceptives coverage. In other words, such companies will not face the hefty fines for noncompliance that would otherwise be imposed by the Department of Health and Human Services.

Nonprofit Organizations

The opinion does not, however, apply to religious-affiliated, nonprofit organizations, such as Catholic schools or religious charities. For such organizations that object to paying for contraceptives coverage, the applicable regulation provided an accommodation by which the entities themselves were off the hook, but instead their insurers (or in the case of self-insured organizations, a third party administrator) would be required to provide free contraceptives coverage without cost to either the employee or the employer.  In order to be eligible for this accommodation, the nonprofit entity must complete a form designating its objection and provide a copy to its health insurance issuer or a third party administrator. A number of nonprofits filed lawsuits asking that they be exempt from even this requirement, on the grounds that they were still being required to violate their religious beliefs by deputizing someone else to provide the objectionable services. One such group, the Little Sisters of the Poor in Colorado, a group of nuns who perform charity work, was granted an injunction by the Supreme Court last January.

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Religious Freedom and Access to Health Care

SCOTUSfrontCheck out the “hot off the press” New England Journal of Medicine Perspectives piece “When Religious Freedom Clashes with Access to Care” by Petrie-Flom Faculty Director I. Glenn Cohen, Executive Director Holly Fernandez Lynch, and NEJM Executive Editor (and PFC Faculty Affiliate), Gregory Curfman.  We review the legal background for SCOTUS’ Hobby Lobby decision, summarize the majority and dissenting opinions, and clarify some key implications of the case, including further problematization of the employer-based health insurance system, reduced likelihood of future attempts to offer religious exemptions to health care mandates, and expanded religious challenges in the health care space.  We close by noting that although the public’s ire and praise has been directed at the Justices, they were applying Congress’ statute – and Congress could (but is very unlikely to) amend the Religious Freedom Restoration Act to be less stringent, or otherwise intervene to ensure that women have affordable access to contraceptive services regardless of their employer’s beliefs.

Take a look and let us know what you think!

TOMORROW: Second Annual Health Law Year in P/Review

Please join us for our second annual Health Law Year in P/Review event, co-sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine. The conference will be held in Wasserstein Hall, Milstein East C at Harvard Law School on Friday, January 31, 2014, from 8:30am to 5:00pm.

This year we will welcome experts discussing major developments over the past year and what to watch out for in areas including the Affordable Care Act, medical malpractice, FDA regulatory policy, abortion, contraception, intellectual property in the life sciences industry, public health policy, and human subjects research.

The full agenda is available on our website. Speakers are:  Continue reading

1/31: Second Annual Health Law Year in P/Review

Please join us for our second annual Health Law Year in P/Review event, co-sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine. The conference will be held in Wasserstein Hall, Milstein East C at Harvard Law School on Friday, January 31, 2014, from 8:30am to 5:00pm.

This year we will welcome experts discussing major developments over the past year and what to watch out for in areas including the Affordable Care Act, medical malpractice, FDA regulatory policy, abortion, contraception, intellectual property in the life sciences industry, public health policy, and human subjects research.

The full agenda is available on our website. Speakers are:  Continue reading

1/31: Second Annual Health Law Year in P/Review conference

Please join us for our second annual Health Law Year in P/Review event, co-sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School and the New England Journal of Medicine. The conference will be held in Wasserstein Hall, Milstein East C at Harvard Law School on Friday, January 31, 2014, from 8:30am to 5:00pm.

This year we will welcome experts discussing major developments over the past year and what to watch out for in areas including the Affordable Care Act, medical malpractice, FDA regulatory policy, abortion, contraception, intellectual property in the life sciences industry, public health policy, and human subjects research.

The full agenda is available on our website. Speakers are:  Continue reading

On Access and Accountability: Two Supreme Court Rulings on Generic Drugs

By Marcia Boumil and Gregory Curfman

In 2013 the U.S. Supreme Court issued two important rulings in cases involving the marketing of generic drugs. In Federal Trade Commission v. Actavis, the Court addressed the law governing a controversial pharmaceutical marketing practice known as reverse payment agreements, or pay for delay – a byproduct of the Hatch-Waxman Act.  This occurs when a generic drug company identifies a vulnerable patent held by a brand-name drug manufacturer and seeks Food and Drug Administration (FDA) approval for a generic version before the patent expires, provoking a lawsuit by the brand-name company for alleged infringement. A subsequent settlement involves the brand-name company paying the generic company to delay commercialization of its product (but not beyond the expiration of the patent). The FDA alleged that reverse payment agreements violate antitrust laws. The Supreme Court held that their validity would be evaluated on a case-by-case basis using the “rule of reason” standard. According to this standard, only those agreements that restrain trade will be viewed as violations of anti-trust law.

In the second case, Mutual Pharmaceutical v. Bartlett, the Court affirmed its 2011 ruling in Mensing v. PLIVA and held that generics manufacturers are substantially immune from civil claims regarding injuries caused by their products whether the tort claim be based upon failure to warn (Mensing) or design defect (Bartlett). The basis of the decision resides in the FDA requirement that generic drug labels be consistent with the label of the brand-name equivalent. Just days after the Bartlett decision issued, the FDA indicated its intent to propose a revision to the labeling requirements for generic drugs to create parity with branded drugs. If adopted, this revision could vitiate the law set forth in Mensing and Bartlett.

For more coverage of these cases, see the New England Journal of Medicine essay here.

 

Health Law Year in P/Review Video

If you couldn’t make it to our inaugural session on Health Law Year in P/Review, co-hosted by the Petrie-Flom Center and the New England Journal of Medicine, you’re in luck!  You can watch the video here:

http://www.law.harvard.edu/media/2013/02/01_pf.mov

Topics and speakers included:

The ACA and Health Care Reform

Contraceptives Coverage and Personhood Amendments

Immigrants’ Access to Health Care

Affirmative Action and Medical School Admissions

Gene Patenting

Tobacco and Obesity Policy and the First Amendment

Summary and Wrap Up

Closing Remarks from Dean Martha Minow