Demanding Equality in Health Care Reform
The past two weeks have been bittersweet for many people waiting for health care reform. On November 7, the House passed its health care bill, the Affordable Health Care for America Act. But many feel that it came at the expense of women because of the Stupak Amendment. The Amendment was disguised as a taxpayer protection measure – prohibiting federal funds from being used to pay for abortion coverage. However, it goes way beyond this to preclude private insurers from offering abortion coverage as part of any plan sold to members using federal subsidies, even if private money is used to pay for abortion coverage. It also prohibits states from using state matching funds to pay for abortions, and potentially undermines the states’ ability to ensure abortion access more broadly.
In an op-ed with Constitutional Law Scholar Karl Manheim from Loyola Law School, I have argued that this is unsound health policy and unconstitutional. And in a recent interview I was asked the political question that no one wants to face – if the bill reaches President Obama’s desk with the Stupak Amendment, should he sign it? In other words, is it acceptable to sacrifice women’s rights for a health care bill that holds the promise of improved health care access for so many?
I prefaced my answer by noting that the question contained a pretty big assumption – that the bill would be so wonderful in other respects that it truly would create a meaningful right to health care access for most people. Because while the Stupak Amendment is an obvious attempt to undermine certain health care access for women, there are less overt, yet other very significant barriers to care that the House and both Senate bills fail to address. As hard as we must fight to get rid of the Stupak Amendment, we cannot be complacent about other barriers that are being ignored.
The single most important goal of health care reform for the public is expanded health care access. The House and Senate versions try to accomplish this by getting more people on private and public insurance programs. The assumption is that insurance equals access, but we already know that this is not true. Expanding Medicaid eligibility and prohibiting insurance companies from refusing coverage due to preexisting condition and health status is an important start. But if the final health care reform bill ignores existing barriers to care for the insured, then, for many, promises of access will go unfulfilled. In this piece, I identify three ways in which inequality could persist, despite expansion of public and private insurance.
Medicaid Access Crisis
The plight of many Medicaid recipients is perhaps the best example of why insurance doesn’t necessarily equal access. More and more physicians, nursing homes, dentists and other health care providers are refusing to treat Medicaid beneficiaries because of already low and declining reimbursement rates. Hospitals serving primarily underserved areas with high populations of Medicaid beneficiaries are also hard hit because they have a limited, yet costly duty to treat Medicaid beneficiaries in the emergency room. With limited primary care access, these patients are often sicker and require more expensive care when they get to the emergency room. Many providers are fleeing these areas making it difficult for Medicaid beneficiaries to find someone to treat them, increasing the burden on providers left behind. Despite this access problem for Medicaid beneficiaries, states facing budget crises often react with even deeper cuts to Medicaid.
Federal law contains protections that are supposed to prevent this problem; the most important is known as the Equal Access Provision. It requires states to “assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” But recent lawsuits challenging Medicaid payment cuts have demonstrated that states haven’t been doing this.
The California Health care Foundation published an issue brief in October 2009 titled “Medicaid Payment Rate Lawsuits” which explores the history of these suits including the roadblock they hit in 2002 in Gonzaga University v. Doe. (In Gonzaga, the Supreme Court limited the ability of private plaintiffs to enforce federal rights’ violations under the Equal Access provision.) The tide appears to be turning based on a successful challenge to California Medicaid cuts last year in Independent Living Center of Southern California v. Shewry. In this case,the Ninth Circuit allowed plaintiffs to use the Supremacy Clause theory to challenge cuts made in violation of the Equal Access provision, and the court temporarily halted some cuts as a result.
Despite this recent success, we need to be cautiously optimistic about the ability of courts to address this problem. In California, I believe the courts were willing to halt Medicaid cuts temporarily because the state’s violation of federal law was so egregious and blatant. State officials admitted that they considered none of the factors required under the law and did not gather evidence about the impact of the cuts – they simply reacted to a budget crisis by arbitrarily cutting Medicaid funds.
Courts typically hate to second-guess government funding decisions on the merits, and they really don’t even like to question the process by which decisions are made, absent some egregious and clear violation of an affirmative obligation under the statute. We’ve seen in other contexts that it is very easy for government officials to dress up their decisions with more process, yet come to very bad decisions on the merits that courts ultimately refuse to review.
Meaningful federal oversight of state administration of Medicaid is also lacking. States are required to submit their plans for Medicaid administration, including the setting of payment rates, to CMS (the Centers for Medicare and Medicaid Services), the division of the U.S. Department of Health and Human Services (HHS) that oversees Medicaid. Yet the federal government is essentially hands off, approving plans as a matter of course and without real scrutiny of the states’ processes or the merits of their decisions.
The House and Senate HELP committee bills take a small step in the right direction. They require parity between Medicaid and Medicare reimbursement for primary care physicians, but this is isn’t enough, especially in light of the current fight about how the Medicare payment system is also broken. This problem is broader and deeper than low rates for primary care physicians: Medicaid rates for other critical medical providers are far below the rates for Medicare and private insurance, many states do not have a meaningful process for setting rates generally, and there is no indication of reform at the federal level to improve oversight of this process.
Dwindling Hospital Resources in Minority Communities
Inadequate Medicaid reimbursement and poor administration contributes to another problem in health care access – facility closures and diversion of health care resources from underserved communities, which disproportionately harms predominantly minority communities. Public hospital closures across the country have become so pervasive over the years that public hospitals have been labeled “endangered species.” The harms to vulnerable communities from these closures are magnified because of the cascade effect it has on other private hospitals and providers that are forced to bear a greater part of the burden of treating uninsured and underinsured patients, and then decide to flee for more affluent areas to minimize this financial burden. The effects of these closures are racialized in two ways. The loss is occurring disproportionately in areas populated with racial and ethnic minorities. And the private (often nonprofit) hospitals that are leaving these high-need, minority areas are typically relocating to affluent, predominantly white areas with a much lower need. This has been a longstanding problem, but one that continually plagues poor, urban communities as a Wall Street Journal article highlighted just last year.
Minority communities are not the only groups that tend to suffer disproportionately. People with disabilities are another group that have been unfairly burdened or even targeted by government resource cuts. In California, we’ve seen two very troubling examples of this. The first occurred a number of years ago when LA County tried to save money by closing Rancho Los Amigos National Rehabilitation Center, the only county hospital dedicated to providing primarily inpatient and outpatient rehabilitative care for people with disabilities. What made this move particularly irrational and devastating was that it came after a series of moves by the county to eliminate rehabilitation services at other county hospitals and consolidate them at the rehabilitation center they were now trying to close. The second example occurred just recently as part of the state’s reaction to the current budget crisis: California tried to cut services in the In-Home Supportive Services (IHSS) program, which serves 130,000 people with disabilities and seniors, allowing them to remain in their own homes rather than having to move to an institutionalized setting for care.
While these kinds of closures are often discussed as a function of rational decisionmaking by private market actors or unfortunate policy choices states are forced to make because of budget crises, this is not an accurate or complete picture. I’ve looked at hospital closures in a number of contexts, reviewing lawsuits, sociological studies and articles written about this problem. In many of these cases: (1) state and local governments use closures as a quick apparent fix to a budget problem, without any proof that it will really save money, and in the face of strong evidence that it will actually increase health care costs; (2) state and local government decisions to close or terminate funding for hospitals in high need areas, while directing funding to more newer, bigger and more affluent hospitals and communities has actually increased costs of care; (3) funding cuts are usually made without meaningful, if any, investigation into how such cuts will affect access for the vulnerable populations losing these resources; and (4) the result has often been a shift in resources from predominantly minority and underserved communities, to more affluent, predominantly white communities with less health care need.
The fact is that not only are these kinds of closures unsound policy, but they often violate federal and state laws that are supposed to prevent this kind of arbitrary and discriminatory action. States and local governments have federal and state law obligations to ensure an adequate distribution of hospital resources, and they have the authority to regulate private, as well as public closures and relocations. Government officials have a duty to understand the effects of any funding, closure, or relocation decisions, which should entail looking for less harmful alternatives, before authorizing or approving decisions. Yet too often funding decisions are made without this level of analysis.
Federal civil rights laws are also supposed to provide another critical check on this kind of inequity, but they don’t always work they way they should. Private and public actors that receive funding are subject to various antidiscrimination prohibitions. For example, Title VI prevents discrimination in the allocation of federal funding, which HHS has expressly said includes disparate effects that result from site location and other resource decisions. This should be a powerful tool for fighting hospital flight from minority communities, but in Alexander v. Sandoval the Supreme Court apparently gutted private plaintiffs’ ability to enforce these kinds of regulations.
The ADA, which prevents discrimination on the basis of disability, has yielded mixed results when used to challenge funding or resource decisions. In Alexander v. Choate the Supreme Court refused to strike down coverage limits on inpatient care that were facially neutral, despite plaintiffs’ claims that the limit would disproportionately harm people with disabilities. While the Olmstead case initially raised hopes that the ADA could be used to challenge resource decisions that impeded access to certain kinds of care for people with disabilities, the ADA has not been successful at challenging decisions on disparate effects grounds. Although the ADA was used successfully to temporarily halt cuts in the two cases described above, they were the exception: in both cases, the cuts targeted services specifically designed to help people with disabilities.
Courts have severely limited the ability of private plaintiffs to enforce their rights in court. With very rare exceptions, courts are reluctant to second-guess funding decisions and instead punt the problem to the Office of Civil Rights (OCR). The OCR has the obligation and authority to enforce antidiscrimination law and HHS regulations. At a minimum, it has the duty to investigate complaints of civil rights violations, but it can also be more proactive. It can gather data to determine if there are disparities in the allocation of resources and it can intervene where state and local resource decisions have discriminatory effects. HHS also has the power to withhold or threaten funding for violations. Yet, HHS and OCR have failed to aggressively enforce antidiscrimination laws. Indeed, in 1999 the U.S. Commission on Civil Rights concluded that the “timid and ineffectual enforcement efforts of the [Office of Civil Rights] have fostered, rather than combated the discrimination that continues to infect the Nation’s health care system.”
Many legal scholars have been instrumental in demonstrating how our current civil rights framework is failing, and what we need to do to fix it. Indeed, Professor Vernellia Randall, a law professor at the University of Dayton, heeded Obama’s invitation to host health care town hall meetings to gather public input on how to address and eliminate health disparities as part of health care reform. Through these meetings, she produced a comprehensive and thoughtful list of specific recommendations for strengthening civil rights enforcement and eliminating disparities, which I believe was submitted to the Obama administration; however, I don’t see these specific recommendations reflected in any of the current bills.
Insurance Discrimination: Reproductive Health & Certain Disabilities
Recent controversies, such as the one provoked by the Stupak Amendment, have highlighted what is really a longstanding problem of how women have been disadvantaged in the health care arena. In addition to coverage exclusions for medically necessary abortions, there are a number of other examples: higher premiums for women than men for comparable health care coverage; denying coverage or increasing premiums for women who are victims of domestic violence or rape or because the woman has had a C-section; and infertility exclusions that appear facially neutral, but that effectively exclude treatment used to treat female-specific problems or aspects of infertility, while covering most male-specific treatment or procedures.
People with certain disabilities have also been consistently disadvantaged in health care coverage, especially in the private insurance context. For example, many insurers have express exclusions for HIV, which exclude not only HIV-specific problems or treatment, but also “HIV-related conditions.” Insurers have used this to try to exclude coverage for common medical conditions that typically would be covered for people without HIV.
Insurers also have a history of either excluding or severely limiting mental health benefits, which has been ameliorated in part by federal and state mental health parity laws. Yet people with certain mental health conditions, especially developmental disabilities like autism, are still routinely discriminated against because insurance companies do not want to pay for on-going, rehabilitative care.
Usually, the justification for excluding these conditions is cost; yet other costly conditions are not excluded and plans have not been forced to prove that its coverage exclusions are actuarially or medically sound or consistent with its broader policy design. In fact, in some instances, especially in the reproductive health area, coverage of certain procedures (abortion) or medication (prescription contraception) would likely save the plan money; nonetheless such exclusions have persisted over many decades.
Basically employers and insurers want us to ignore the fact that such exclusions could reflect and be linked to broader, systemic bias that persists for each of these groups, in the health care arena and society generally. They also want us to ignore the likelihood that this bias plays some role in how health financing is designed. However when employers, insurers, and policy makers are forced to explain or justify coverage exclusions, the role of bias and stereotyping becomes clear. In the reproductive health context, for example, we learn that assumptions that women’s reproductive and sexual health is unimportant, unnecessary, or is morally questionable underlie coverage policy exclusions. We have also seen evidence that reproductive health exclusions tend to reflect and are used to reinforce stereotypes about women’s proper gender roles and sexual freedom.
In the mental health context, plans have tried to avoid covering rehabilitative and behavioral treatment for children with developmental disabilities, claiming that the services are not medically necessary or even that services (like speech therapy, occupational therapy, and behavioral therapy) are not “medical” care at all. Yet plans have no trouble covering these same services for people with “acquired disabilities” (such as those from stroke). Implicit in this different treatment is a devaluing of the benefits that such treatment can have for people with developmental disabilities, in part because these patients are unlikely to improve to “normal” or a clear “baseline level of function.” This attempt to de-medicalize rehabilitative health services further devalues these patients’ ability to access care that is critical to their social and physical functioning.
In the HIV context, plans haven’t been forced to articulate reasons for their exclusions, in part because they use blanket coverage exclusions that leave no room for discretion or legal challenge. One can’t help but think that these exclusions are inextricably linked to the broader discrimination against people with HIV that still persists in many parts of our health care system, even by providers like dental offices, nursing homes, and among some OB/GYNs. One also can’t ignore the fact that HIV and mental health exclusions are likely tolerated because of a deeper stigma that society has attached to both groups historically: unlike people suffering from other medical conditions, people with HIV and severe mental illness have been feared, blamed for their illness, and devalued by society generally. It is true that public education and medical advances have helped eliminate much of this bias and stigma. And there has been a significant increase in the commitment of public resources for both of these groups. However, this discrimination still exists and this strong public commitment is not reflected in all aspects of health care, least of all within the private insurance arena.
Civil rights laws would seem to be the obvious tools to use to fight this kind of discrimination, but as already noted above, they have yielded mixed success. The main problem is that most of the examples I gave are disease-based coverage exclusions, and courts don’t really know how to analyze these claims because they don’t fit the traditional discrimination scenarios.
Title VII prohibits sex discrimination in employment, and plaintiffs have used Title VII and the Pregnancy Discrimination Act to challenge many different reproductive health exclusions in employment-based insurance plans. These challenges have been successful where the exclusion is pregnancy-related and affects only women (pregnancy and prescription contraception). These are seen as easy cases because of the sex-specific nature of the exclusion. In the case of infertility treatment exclusions, however, Title VII challenges have been unsuccessful despite the fact that the exclusion is pregnancy-related. Courts are not willing to consider the disproportionate harm to women if the exclusion is facially neutral.
Moreover, as helpful as Title VII can be in some cases, it is limited to the employment context. This is why we still hear about many insurance companies in the individual market charging women higher rates than men for the same coverage, something that would be clearly prohibited by Title VII. For this, we rely on state antidiscrimination laws which may or may not be as robust as federal law.
The ADA has presented similar challenges, and has not had much impact in fighting disparities in health care financing. Most courts hearing these challenges view coverage exclusions as fundamentally different from traditional discrimination between disabled and nondisabled people. Some are explicitly hostile to the idea that antidiscrimination law should be used to create coverage mandates or second-guess financing decisions. Courts also rely heavily on the “Safe Harbor” provision in the ADA, which essentially says that the antidiscrimination prohibitions should not be construed to prohibit insurers or other entities from underwriting or classifying risks in a manner consistent with state law.
Although the ADA makes clear that this provision cannot be used as a subterfuge to evade antidiscrimination protections, courts have not really used this provision. While courts may distinguish disease-based coverage exclusions from facially group-based categories as a legal matter, the manner in which such bias occurs suggests they are inextricably linked. Unfortunately, courts won’t look closely enough to figure out if this is what’s happening in any given case: employers and insurers have not been required to justify or support their exclusions based on medical or actuarial grounds and plaintiffs have not had an adequate opportunity to demonstrate the likelihood of pretext or bias. Legislative mandates and state regulators have helped address some of these disparities, but coverage exclusions and bad faith denials are still pervasive, and the current bills do not address this problem.
The bottom-line is this: While the current bill as proposed does some good, it’s not enough. There are serious legal impediments and regulatory failures that undermine existing promises of care for women, people with certain disabilities, and many underserved, minority communities, which the current bills ignore.
Expanding Medicaid eligibility without imposing meaningful oversight of the rate setting and administrative process will not ensure access to care if there aren’t enough providers willing to treat them. Getting more people insured will not help people living in communities that have been drained of health care resources and do not have enough physicians, hospitals or other health care providers. And discriminatory resource allocations, insurance exclusions and bad faith denials will persist without more robust civil rights enforcement by federal and state regulators, and reforms that empower patients to challenge these actions in court.
Brietta Clark, Professor of Law at Loyola Law School in Los Angeles.
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