Healthcare Business News

Democrats scramble in wake of Hobby Lobby decision

By Joe Carlson
Posted: June 30, 2014 - 3:45 pm ET

Soon after the U.S. Supreme Court struck down the federal rule compelling closely held companies to provide birth control coverage over their owners' religious objections, Democrats in Congress signaled they would craft legislation to make sure that women who get their health insurance from such companies can still get contraception at no cost.

But Monday's decision, which for the first time granted corporations the right to exercise religious beliefs, may also affect the prospects of success for religious not-for-profits that also oppose the so-called contraceptive mandate.

The high court struck down a federal regulation issued under the Patient Protection and Affordable Care Act that required insurance plans for most privately held companies to include all 20 forms of approved birth control without cost-sharing to women in their plans. The rule was crafted after the Institute of Medicine concluded birth control was an essential health benefit for women. But three family-run companies with strong religious beliefs objected, saying prescription emergency contraceptives and intrauterine devices interfered with the viability of a fertilized human egg, which they said was a form of abortion.

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A 5-4 majority of the court in Burwell v. Hobby Lobby agreed with the company owners. The court ruled that because HHS crafted an accommodation that let religious not-for-profits assign their duties under the rule to third-party insurance companies, that meant applying the mandate to for-profit companies was not “the least restrictive means” of accomplishing the same goal in the private workforce. The 1993 Religious Freedom Restoration Act requires any law restricting free exercise of religion to be the least restrictive means. The court said the decision only applies to “closely held” companies, which include companies that are owned and controlled by members of a single family.

The American Academy of Family Physicians said the decision put families' health at risk because employers hold control over the insurance options available to their employees.

“With this decision, the court has moved healthcare decisions out of the exam room where patients can consult with their physicians—and where such decisions should be made—and put them into the hands of business owners who base decisions on personal beliefs rather than medical science,” AAFP President Dr. Reid Blackwelder said.

But the Becket Fund for Religious Liberty, the public-interest law firm that represented Oklahoma City-based Hobby Lobby, said the ruling would protect the rights of people of all faiths.

“The court's reasoning was clear, and it should have been clear to the government,” said Lori Windham, senior counsel with the Becket Fund. “You can't argue there are not alternative means when your agency is busy creating alternative means for other people.”

After an outcry from the religious community, HHS published an accommodation available only to not-for-profit religious organizations that allows them to avoid covering birth-control they object to by having a third-party insurance company cover it, without passing the costs back to the company that objects.

More cases ahead

But separately, the religious not-for-profits that benefit from that alternative system have also filed more than four dozen lawsuits against HHS—cases that appear bound for their own Supreme Court appeal.

In those cases, religious groups including many Roman Catholic organizations say the accommodation to assign the contraception coverage to third-party insurers still violates their religious beliefs because they must sign forms handing over the coverage, which is the same as cooperating in providing healthcare benefits to which they object.

The Becket Fund said Monday's decision seemed to strengthen the religious groups' chances of success in an eventual Supreme Court challenge. That remained open for debate, given the language in a four-page standalone concurrence by traditional swing-vote Justice Anthony Kennedy.

Kennedy wrote that he agreed with the conservative majority because “there is an existing, recognized, workable and already-implemented framework to provide coverage. That framework is one that HHS has itself devised.”

It's not clear that Democrats who want to provide for contraception coverage in all private insurance plans would include that kind of framework in forthcoming legislative proposals.

Late Monday morning, Sen. Patty Murray, (D-Wash.), confirmed in a statement that she is working with administration officials to write a bill that would ensure women's access to contraceptives regardless of whether they work for private companies that object to that coverage. Details of that proposal weren't immediately disclosed. Sen. Tom Harkin, (D-Iowa), chairman of the Senate health committee, announced that he would also be exploring legislative options.

White House spokesman Josh Earnest, meanwhile, was quoted as saying that President Barack Obama would encourage a legislative solution and had not ruled out executive action to mitigate the effects of the ruling.

“President Obama believes that women should make personal healthcare decisions for themselves rather than their bosses deciding for them," Earnest said.

Republican critics of the law on Monday were not voicing support for such a proposal.

Law 'unworkable,' Boehner says

After the ruling, Republican House Speaker John Boehner used the opportunity to attack the broader law, saying “the president's healthcare law remains an unworkable mess and a drag on our economy.”

The decision was immediately hailed by conservatives as a victory for religious rights, and condemned by liberal commentators who said it favored companies' ability to exercise religion over employees' rights to federally guaranteed healthcare services.

In order to find that the rule illegally restricted religious beliefs, the court's majority first had to conclude that the religious freedom law applied to companies: “Protecting the free-exercise rights of corporations like Hobby Lobby … protects the religious liberty of the humans who own and control those companies,” Justice Samuel Alito wrote for the majority.

In a dissenting opinion, Justice Ruth Bader Ginsburg called Alito's conclusion a novel interpretation, though in keeping with a recent trend of expanding private companies' rights in America.

“Until this litigation, no decision of this court recognized a for-profit corporation's qualification for a religious exemption from a generally applicable law,” she wrote. “The absence of such precedent is just what one would expect, for the exercise of religion is characteristic of natural persons, not artificial legal entities.”

The majority opinion was written by Alito and joined by four other male justices: Kennedy, Chief Justice John Roberts, and justices Antonin Scalia and Clarence Thomas. Ginsburg's dissent was supported in large part by justices Stephen Breyer, Elena Kagan and Sonia Sotomayor.

Follow Joe Carlson on Twitter: @MHJCarlson

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