Federal Court Considering Challenge to Missouri Health Reform Regulation

KANSAS CITY, Mo. – Led by the former top insurance regulator in the state, a local physician and several others are seeking to void a Missouri law that regulates workers helping to implement the Affordable Care Act.

Dr. Wayne Letizia of Independence is among the plaintiffs who filed a federal lawsuit last month in Jefferson City. They are challenging Missouri’s licensing requirements for those who assist consumers with the new health insurance marketplaces.

They argue the law violates the U.S. Constitution and that it conflicts with federal authority included in the Affordable Care Act, which established positions known as “navigators” and “certified application counselors,” or CACs.

The state Attorney General’s Office filed a response to the suit Dec. 20, arguing that lawmakers narrowly tailored the statute to apply only to those seeking to provide navigator services for compensation. The aim, according to the law’s defenders, is to prevent unscrupulous individuals from acting as unlicensed insurance agents.

Washington, D.C., attorney Jay Angoff filed the suit. He served as Missouri insurance commissioner in the 1990s, and before recently returning to private practice served in Kansas City, Mo., as regional director for the U.S. Department of Health and Human Services.

Leading edge
Known as the Health Insurance Marketplace Innovation Act, the contested measure was signed into law in July by Gov. Jay Nixon.

One report has called the Missouri case the first of its kind in the nation.

Several other states are regulating navigators and CACs.

The mixing of health care law and constitutional law makes for a complicated case, said Ann Marie Marciarille, an associate professor that specializes in health care law at the University of Missouri-Kansas City School of Law.

Intertwined in the case, she said, is a decades old law that gives states the right to regulate insurance along with the First Amendment right of free speech.

More specifically, though, she said the suit revolves around how much latitude Congress gave states to operate between the minimum standards the federal government set for health insurance navigators and the presumption that state licensing standards could not be so arduous that nobody could earn certification.

“So there is kind of a window of opportunity,” Marciarille said, “and the question is: ‘What is Missouri doing inside that space?’ It’s really interesting to see.”

According to the state, there are 561 individual navigators licensed in Missouri along with 88 licensed navigator organizations.

On one level, the disagreement hinges on the words “for compensation” included in Missouri’s definition of a navigator (“a person that, for compensation, provides information or services in connection with eligibility, enrollment, or program specifications of any health benefit exchange operating in this state …”)

The plaintiffs argue that language is in “direct conflict” with the ACA because the federal law already prevents navigators or CACs from presenting “biased information, charging for their services and being insurance agents.”

The state, however, contended that “for compensation” limits the scope of the regulation to people who provide navigator services for pay.

In its answer, the state said, the only activity “the Missouri Act prevents is someone – who is compensated – who may not understand a complex issue from giving bad advice.”

Plus, the state said, the Missouri law governs “advice” while the Affordable Care Act regulates the provision of “information.”

“A person can provide information and facilitate enrollment without giving advice,” according to a response filed by the state with the court.

The plaintiffs also argue that the Missouri regulation stifles the First Amendment guarantee of free speech, alleging the language could require anyone, including health care professionals, to become a licensed navigator before talking to someone about health insurance.

“There has been some reticence to talk to patients about insurance,” Letizia said, “because we are not supposed to.”

He also said the state law could affect a practice’s bottom line by limiting a physician’s ability to suggest payment options.

The state countered that the law does not violate the First Amendment because it’s regulating economic activity.

Lawyers for the state also pointed out that the Missouri statute expressly exempts health care providers and nonprofits that disseminate public health information to a general audience.

In an affidavit accompanying the suit, Letizia said the exemption is too narrow because health care providers “are still prohibited from discussing the terms, benefits and features of health plans.”

Ulterior motive
Politics is the real motive behind the legal challenge to the state statute, argued Larry Case, executive vice president of the Missouri Association of Insurance Agents.

He said Angoff, who is an ally of Health and Human Services Secretary Kathleen Sebelius, a Democrat, is taking aim at a law passed by the Republican-led Missouri General Assembly.

Angoff did not respond to requests for an interview.

In drafting the legislation, Case said Missouri lawmakers addressed the concerns raised in the lawsuit through the exemptions granted to physicians and others.

Marciarille, the law professor, said the criticism of navigators established in the Affordable Care Act stands in stark contrast to the high marks given to a virtually identical Medicare model that has operated for years through the State Health Insurance Assistance Program.

For that reason, she said, whoever drafted the navigator portion of the health-reform law might have considered it fairly benign.

“But isn’t that in some ways the meta-story of the ACA,” Marciarille said. “Everything about it is controversial. So a little passage that you thought maybe even was kind of boilerplate – there is no boilerplate in the ACA.”

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