The ACA’s Nondiscrimination Rule: Hobby Lobby 2.0?

By Elizabeth Sepper

Should healthcare providers, researchers, and insurers be able to engage in sex discrimination for religious reasons? HHS asked the public to weigh in on this question with regard to the ACA’s nondiscrimination provision.

The answer is no for three important reasons. First, the statute doesn’t allow additional exemptions. Not only is the text clear, but Congress also considered and rejected broader religious exemptions. Second, authorizing sex discrimination for religious reasons is bad health policy with damaging effects for women and LGBT people. Third (as I argued in separate comments with a group of law and religion scholars), granting religious exemptions here runs into constitutional limits set by the Establishment Clause.

Additional Religious Exemptions Are Inconsistent with the Statute.

Let’s look first at the statutory text that HHS is interpreting. Section 1557 says nondiscrimination protections apply “Except as otherwise provided for in this title (or an amendment made by this title).”  And Title I of the ACA, in which 1557 is found, does provide some religious exemptions—including existing federal conscience protections and exemptions for objections to assisted suicide.  Title I also allows states to prohibit abortion coverage in the state exchanges.  Otherwise, the Nondiscrimination Rule applies. (For more on this, see here).

Adding more force to this argument is the fact that Congress specifically considered and rejected broader religious exemptions to the Women’s Health Amendment and similarly refused to expand federal conscience legislation. The rejected proposal rule tells us that agencies can’t adopt interpretations of statute that Congress rejected.  Expanded exemptions are inconsistent with Congress’s considered judgment.

The Burdens of Religious Exemption

Authorizing sex discrimination—whether religiously motivated or not—is bad health policy. Discrimination may lead to outright denials of care, delay, and inadequate care at a time that patients are particularly vulnerable due to disease or injury. Individuals face economic costs as they search for alternate providers of insurance or healthcare—a search that may be rendered more difficult in the many areas of the country with highly consolidated healthcare or health insurance markets.

Sex discrimination results in significant and even health- and life-threatening harms to people already disadvantaged by their sex, sexual orientation, or gender identity. Transgender people have died as a result of discriminatory and hostile treatment by healthcare providers. Miscarrying women have been denied access to medication, not infrequently for religious reasons. LGBT people and people with HIV, in particular, frequently experience stigma in healthcare settings and often come to avoid future encounters with healthcare with potentially severe consequences.

Religious exemptions specific to sex also work to deny individuals equal citizenship in the healthcare system. As the Supreme Court has long held, sex discrimination inflicts “stigmatic injury” and “deprives persons of their individual dignity.” For the federal government to fund discriminatory practices would send a message of endorsement of sex discrimination to the detriment of members of disfavored minority groups and of society at large.

The Establishment Clause Limits Exemptions that Impose Significant Burdens on Non-Beneficiaries

Speaking now only for myself and not my co-authors, I’d like to add a significant constitutional concern, which was raised in comments from law and religion scholars on the Nondiscrimination Rule.

In a line of cases going back decades, the Supreme Court has held that the government may not grant religious exemptions when that means shifting meaningful costs onto identifiable third parties. (see Estate of Thornton v. Caldor, Cutter v. Wilkinson, United States v. Lee, Holt v. Hobbs). Typically, when the law accommodates religious actors, any resulting costs are absorbed by the government or by the public. If, however, the government places those costs on the shoulders of other private citizens, it implicates the religious freedom of those third parties. As the Supreme Court has stated, “The principle that government may accommodate the free exercise of religion does not supersede the fundamental limitations imposed by the Establishment Clause.”

The Establishment Clause limits on burden shifting expressed have their full effect here. Religious exemptions to the Nondiscrimination Rule would impose significant—and even health- and life-threatening—costs on a discrete and identifiable group of third parties. The burdens of accommodation will fall not on the government directly or the population broadly, but rather on a discrete group of patients already disadvantaged due to their sex, sexual orientation, or gender identity. Any such exemptions would impair basic rights to non-discrimination, security, health, and personal welfare.

With the exception of the final section, this post draws on comments submitted by health and equality experts (Jessica Roberts, Elizabeth Deutsch, Elizabeth Dervan, and Jessica Clarke). For earlier posts, see here and here. In our final post, we’ll explain how HHS can do better in fashioning a remedy for violations of Section 1557.