Religious health care providers win injunction on ACA rules

A federal judge has issued a permanent injunction on behalf of religious health care providers who feared the Biden administration would interpret the Affordable Care Act as requiring them to perform abortions or gender-transition treatment against their conscience.

The U.S. Department of Health and Human Services had argued that it doesn't require religious providers to offer such procedures and has never brought or threatened any enforcement activity against a religious entity in such a case.

But U.S. District Court Judge Reed O'Connor interpreted HHS regulations as forcing the plaintiffs — a Catholic hospital system in the Midwest and a Christian medical association — to choose between their beliefs and their livelihood, resulting in “irreparable injury.”

The decision underscores a continued dispute between conservative religious health care providers and HHS over an issue that has generated a patchwork of rulings that will likely have to be sorted out by appellate courts.

O'Connor, whose court is in the Northern District of Texas, issued the injunction based on his earlier ruling that found HHS in violation of the Religious Freedom Restoration Act, which requires deference to religion barring a "compelling government interest."

The injunction benefits only the plaintiffs — Franciscan Alliance, a Catholic hospital network in Indiana and Illinois, and the Christian Medical & Dental Associations and their 19,000 members nationwide — though O'Connor voided the disputed portions of the law in the earlier ruling.

Another federal judge issued a similar decision in favor of a Catholic health system in North Dakota in January. The Biden administration is appealing it.

The plaintiffs in the Texas court sued in 2016 over Affordable Care Act-related rules issued by HHS that year under the Obama administration. Those rules — applying to most medical providers by virtue of their participating in federally funded programs — barred discrimination based on factors including sex, interpreted as including gender identity, and pregnancy status, such as “termination of pregnancy.”

An HHS analysis at the time said health care institutions that, for example, perform hysterectomies for medical purposes would need to provide them to transgender men, though the rules said separately that federal protections for religious freedom and conscience would supersede any requirements. The analysis also noted that the ACA and other federal laws protected medical providers from having to provide abortions.

O'Connor in 2019 voided the parts of the rules barring discrimination based on gender identity and termination of pregnancy.

The Trump administration strengthened religious exemptions in 2020 and eliminated protections for gender identity — although other federal courts temporarily blocked that change. It was also soon followed by a Supreme Court ruling that interpreted the federal ban on sex discrimination as also prohibiting discrimination based on gender identity.

This May, HHS said it would interpret its rules according to that Supreme Court ruling but would also abide by previous court rulings such as that of O'Connor. The judge, in ordering the permanent injunction this week, said that was a contradiction.

Attorney Luke Goodrich, who represented the plaintiffs on behalf of Becket, a legal organization focused on religious liberty, applauded the decision.

“Everyone is better off when these doctors and hospitals can continue to provide top-notch medical care” without violating their consciences, he said.

But Omar Gonzalez-Pagan, senior attorney and health care strategist at Lambda Legal, which focuses on LGBTQ rights, said “the court and the plaintiffs were fabricating a controversy” when there “has been no threat of enforcement against the plaintiffs.”

He noted there are conflicting federal court decisions on defining sex discrimination in the ACA rules, and “at some point and time there will be a consensus among the courts or the Supreme Court may have to intervene.”

Lindsey Kaley, staff attorney with the American Civil Liberties Union's Center for Liberty, said the ruling limits federal enforcement but “does not change the fact that transgender people who have been turned away from health care can continue to pursue litigation." The ACLU's Texas branch intervened on behalf of HHS.

“Gender-affirming care is life-saving care, and doctors agree that it is medically necessary for many transgender people,” Kaley said.