In late April, the U.S. Department of Health and Human Services (HHS) updated regulations for Section 1557 of the Affordable Care Act (ACA), making its important nondiscrimination protections more widely available.
Also known as the Health Care Rights Law, Section 1557 is a core component of the ACA. It prohibits discrimination in health care based on race, color, national origin, age, disability, and sex. The updated rule reflects the U.S. Supreme Court’s 2019 holding that sex discrimination protections extend to discrimination based on sexual orientation and gender identity. It further clarifies their application to discrimination on the basis of sex stereotypes; sex characteristics, including intersex traits; and pregnancy or related conditions.
Statutorily, Section 1557 applies to “any health program or activity, any part of which is receiving [f]ederal financial assistance.” The final rule takes a more expansive view of this language than previous regulations by applying it to health insurance companies that receive direct or indirect federal funding, and to all their plans if they are “principally engaged” in health care.
In so doing, the rule reaches Medigap plans for the first time. Historically, Medigaps have not had to comply with Section 1557 because they do not receive direct federal funding. This has allowed them to engage in discriminatory tactics like charging people more based on age and denying coverage completely due to health status.
However, under the new rule, this lack of federal funding is not the deciding factor. Instead, if a health insurance company offers federally funded products—like Medicare Advantage, Medicaid managed care, or ACA marketplace plans, as many do—Section 1557 would apply to all their plan offerings, including Medigaps.
This would be a major shift, but not a complete solution. In a new blog for the Commonwealth Fund, Medicare Rights explains why, as well as what might happen next. To learn more about these potential changes, read the blog post, “How a New Federal Rule Could Curb Discrimination in Medigap Plans.”
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