Tuesday Update

A federal district judge has dismissed the two lawsuits that were filed in reaction to the OPM data breach. In a 74 page long decision, which the FEHBlog has perused, the Court held that the plaintiff federal employee unions and affected federal employees had not demonstrated constitutional standing to bring a lawsuit over the data breaches. The Court explained that

“The judiciary does not operate as a freestanding advisory board that can opine about the conduct of the executive branch as a general matter or oversee how it manages its internal operations. The Court’s authority is derived from Article III of the U.S. Constitution, and a federal court may only consider live cases or controversies based on events that caused actual injuries or created real threats of imminent harm to the particular individuals who brought the case. In other words, before a court may proceed to the merits of any claim, the plaintiffs must demonstrate that they have constitutional “standing” to sue. Also, a court may not entertain an action against the United States if the government has not expressly waived its sovereign immunity, that is, unless it has given its consent to be sued in that particular situation. And once a plaintiff overcomes those hurdles, he or she must state a valid legal claim.”

The Court declined to recognize that a data breach standing alone is a cognizable injury for standing purposes. The Court required that the breach be coupled with an injury in fact, e.g., an unreimbursed financial loss. Although two out of 38 plaintiffs showed a loss, those plaintiffs could not, in the Court’s opinion, demonstrates a connection between the data breach and that injury as the OPM breach did not extend to credit card numbers for example and the apparent thief was a state actor, China, not Tony Soprano. In sum, case dismissed for lack of standing. The Court also threw cold water on the claims that plaintiffs asserted.

The Court was sympathetic to the plaintiffs but the law is not grounded in sympathy. Perhaps the plaintiffs should look to Congress. No doubt the plaintiffs will appeal to the U.S. Court of Appeals for the D.C. Circuit.

Speaking of Congress, the Hill reports that Senate Health Education Labor and Pensions Chairman Lamar Alexander (R Tenn) has called off his effort to craft a bipartisan ACA fix with Sen. Patty Murray (D Wash.).  Sen Lindsay Graham is predicting, again according to the Hill, that the Graham- Cassidy ACA repeal and replace bill will receive 50 votes in the Senate which together with Vice President Pence’s vote would lead to Senate passage of the bill which must occur before October 1 under the budget reconciliation rules. The House is expected to pass the bill if it passes the Senate and the President has signalled that he will sign it.

The Graham-Cassidy bill would devolve ACA authority and funding from the federal to the state governments; it would make high deductible plans with health savings accounts more appealing; it would repeal the ACA’s individual and employer mandates as of last year, and it would repeal the medical device tax. Here are a link to FAQs and a link to the section by section analysis.

In other news:

  • Walgreen’s received modified regulatory approval of certain Rite Aid assets. The Wall Street Journal reports that 

“Walgreens will now buy 1,932 Rite Aid stores for $4.38 billion, a far cry from the original $9.4 billion deal for about 4,600 stores struck in 2015.  Rite Aid will continue as a stand-alone company, operating about 2,600 stores, six distribution centers and its pharmacy-benefit manager, EnvisionRx. Its chief executive, John Standley, said on Tuesday the sale provides the company with a “more profitable store footprint” and stronger balance sheet as it engineers a turnaround.
The Federal Trade Commission spent roughly 18 months investigating the companies’ broader plan to merge and harbored an array of concerns about the effect on competition. In the face of continued FTC objections, the two companies scrapped their merger plans in June, agreeing instead that Walgreens would settle for acquiring about 2,200 Rite Aid stores.
After further discussions with the FTC, the companies dropped about 250 more stores from the transaction, Rite Aid said Tuesday. Walgreens will gain stores located primarily in northeastern and southern U.S.”

The transition of the 1,932 Rite Aid stores to Walgreen’s stores will begin next month.

“Annual premiums [sum of employer and employee contributions] rose 3% to $18,764 for an employer plan in 2017, from $18,142 last year, the same rate of increase as in 2016, according to an annual poll of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.

The trend of relatively gradual premium increases has continued for several years, with the growth of premiums damped by a shift toward bigger out-of-pocket costs for employees in the form of high deductibles—a move that slowed this year, as average deductibles were roughly flat compared with 2016.”

This reminds the FEHBlog that if history is a guide, OPM will announce 2018 FEHB plan premiums next week!

 

 

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