Blog Post

How many people will be affected by Supreme Court's Hobby Lobby decision?

June 30, 2014

    Dan Diamond, Managing Editor

    In a 5-4 decision, the Supreme Court on Monday ruled that the federal government cannot compel "closely held corporations" to provide contraception coverage under the Affordable Care Act.

    Specifically, Burwell v. Hobby Lobby turned on the 1993 Religious Freedom Restoration Act (RFRA), which "protects a person's exercise of religion" and had been the focus of oral arguments back in March. Facing off with the Obama administration, Hobby Lobby's lawyers argued that because the ACA's contraception policy went against the personal religious beliefs of the for-profit company's owners, it violated RFRA—and the Court ultimately agreed.

    The ruling frees Hobby Lobby from paying for several contraceptive drugs and devices, including the morning-after pill, that the company's owners found troubling under the ACA's mandate. (Hobby Lobby already doesn't cover these drugs or devices for its 13,000-plus employees, who are spread across 628 stores in 47 states. However, TIME's Kate Pickert notes that the company still pays for most kinds of birth control.) A fellow plaintiff, Conestoga Wood Specialties, also gained an exemption from the contraception mandate.

    Get a summary of Monday's Hobby Lobby decision 

    But how many other Americans will be affected? 



    On the surface, the Court's narrow ruling also seems to have narrow application. HHS already has carved out an accommodation on contraception coverage for not-for-profit employers like hospitals that conceivably will apply here too. And the Supreme Court stressed that its decision didn't extend to other procedures like blood transfusions and vaccines.

    But keep in mind that two years ago, when the Court simultaneously ruled to uphold the ACA's individual mandate yet strike down the mandatory Medicaid expansion, it took a few weeks to fully understand the implications, as an increasing number of states began opting out.

    For instance, somewhere north of 90% of U.S. companies are closely held, which means those owners are newly empowered to make decisions on their employees' contraception coverage. Of course, "90% of companies" doesn't equal "90% of workers"—most of these businesses are awfully small, and as TIME's Pickert writes, they would've escaped the ACA's mandate, anyway. 

    (Like the law's other employer mandates, the contraception policy applies only to employers with more than 50 workers.)

    More realistically, about half of working-age Americans could presumably be affected by the Court's ruling; Census Bureau data suggests that at least 42% of employed Americans worked at family owned businesses in 2007. (Walmart, for instance, is a family owned business). There's no indication that broad changes on contraception coverage are forthcoming, Aaron Blake writes at the Washington Post. Kaiser Family Foundation data suggests that 85% of large employers voluntarily offered contraception coverage before the ACA's mandates took effect—and few companies have signaled that they're planning to follow Hobby Lobby's path.

    Perhaps more importantly, the decision does appear to open the door to future tests. As  experts tell Bloomberg's Alex Wayne, firms may now feel more able to push the boundaries of what benefits and services they're obligated to offer. And that will set up more legal challenges.

    "Courts are going to have to diminish the importance of the right to health care," Aaron Katz, a partner at the Ropes & Gray law firm, told Wayne. "That gets the federal courts in the business of deciding what goods and services the state has a compelling interest in ensuring its citizens have access to."

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