LGBTQ Legal Issues

Court says state health-care plans can’t exclude gender-affirming surgery

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Max Kadel and Julia McKeown

Max Kadel and Julia McKeown are both plaintiffs in a lawsuit over public health-care coverage restrictions for gender-affirming care. (Lambda Legal)

A federal appellate court in Richmond became the first in the country to rule that state health-care plans must pay for gender-affirming surgeries, a major win for transgender rights amid a nationwide wave of anti-trans activism and legislation.

The decision came from a set of cases out of North Carolina and West Virginia, where state officials argued that their policies were based on cost concerns rather than bias. The U.S. Court of Appeals for the 4th Circuit rejected that argument, saying the plans were discriminating against trans people in need of treatment.

Judge Roger Gregory, writing for the majority, called the restrictions “obviously discriminatory” based on both sex and gender.

It’s the second ruling in favor of trans rights this month from the 4th Circuit, a once-conservative court that has become a trailblazer in the realm of transgender rights. The court was the first to say trans students had a right to use the bathrooms that align with their gender identity and the first to recognize gender dysphoria as a protected disability. Earlier this month, the court said a federally funded middle school could not ban a trans 13-year-old from playing on the girls’ track and field team.

All of these rulings split the appeals court down ideological lines. In a dissent from the ruling Monday, Judge Jay Richardson, a Trump appointee, wrote that there was no role for the federal court in policing what treatments health-care plans decide to cover.

The majority opinion, Richardson wrote, “treats these cases as new fronts upon which this conflict must be waged. But not every battle is part of a larger war. In the majority’s haste to champion plaintiffs’ cause, today’s result oversteps the bounds of the law.”

The ruling could be appealed to the Supreme Court, which recently allowed Idaho to enforce a ban on gender-affirming care for minors. But the conservative-led court has been reluctant to engage on this issue, letting multiple 4th Circuit rulings in favor of transgender rights stand. The court also generally waits until there is disagreement between circuit courts before getting involved.

Other states have banned hormonal treatment and surgery for trans minors; some have restricted care for transgender adults as well. Multiple other states have similar laws against insurance coverage for transition-related treatment.

In West Virginia, transgender Medicaid users challenged the state’s program, which since 2004 has by law banned “transsexual surgeries.” In North Carolina, state employees challenged their coverage, which in 2018 excluded surgical treatment of gender dysphoria—the clinical diagnosis of a disconnect between a person’s gender and birth sex.

Both states insisted that there was no bias in their coverage limitations, only cost concerns; trans patients, they argued, were entitled only to the same health treatments as everyone else but not specialized care.

“There is no service that is covered for a cisgendered person that is not covered for a transgender person meeting the same criteria,” Caleb David, an attorney for West Virginia, told judges on the appellate court during the oral argument. David added that the state had decided to provide psychiatric and hormonal treatment for gender dysphoria—just not surgery.

Advocates for trans patients said there was no medical justification for drawing the line there, when the state would cover such procedures for other conditions. They also said the financial explanation was suspect because so few people get gender-affirming surgery. It’s “a drop in the bucket,” Lambda Legal attorney Tara Borelli said during oral arguments. But even if the cost was significant, she argued, the cost of public health insurance “has to be a shared burden. It can’t be shunted onto the backs of a vulnerable minority group.”

The court agreed, saying cost-cutting could not justify covering the same treatments for health concerns other than gender dysphoria. For example, the court noted, the contested plans covered mastectomies for cancer patients but not for trans women.

North Carolina began covering gender-affirming care in 2017 and stopped the following year, when Republican Dale Folwell became state treasurer. Julia McKeown, a professor at North Carolina State University, accepted her job in 2016, a few years into fully transitioning after a lifetime of “being adamant about what my gender was” but being limited in expressing it. She spent months preparing for surgery, only to be forced to cover the full cost along with all other treatment.

“It’s like having the rug pulled out from under you,” she said. “In some ways worse than going in and knowing it was going to be denied.” She cut into her retirement savings rather than delay the surgery, calling herself “fortunate” to be able to do so.

McKeown grew up in a rural town in Florida and spent years pretending to be a man for fear of social and professional exclusion. Joining the lawsuit meant exposing herself to hate mail from strangers.

“In an ideal world, I would have loved to just move on with my life” after the surgery, she said. “At the same time, I feel a moral obligation to help those who can’t speak up for themselves, and for those who risk being fired or who have dependents on the state health-care plan who need access to treatment.”

Twenty-one Republican-led states asked the court to rule against the plaintiffs, focusing on disagreement over what physical interventions should be available to trans youth. But most major medical plans and the federal government cover gender transition treatment, which has been endorsed by mainstream medical associations. Studies indicate very few people who transition regret doing so or seek to reverse the changes, including those who start treatment in their teens.

Seventeen Democratic-led states and the District of Columbia urged the court to rule for the coverage, saying their “experience demonstrates that protecting access to gender-affirming care improves health outcomes for our transgender residents at little cost.”

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