A proposed new rule prohibiting health insurers from discriminating against gender identity and sexual orientation seeks to address some insurance coverage barriers that have continued to obstruct access to healthcare for transgender people in the United States
Indeed, many of these barriers to insurance coverage are occurring even after the Biden administration said it would apply the anti-discrimination provisions of the Affordable Care Act (ACA) to issues beyond gender stereotypes.
A patchwork of state initiatives — from categorical restrictions on coverage to mandates for coverage — further complicate the issue for consumers and insurers. Experts and advocates want states to incorporate transgender health coverage in their low-income Medicaid programs and add more explicit guidance over which treatments are “medically necessary” — or conform to accepted standards of medicine.
Section 1557 of the ACA bars healthcare discrimination based on sex, but its interpretation has varied as current and past administrations have sparred over its inclusion of those individuals who identify as transgender or non-binary. The U.S. Department of Health and Human Services (HHS) under former President Donald Trump said it would treat gender discrimination based on the sex assigned at birth and not enforce protections for individuals who identified differently or changed their sex assigned at birth.
Under Biden, the HHS reversed that stance in May and has now proposed formally adding “gender identity” and “sexual orientation” to the interpretation of Section 1557’s prohibition of discrimination based on sex. Advocates hope the prohibition will lead to fewer denials in future.
A Gallup poll estimated transgender people represent about 0.6% of the U.S. adult population.
“If finalized as proposed, the recently published HHS/CMS proposed rule on nondiscrimination based on gender identity and sexual orientation would require health plans covered by these rules (individual market and small group market plans subject to Essential Health Benefits) to cover gender reassignment care. As proposed, these changes would take effect 60 days after being finalized,” said David Allen, spokesperson for industry group America’s Health Insurance Plans (AHIP).
AHIP said insurers have largely covered medically necessary care and preventive services for transgender individuals since Section 1557 took effect in 2017, even though some markets may still be taking time to catch up. Exact coverage usually varies by provider, health plan and local market dynamics.
Patchwork of state laws
Despite the ACA, healthcare coverage for transgender people is usually regulated by individual states — the main regulators of health insurance in the United States. And 27 states and four U.S. territories lack any explicit insurance protections for transgender people, according to the Movement Advancement Project, a nonprofit think tank.
For example, Arkansas specifically permits insurers to refuse gender-confirmation care, such as surgeries to alter physical appearance in line with the patient’s gender identity. Ohio allows providers to deny care and insurers to refuse payment when the services violate their “conscience” or “religious beliefs”. Transgender people in such jurisdictions often depend on insurers to voluntarily comply with the ACA, or forego care altogether, experts said.
The updated interpretation of Section 1557 is expected to result in fewer insurance plans with blanket exclusions for gender-identity related care. However, barriers remain to coverage of gender-transitioning surgeries and complementary care, advocates said.
“Unfortunately, there are still plans that include exclusions that limit access to medically necessary treatment,” said Sharita Gruberg, vice president for the LGBTQ+ Research and Communications Project at the Center for American Progress. “This proposed rule will bring about much needed clarity on the rights of transgender consumers and the responsibilities of insurers.”
About 46% of transgender individuals surveyed said they had been denied coverage in 2020 for gender-affirming care, a study by the policy institute showed. Individuals who are denied claims can appeal to the insurer, complain to the state regulator, call for an independent medical review, or sue the insurer, but the process is time-consuming. Lack of awareness about options and inability to afford health treatments leads to many individuals foregoing necessary care, experts added.
State laws lack guidance on “medically necessary” care
States that prohibit exclusions for coverage of transgender healthcare require insurers to cover care for transgender people as they would for other individuals. Lack of explicit language over what medical treatment and services must be covered, however, has led to denials for treatments considered “cosmetic.”
Treatment for gender dysphoria — in which a person experiences physical and psychological distress due to a mismatch between their biological sex and the gender they identify with — can require gender-transitioning surgery and other care such as hormonal therapy. This can be accompanied by counseling and gender-confirming procedures such as breast reconstruction or facial feminization surgeries.
Transgender people have reported being denied coverage for care such as prostate exams or mammograms because the insurers regarded them as ineligible based on their gender. Individuals have also reported being denied treatments such as voice and hormone therapy or fertility preservation.
Agencies such as the World Professional Association for Transgender Health and the American Psychiatric Association have said that that gender-affirming/confirming treatments and surgical procedures are effective and contribute toward favorable physical and mental health outcomes.
Some states enacted laws that aim to guarantee transgender coverage. Colorado now requires coverage of all gender-affirming care as an “essential health benefit” in marketplace insurance plans. The state of Washington also moved to prevent insurers from imposing “cosmetic”-based exclusions for commonly prescribed gender-affirming treatments.
State insurance-regulator bulletins that clarify the scope of coverage can help, said Sasha Buchert, senior attorney at Lambda Legal, an LGBTQ legal rights advocate. “Having the state come along and categorically clarify that that’s not going to be the practice they’re going to tolerate has been really helpful.”
Medicaid program exclusions
The federal-state Medicaid program plays a crucial role in healthcare access for transgender people, who often have a harder time finding jobs with good health coverage, Buchert said. “When states opt not to expand Medicaid offered by the ACA… a lot of folks have a hard time getting covered even under Medicaid in those in those places,” she added.
States receiving federal funds for their Medicaid expansion programs must comply with Section 1557, but 10 states explicitly exclude gender-confirming care. A dozen states have rejected ACA provisions enabling them to expand their Medicaid programs.
An Iowa court recently ruled that a state law preventing its Medicaid program from covering gender-confirming surgery violated the state’s Civil Rights Act and constitution. Advocates for transgender people’s rights hope related cases in other states, including West Virginia, Arizona, and Wisconsin will see a similar outcome.
Taylor Brown, an attorney in a similar case in Georgia brought by the American Civil Liberties Union, said the Iowa court ruling could be a “good sign.” Brown expressed concern, however, over claim denials for transgender people in states that allow for coverage of transition-related treatment.
Rights advocates are looking to bring a wave of new cases to address these exclusions for coverage of secondary care, Brown said.