Court rules transgender care policies as ‘obviously discriminatory’

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A federal appeals court has ruled that state health care plans and any government-funded insurance programs may not exclude coverage for gender-affirming medical care. The 4th U.S. Circuit Court of Appeals ruled 8-6 ordering North Carolina and West Virginia to disband any policies that exclude coverage for gender-affirming care. North Carolina’s state health plan does not cover treatment “in connection with sex changes or modifications and related care.” The Medicaid program in West Virginia only covers some gender-affirming treatments, like hormones, but not all, like surgery.

The arguments presented to the court by attorneys for both North Carolina and West Virginia asserted that their state’s policies were wholly related to the costs involved and “not animus toward transgender people.” But Judge Roger Gregory, writing for the majority April 29, said the states’ restrictions are “obviously discriminatory.”

In a majority opinion, Gregory wrote, “These two cases present the same question: Do healthcare plans that cover medically necessary treatments for certain diagnoses but bar coverage of those same medically necessary treatments for a diagnosis unique to transgender patients violate either the Equal Protection Clause or other provisions of federal law? We hold that they do, and therefore affirm the judgments of the district courts.”

Gregory wrote, “Because we hold that the coverage exclusions facially discriminate on the basis of sex and gender identity, and are not substantially related to an important government interest, we affirm the district courts.”

Gregory also wrote, “We further hold that the West Virginia exclusion violates the Medicaid Act and the Affordable Care Act.”

First filed in 2019 by Lambda Legal and the Transgender Legal Defense & Education Fund (TLDEF) on behalf of eight current and former state employees and their dependents, the North Carolina lawsuit challenges the North Carolina State Health Plan (NCSHP) for “categorically depriving” transgender people of access to gender-affirming care.

The NCSHP had denied those enrolled in the plan of coverage for care including counseling, hormone therapy, surgery and “any other health care provided in relation to a person’s transgender status and/or gender transition,” according to the lawsuit.

In that original suit, decided in June 2022, U.S. District Judge Loretta C. Biggs wrote in her decision, “Defendants’ belief that gender affirming care is ineffective and unnecessary is simply not supported by the record. Consequently, their categorical sex and transgender-based exclusion of gender affirming treatments from coverage unlawfully discriminates against Plaintiffs.”

Biggs ruled that North Carolina’s health plan and state employees had violated both the Equal Protection Clause of the U.S. Constitution and Title VII of the Civil Rights Act of 1964 by “unlawfully discriminating based on sex and transgender status” and attempting to “create scientific controversy” about the efficacy of gender-affirming care.

According to Biggs, the suit’s defendants, identified as North Carolina State Treasurer Dale Folwell, Executive Administrator of the NCSHP Dee Jones, as well as several state employers, had tried to discredit mainstream science through testimony from “experts who mix their scientific analysis with hypothetical speculation and political hyperbole.”

Biggs wrote, “Issues surrounding transgender healthcare evoke strong emotional and political opinions,”. “But politics and emotion are not admissible as evidence in a court of law. Plaintiffs’ doctors, their experts, every major medical association, and Defendants’ own third-party administrators all agree that, in certain cases, gender affirming medical and surgical care can be medically necessary to treat gender dysphoria.”

In August 2022, a different court ruled that West Virginia’s Medicaid program must provide coverage for care. District Court Judge Robert C. Chambers wrote that West Virginia Medicaid’s refusal to cover gender-affirming surgeries for the treatment of gender dysphoria “invidiously discriminates on the basis of sex and transgender status.”

Chambers said the categorical exclusion of transgender health care violated the equal protection clause of the 14th Amendment, the Affordable Care Act and the Medicaid Act.

The ruling from Chambers was a response to a 2020 class action lawsuit filed by Lambda Legal on behalf of two transgender men denied coverage for gender-affirming medical care under the West Virginia’s Medicaid program and West Virginia’s state employee health plan.

Lambda’s lawsuit argued that there was “intentional exclusion” of coverage for transgender health care and that this presented an “unmistakable” exclusion, particularly considering that hormone therapy was covered under Medicaid for cisgender patients who were not using them for “gender transition procedures.”

Among those, the lawsuit states, “For example, the Program covers mastectomies to treat cancer, but not to treat gender dysphoria; breast-reduction surgery to treat excess breast tissue in cisgender men, but not to treat gender dysphoria in transgender men; and chest-reconstruction surgery for cisgender women post-mastectomy, but not for gender dysphoria in transgender women.”

Christopher Fain, a plaintiff in the suit, had said in 2022 that the decision represented a victory not just for himself but for transgender Medicaid beneficiaries across West Virginia. Fain said, “Transgender West Virginians should never feel as if our lives are worth less than others.”

The 4th U.S. Circuit Court of Appeals affirms those two lower court rulings.

Lambda Legal Senior Counsel Tara Borelli, the lead lawyer on both lawsuits, said, “We are pleased with the Court’s decision, which will save lives.”

Borelli said, “It confirms that discriminating against transgender people by denying critical medical care is not only wrong but unconstitutional. No one should be denied essential health care, but our clients in both cases were denied coverage for medically necessary care prescribed by their doctors just because they’re transgender.”

Plaintiff Shauntae Anderson, a Black transgender woman and West Virginia Medicaid participant said, “West Virginia’s denial of medically necessary care just because of who I am was deeply dehumanizing. I am so relieved that this court ruling puts us one step closer to the day when Medicaid can no longer deny transgender West Virginians access to the essential healthcare that our doctors say is necessary for us.” 

Lambda Legal Counsel and Health Care Strategist Omar Gonzalez-Pagan said, “The court’s decision sends a clear message that gender-affirming care is critical medical care for transgender people and that denying it is harmful and unlawful. Overwhelming research has found that gender-affirming care significantly improves the overall health and well-being of transgender people, both youth and adults.”

He added, “By contrast, denying access to this care has detrimental effects on the health of trans people, which can include worsening dysphoria, depression, anxiety and even self-harm. We hope this decision makes it clear to policy makers across the country that health care decisions belong to patients, their families, and their doctors, not to politicians.”

Patrick Morrisey, West Virginia’s GOP attorney general, said in a statement, “Decisions like this one, from a court dominated by Obama- and Biden-appointees, cannot stand: we’ll take this up to the Supreme Court and win.”

He said, “This is a significant case to bring to the Supreme Court, and it will potentially set precedent for the entire country.”

Morrisey, who is currently campaigning for governor of West Virginia, said he also plans to appeal a separate 4th Circuit ruling blocking the state from enforcing its restrictions on transgender student-athletes to the Supreme Court.

North Carolina State Treasurer Dale Folwell, a Republican named in the lawsuit, oversees the state’s health plan. Folwell said the 4th Circuit decision was “untethered to the reality” of the fiscal issues facing the state and said the plan is “facing the real risk of looming insolvency.”

In a statement, Folwell said, “Accordingly, the Plan cannot be everything for everyone. Our priority is to provide coverage that does the most good for the highest number of people with the finite resources we have available.”

Lambda Legal said, “This ruling sets a clear precedent not just for North Carolina and West Virginia but to all jurisdictions within the Fourth Circuit, including South Carolina, where legislators are considering a discriminatory healthcare ban.”  Twenty-four states since 2021 have banned treatments for transgender youths, according to the Movement Advancement Project, a nonprofit that tracks LGBTQ laws, and legislation in some states also restricts access to care for adults.

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