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Legal Arguments for Transgender Care Reshaping Under Trump

Oct. 1, 2019, 9:32 AM

One of the strongest legal arguments for government coverage of transgender surgery could be demolished if a White House rule changing the definition of sex discrimination goes into effect.

The Affordable Care Act explicitly states that the 1964 Civil Rights Act’s discrimination protections extend to transgender people. A pending Trump rule would roll back that interpretation, saying gender identity isn’t covered under the sex discrimination provision of the law. The administration cited a 2016 district court decision, Franciscan Alliance v. Burwell, that limited the definition of “sex” to biological and anatomical differences as determined at birth.

“If that view prevailed in the health-care setting, that would sharply curtail [things] to say the least,” said Jane Perkins, legal director of the National Health Law Program, which represents plaintiffs suing for coverage.

That decision prohibited the Department of Human Health and Services from enforcing the ACA’s gender protections—although insurers must comply with the provision until it is struck down by a court.

The proposal from the Department of Health and Human Services is almost certain to be challenged once it’s completed. But lawyers say courts may be unwilling to block it without showing actual harm. It’s happened quite recently. A U.S. appeals court in June ruled that the administration’s rule restricting abortion referrals for federally funded health providers shouldn’t be halted because the plaintiffs couldn’t demonstrate they were harmed by it. That case is being reviewed by the full U.S. Court of Appeals for the Ninth Circuit.

Taking away the ACA protections for gender identity would make arguing for gender affirming surgery coverage much more difficult for attorneys representing transgender Medicaid patients.

Medicaid, the low-income health program, is a good option for many transgender people. The LGBTQ community as a whole faces barriers to getting health insurance, according to the American Journal of Public Health. They’re also more likely to be living in poverty and have less money for health care, according to the Williams Institute.

The Obamacare language—known as Section 1557 for the section of the ACA where it’s found—is one of the strongest legal protections for transgender people when arguing for coverage. For example, in August a federal court in Wisconsin ruled the state’s Medicaid had to provide coverage for gender affirming surgeries because its decades-old ban on those procedures violated the ACA.

The ACA “was the first time that sex based protections were explicitly extended to federally funded health-care programs,” said Katie Keith, a health law and policy professor at Georgetown University.

In the rule’s absence, lawyers will need to lean more on various state civil rights laws and a portion of the Medicaid Act that protects from discrimination based on medical condition.

Alternate Approaches

Lawyers already are looking for other avenues. In Iowa, they found it was easiest to rely on a state law. In March, the Iowa Supreme Court ruled that leaving surgery coverage optional for Medicaid providers violated the state’s civil rights law, which added legal protections for transgender people in 2007.

No federal arguments were made in Iowa likely because of strategic reasons, as that would’ve spun the case into a federal court, Abbi Coursolle, a senior attorney at National Health Law Program and a lawyer who represented the plaintiff in Wisconsin, told Bloomberg Law.

State laws vary, but in a place like Iowa with explicit non-discrimination protections, “It was likely their strongest argument,” Keith said.

Lawyers are also referencing the original Medicaid Act, Coursolle said. A section of the 1965 law set up what’s known as the “comparability provision” preventing the federal program from providing fewer and lower quality services for one individual than it does for another similarly situated person.

“For example, it can’t make an exception for what’s covered based off something like a disability,” she said.

Patients seeking gender conforming surgery are pursuing treatment for a mental disability known as gender dysphoria, a potentially crippling condition where someone feels their true gender differs from that assigned as birth.

The federal court in Wisconsin also referenced the comparability provision in their decision, although litigators pointed to the ACA language as the most relevant claim.

Legal Strategies Change

The 1965 Medicaid law alone used to be enough to win coverage for transgender surgeries, according to Coursolle, but “the status of Medicaid litigation has evolved significantly in the last 30, 40 years. Now the courts require you to plead specific violations and provisions of the act instead of just saying this is a violation of the Medicaid act at large.”

In 1980, a federal appeals court ruled in Pinneke v. Preisser that Medicaid had to cover anything that’s a medical necessity, leaving the power to determine what was and what wasn’t up to physicians, not states.

Surgeries are medically necessary to treat gender dysphoria, according to the American Hospital Association.

But a 2002 Supreme Court decision threw cold water on that ruling. It changed the legal health-care landscape even though the case was about educational records. That case, Gonzaga Univ. v. Doe, concluded that there must be explicit proof that Congress intended for a law to create a private right for it to be enforced. Since then, many courts have found the Medicaid provision used to win gender affirming surgery coverage in 1980 is no longer enforceable, as Congress never explicitly created a coverage right.

“Medicaid was founded at a time when there was a wrong, there was a remedy,” Perkins said. Now, courts are looking at whether or not Congress intended for Medicaid to create a right using a test established 40 years after Medicaid was born.

It’s likely why the Obama administration felt the need to clarify what’s included under sex discrimination protections. “It really gets at that issue in a much more direct way,” Coursolle said.

The proposed rule the reverses that effort, returning ambiguity to the law.

That won’t stop advocates from arguing their point. They just may need to get more creative. “I think even if the regulation is gone, advocates are going to point to the statute, or civil rights laws” Keith said.

To contact the reporter on this story: Sam McQuillan in Washington at smcquillan@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com