Medicaid Gender Surgery Exclusion to Get Fourth Circuit Look

The US Court of Appeals for the Fourth Circuit will hear oral arguments Tuesday on whether West Virginia’s Medicaid program can lawfully refuse to pay for gender-affirming surgeries.

The case focuses on a small part of the national political debate over whether states can remove or limit access to health care for transgender people—here, by making it impossible for them to afford treatments they say are medically necessary.

West Virginia’s program pays for some gender-affirming care, but it draws the line at paying for such surgeries as hysterectomies and vaginoplasties intended to conform transgender patients’ physical characteristics to their gender identities.

The transgender plaintiffs argued that the ban unconstitutionally discriminates on the basis of sex in violation of the US Constitution’s equal protection clause by treating transgender people differently than cisgender people, for whom Medicaid will pay for the same surgeries when required for different medical reasons. A lower court agreed with the plaintiffs, holding that the exclusion is unconstitutional and that it violates Section 1557 of the Affordable Care Act.

The state officials who administer the program said transgender and cisgender people aren’t similarly situated under the equal protection clause, because they need the treatments for different medical conditions. The exclusion is based on the diagnosis, not a person’s sex, they said.

For example, Medicaid would pay for a hysterectomy for a person diagnosed with uterine cancer whether that person was a woman or a transgender man.

Cases Favor Plaintiffs

Case law currently favors the transgender plaintiffs, Christy Mallory, legal director of the Williams Institute at UCLA School of Law, told Bloomberg Law. The Williams Institute conducts independent research on sexual orientation, gender identity law, and public policy.

Several federal courts have found blanket denials of coverage for transgender-related care illegal in both the Medicaid and state employee health plan context, Mallory said. There’s nothing new or novel about the West Virginia case, she said. She doesn’t expect any surprises during oral arguments.

The only outlier, so far, is the US District Court for the Northern District of Florida, which didn’t block an administrative rule banning Medicaid pay for gender-affirming surgery. A trial there is set for May.

State law and constitutional protections also have been interpreted to apply to transgender people, Mallory said. For example, an Iowa court recently held that the state constitution’s equal protection clause and Iowa’s civil rights act precluded Medicaid exclusions.

The Iowa Supreme Court heard oral arguments in the case in January, after having previously struck down an earlier version of the policy.

The current anti-transgender backlash may give rise to more lawsuits, but it shouldn’t affect this case, Mallory also said.

Changes Coming?

But the plaintiffs are facing stiff headwinds, as conservatives are fighting back against the view that federal protections against sex discrimination apply to gender identity and transgender status.

The basic debate is “what is sex,” Jon Schweppe told Bloomberg Law. For conservatives, it’s the gender with which a person was born, he said. Schweppe is policy director for American Principles Project, an organization that says its mission is to campaign and advocate on behalf of the family.

The group disputes that the equal protection clause protects gender identity, he said.

Additionally, consistent with the position taken by West Virginia in a friend of the court brief supporting its health department officials, APP supports the view that decisions about what Medicaid should cover ought to be made by the states, Schweppe said.

Schweppe also said that West Virginia’s exclusion doesn’t treat people differently based on sex. Medicaid would pay for a hysterectomy for a person diagnosed with uterine cancer whether that person was a woman or a transgender man, he said.

What’s at Stake?

About 276,000 transgender people are enrolled in Medicaid throughout the country, according to a Williams Institute study. But there’s a “patchwork” of laws and policies that define whether those who want it can afford to get gender-affirming care, it said.

Twenty-five states plus Washington, D.C., expressly cover the treatments. This coverage is “extremely important,” because these people don’t have the means to access and pay for gender-affirming care any other way, Mallory said.

Every major medical group, moreover, has argued in favor of states providing such coverage. The lack of a means to pay for medically necessary gender dysphoria care only exacerbates health-care problems, a coalition led by the American Medical Association said in a fried of the court brief supporting the plaintiffs.

Seven states—Arizona, Florida, Missouri, Nebraska, South Carolina, Tennessee, and Texas—specifically exclude coverage for gender-affirming care from their Medicaid programs, and Schweppe expects that number to grow.

Fourteen states have no official policy, according to the Williams Institute. Hawaii, Ohio, and Wyoming have policies excluding coverage that aren’t being enforced, and West Virginia is currently prohibited from enforcing its exclusion, the study said.

The Fourth Circuit will announce which judges will hear the case on the morning of the oral argument.

Shuman McCuskey Slicer PLLC represents William Crouch and Cynthia Beane, the West Virginia officials defending the policy. Employment Law Center, Lambda Legal Defense & Education Fund Inc., and Nichols Kaster PLLP represent the plaintiffs.

The case is Fain v. Crouch, 4th Cir., No. 22-1927, oral arguments scheduled 3/7/23.