Appeals Court Confronts Medicaid Gender-Affirming Care Exclusion

Low-income transgender people in West Virginia asked the Fourth Circuit on Tuesday to help ensure that they’ll be able to get medically necessary gender-affirming surgeries by requiring Medicaid to pay for them.

They were met with skepticism by Judges Julius N. Richardson and Allison Jones Rushing, who appeared to be convinced by the state’s argument that the exclusion is justified because it’s based solely on a diagnosis of gender dysphoria, not a patient’s transgender status.

Judge Diana Gribbon Motz was more focused on the medical procedures in question, asking why Medicaid coverage is different based on whether the patient is transgender or cisgender if the procedure is the same.

It’s a case that’s being closely watched nationwide, as it’s emblematic of a conservative backlash that’s threatened the rights of transgender individuals and access to gender-affirming care in several states. Though the West Virginia policy at issue doesn’t ban access itself, it has effectively done so because many transgender people are unable to afford surgery without Medicaid, transgender advocates say.

Blanket Exclusion

On the line is West Virginia’s blanket exclusion on paying for what it terms “transsexual surgery"—procedures such as hysterectomies and vaginoplasties performed to treat gender dysphoria by conforming a person’s physical form with their gender identity .

A federal trial court ordered the state’s Medicaid officials to provide the coverage after finding that the exclusion violates the US Constitution’s equal protection clause and Section 1557 of the Affordable Care Act.

The officials, William Crouch and Cynthia Beane, asked the US Court of Appeals for the Fourth Circuit to overturn the decision. The program doesn’t discriminate against or treat people differently based on their sex, the officials said. It provides the same coverage for transgender and cisgender people when they seek treatments based on the same diagnoses, they said.

Arguing for the officials, Caleb David, of Shuman McCuskey Slicer PLLC in Charleston, W.V., pressed that argument. In fact, West Virginia Medicaid has paid for a hysterectomy for one of the transgender male plaintiffs, based on a diagnosis that would apply to cisgender women, he said.

Motz wasn’t convinced. She asked why a cisgender woman and transgender man wouldn’t be similarly situated for purposes of an equal protection argument when they both seek the same medical care, regardless of the diagnosis. The billing codes would be the same for both procedures, she said.

David agreed, but said that’s an insurance-industry standard that doesn’t use the same criteria as a Medicaid program defining coverage.

The attorney also argued that there is no suspect classification here for purposes of the argument under the US Constitution’s equal protection clause. There are both transgender and cisgender people on both sides of the equation, as not all transgender people have gender dysphoria or even want surgery to treat it, David said.

There also was no evidence that the exclusion is a proxy for invidious discrimination against transgender people, David said.

Tough Questioning

Tara L. Borelli, arguing for the plaintiffs, said the Medicaid exclusion is a solution in search of a problem. State officials adopted it without doing any research or collecting any evidence and have since refused to reconsider its necessity, she said.

The program’s coverage for other types of gender-affirming care—such as hormone treatment—demonstrates the arbitrary nature of the exclusion, Borelli also said. She is with the Lambda Legal Defense & Education Fund.

Borelli faced tough questions from Richardson and Rushing, who pointed out that West Virginia Medicaid refuses to pay for surgeries only when the diagnosis is gender dysphoria. The program would pay for a mastectomy for a transgender man to treat cancer, but wouldn’t pay for breast augmentation surgery for a cisgender woman who wants it to improve her self-image, Richardson said.

That’s not gender dysphoria, Borelli responded. Gender dysphoria is a specific diagnosis that applies only to transgender people, she said. All the surgeries are the same, but the exclusion applies only to particular people, she said.

Rushing brought up David’s classification system, saying there are transgender people on both sides of the equation for equal protection clause purposes. It’s just a smaller class that would want the surgery, she said.

The equal protection clause doesn’t require showing that everyone in a class is affected by the differential treatment, Borelli replied.

In his reply argument, David maintained that the state program has limited resources and must make decisions about allocating them properly. West Virginia Medicaid isn’t obligated to pay for all medical care, even if it’s medically necessary, he said. For example, the program doesn’t pay for treatments for temporomandibular joint syndrome or in-patient adult psychiatric care.

Anna Prakash, of Nichols Kaster PLLP, argued that the Fourth Circuit should uphold the district court’s certification of a class of transgender Medicaid patients.

Three other Fourth Circuit judges heard arguments in January over a different, but similar issue—whether a North Carolina state employee health plan must pay for gender-affirming surgeries.

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