A federal judge on Tuesday said that a state rule that excludes health insurance coverage for medically necessary gender reassignment surgery is sex discrimination under federal law.
Ruling in a lawsuit brought by two UW-Madison employees who are transitioning to female, U.S. District Judge William Conley said the rule set by the state Group Insurance Board (GIB), which excludes coverage for gender transition-related care, violates a federal prohibition on discrimination on the basis of sex under the federal Civil Rights Act.
He said the exclusion also violates an anti-discrimination provision of the Patient Protection and Affordable Care Act.
Last month, the GIB reversed course and voted 5-4 to cover gender-confirmation surgery and related services, but the lawsuit continued nonetheless. Services would be covered starting Jan. 1.
Conley made a similar ruling in July in a separate case involving a rule that bars use of state Medicaid funds for gender-confirming surgery for people diagnosed with gender dysphoria, a medically recognized condition defined as the distress felt by the discrepancy between the gender that a person identifies as and their birth gender.
In that case, Conley issued a preliminary injunction barring enforcement of a rule that kept two Medicaid recipients diagnosed with gender dysphoria from receiving gender-confirming surgery. The state Department of Justice has appealed that ruling.
In his ruling Tuesday, Conley said the next steps — what remedies will be available to plaintiffs Alina Boyden and Shannon Andrews — will be determined at a later date, possibly after a jury trial that is set to begin Oct. 9.
Larry Dupuis, legal director of the American Civil Liberties Union of Wisconsin, which brought the lawsuit on behalf of Boyden and Andrews, said Conley’s decision was not surprising given his ruling in the Medicaid case, but he said the ruling “confirms that in another context (the exclusion rule) violates non-discriminatory concepts in the Constitution.”
He said that at some point it’s likely that Conley will issue an injunction barring the exclusion from being enforced. Other issues, such as compensatory or punitive damages, would also be determined later. Among the damages to be sought is compensation for surgery Andrews already received that she paid for out of pocket. Her claims for coverage were denied.
GIB voted in July 2016 to drop the exclusion and was to begin allowing coverage for transition-related care in January 2017. Then in August 2016, the state Department of Justice asked GIB to reinstate the exclusion, arguing that federal rules improperly interpreted sex discrimination as applying to gender identity.
According to Conley’s ruling, the state argued that the cost of providing coverage and the safety or efficacy of gender-confirming surgery and hormone therapy were the reasons for reinstating the exclusion.
But Conley said there appeared to be no dispute that the cost was “immaterial” at 0.1 to 0.2 percent of the total cost of providing health insurance to state workers. He wrote that the record in the case showed cost was barely discussed by GIB as a reason for reinstating the exclusion.
A state consultant said last year that coverage of gender-confirmation surgery and related benefits would cost $100,000 to $250,000 per year, assuming two to five people were to use the services.
“Not only is the record devoid of any evidence to show that GIB members voted as they did for cost or efficacy reasons,” Conley wrote, “the evidence is overwhelming that the actual or genuine reason for the reinstatement had to do with the DOJ’s guidance,” specifically a belief by DOJ that an injunction issued by a court in Texas “absolved defendants of any legal obligation to provide coverage.”
In a court filing, DOJ disagreed that any advice it offered was the reason for reinstatement of the exclusion, Conley wrote, instead insisting that cost and efficacy were the reasons.
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