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Rowan Calyx and Brittyn Calyx

Rowan Calyx, left, and Brittyn Calyx, a transgender couple who got health insurance through Rowan's job at UW-Madison, are shown in December 2016. They said they wanted to get gender reassignment surgery and wished the state would cover it for state workers.

The Group Insurance Board, which allowed coverage of gender reassignment surgery for state workers for a month in early 2017 before reversing its decision, is expected to take up the issue again Wednesday.

The renewed consideration comes after two transgender state workers sued the state last year for not having the coverage, and a judge ruled last month that the state can’t bar the use of Medicaid funds to pay for the surgery.

This month, chancellors at UW-Madison and five other UW campuses asked the board to restore the coverage, saying four Big Ten campuses offer it.

UnitedHealthcare, which is starting a Medicare Advantage program for state workers and retirees, told the state its lack of coverage for transgender medical services would cause the company to be out of compliance with federal Medicare rules.

“The legal landscape regarding transgender health care and transgender rights generally has developed further” since December 2016, the last time the insurance board ruled on the issue, according to a Department of Employee Trust Funds memo to the board last week.

ETF’s three largest insurers — Dean Health Plan, WEA Trust and Quartz, which includes Unity, Gundersen Health Plan and Physicians Plus — have started allowing transgender services in their non-state worker business, the memo said.

State worker programs in neighboring states cover transgender services, with restrictions in some cases, the memo said.

The memo, from Renee Walk, a strategic health policy adviser at ETF, said the insurance board could choose to cover the services if doctors consider them medically necessary for particular patients, an arrangement similar to coverage of organ transplants. The board could cover hormones and certain surgeries only, or allow coverage of transgender services only for the Medicare Advantage program.

Other options are keeping the ban or requesting more information from ETF.

Gender reassignment surgery and related services were not covered for state workers until the insurance board ended a ban on the coverage in July 2016, effective Jan. 1, 2017. ETF attorneys said the coverage was required by federal rules stemming from the Affordable Care Act.

In August 2016, the state Department of Justice, at Gov. Scott Walker’s request, asked the board to reconsider, saying the “unlawful” federal rules “improperly interpret” Title IX, which covers discrimination on the basis of sex, as applying to gender identity.

On Dec. 30, 2016, the governor-controlled insurance board held a special meeting, convening in closed session for more than three hours, with dozens of transgender people and supporters waiting outside.

The board decided the coverage, starting two days later, would end if certain legal developments occurred. Four contingencies, including a court ruling invalidating the federal rules, were met Feb. 1, 2017, and the coverage stopped.

In April 2017, the ACLU sued the state on behalf of two UW-Madison employees transitioning to female, saying the lack of coverage is sex discrimination. The case, involving plaintiffs Alina Boyden and Shannon Andrews, is scheduled for trial in October in U.S. District Court in Madison.

Last month, U.S. District Judge William Conley granted an injunction to two low-income Wisconsin residents — Cody Flack, a transgender man from Green Bay, and Sara Ann McKenzie, a transgender woman from Baraboo — blocking the state Department of Health Services from barring the use of state Medicaid funds for gender reassignment surgery.

An Aug. 8 letter from the six UW chancellors said the lack of coverage “jeopardizes our ability to attract top academic and research talent and puts us at a serious disadvantage retaining our LGBTQ employees.”

At UW Hospital, Dr. Katherine Gast became the first surgeon at UW to offer the full range of transgender surgeries when she started in August 2017, with the goal of establishing a comprehensive gender services program.

A state consultant said last year that coverage of gender reassignment surgery and related benefits in the $1.5 billion state worker program would cost $100,000 to $250,000 a year, assuming two to five people per year would use the services.

The consultant, Segal Consulting, said male-to-female surgery costs about $28,000, with an additional $3,600 for hormone therapy, and female-to-male surgery costs about $56,000, plus $7,200 for hormones. Counseling associated with the surgeries costs about $10,000 a year, Segal said.

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David Wahlberg is the health and medicine reporter for the Wisconsin State Journal.