The state on Wednesday halted insurance coverage of gender reassignment surgery for transgender state workers, noting that a federal judge blocked federal rules requiring such coverage.
Covering gender reassignment surgery and related benefits would have cost $100,000 to $250,000 a year in a $1.5 billion program that provides health benefits to about 250,000 state and local government workers and their dependents, a state consultant said. The estimate assumes two to five people would have used the transgender services per year.
Mark Lamkins, spokesman for the state Department of Employee Trust Funds, said the department couldn’t determine Wednesday if any workers or dependents pursued the benefits in January, when they were available. The services had to be deemed medically necessary.
The Group Insurance Board, which oversees the benefits program, decided in July to add coverage of transgender services in 2017, following advice from its attorneys that federal rules from the Affordable Care Act require the coverage.
In August, the state Department of Justice, at Gov. Scott Walker’s request, asked the board to reconsider. It said the board’s decision was based on “unlawful” rules that “improperly reinterpret” Title IX, which covers discrimination on the basis of sex, as applying to gender identity.
With a federal judge in Texas expected to issue an injunction against the federal rules by the end of December in a case Wisconsin joined, the insurance board called an unusual special meeting on the afternoon of Dec. 30 to revisit its July decision.
The judge didn’t rule that day. The board — after meeting for more than three hours in closed session, with dozens of transgender people and supporters waiting outside the meeting room — voted 7-2 to drop the transgender benefits if four contingencies were met.
The contingencies included a court ruling or administrative action that invalidates the federal rules, compliance with state law, renegotiation of insurance contracts that maintain or reduce premium costs for the state and a final DOJ opinion that says dropping the benefits is not a breach of board duties.
The federal judge, Reed O’Connor of the U.S. District Court for the Northern District of Texas, issued a nationwide preliminary injunction against the federal rules Dec. 31. It also says the rules shouldn’t apply to termination of pregnancy.
DOJ cleared the board of not breaching its duties Jan. 13, according to an ETF memo, dated Jan. 30 and released Tuesday.
The state’s consultant said Jan. 23 that dropping coverage wouldn’t increase program costs, confirming compliance with state law, the ETF memo said. On Tuesday, ETF issued a 2017 contract amendment to health insurance companies telling them to not cover the benefits, effective Feb. 1.
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, with another $7,200 for hormones. Counseling associated with the surgeries costs about $10,000 a year, Segal said.