The reasoning used by the Obama Administration to arrive at its requirement that health plans cover “gender transition” treatments sets a troubling precedent for future de facto coverage mandates.
These stereotypes can include expectations that gender can only be constructed within two distinct opposite and disconnected forms (masculinity and femininity), and that gender cannot be constructed outside of this gender construct (individuals who identify as neither, both, or as a combination of male and female genders). Having thus asserted that “expectations that gender can only be constructed within two distinct opposite and disconnected forms (masculinity and femininity)” is a form of “sex stereotyping,” constituting impermissible discrimination “on the basis of sex,” HHS proceeds to specify in the proposed rule that “a covered entity shall not,” among other things: Otherwise deny or limit coverage, or deny a claim, for specific health services related to gender transition if such denial or limitation results in discrimination against a transgender individual. In other words, any refusal to cover gender transition treatments on the grounds that such treatments are medically inappropriate, or more akin to elective plastic surgery, would constitute prohibited discrimination on the basis of sex.
Even so, HHS claims that its proposed rule “does not require plans to cover any particular benefit or service,” and includes in the rule a subsequent paragraph stating: Nothing in this section is intended to determine, or restrict a covered entity from determining, whether a particular health service is medically necessary or otherwise meets applicable coverage requirements in any individual case. Such disclaimers notwithstanding, the HHS’ discussion of how the rule would operate makes clear that, in reality, it will function as a coverage mandate.
Since the amendments passed, courts have more broadly interpreted “disability,” although they continue to assess each case individually. In fact, the proposed regulation’s definition of disability explicitly “incorporates the definition of disability in the ADA Amendments Act of 2008.”[ 26] Thus, it is not difficult to envision this legal theory being applied to health plans.
The logical path would be to argue that a given medical condition should be considered a “disability,” that an individual with the condition is, therefore, “disabled,” and that, consequently, any coverage exclusion or limitation for a treatment deemed appropriate for the condition by the HHS Office for Civil Rights (or a federal judge) is impermissible “discrimination” against a “disabled” person.
Thus, any insurer that offers, say, Medicare Advantage plans, Medicaid managed-care plans, or ACA exchange plans would be subject to this regulation.