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Proposed insurance rule ignites debate over transgender health care

Some private insurers say the Democratic proposal could drive up costs and its language describing what counts as discrimination is too vague

Rep. Mark Takano waves a transgender pride flag on the House steps on Nov. 17, 2021.
Rep. Mark Takano waves a transgender pride flag on the House steps on Nov. 17, 2021. (Bill Clark/CQ Roll Call file photo)

Private insurance companies, patient advocacy groups and conservative organizations are at odds over a proposal to limit discrimination by health plans for medical care for transgender people and other LGBTQ consumers.

The Biden administration, Democratic lawmakers and advocates say the proposal is essential for ensuring that LGBTQ people can access care, but some private insurers say the policy could drive up costs and the language describing what counts as discrimination is too vague. Meanwhile, conservative advocacy groups argue there is no clinical evidence for covering care that affirms the gender the consumer identifies with, such as hormone blockers or surgery.

The policy is tucked into the Biden administration’s proposed rule for 2023 for the government health insurance exchanges. The rule, known as the Notice of Benefit and Payment Parameters regulation, would require health plans to ensure their benefit designs and implementation do not discriminate based on sexual orientation, gender, age, sociodemographic factors or other conditions.

The Obama administration first used this standard, but President Donald Trump’s administration removed sexual orientation and gender identity from the anti-discrimination language. The Biden proposal would essentially restore and enforce protections for those groups.  

Under the proposal, an insurer in the exchanges would not be considered to provide the essential health benefits required by federal law if that insurer is found to discriminate. Health plan benefit designs also must be based on clinical evidence. All of this would be enforced by state regulators.

A plan would not have to cover every possible health care service, explained Katie Keith, a researcher at Georgetown University’s Center on Health Insurance Reforms. But a plan cannot have a different level policy or plans with more restrictions for transgender people than people whose gender identity and sexual orientation matches their birth gender.

In the rule, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services listed a few examples of presumptive discrimination within a health plan that would be banned, including limiting gender-affirmative care within a health plan. Several state health plans either do not address coverage for gender dysphoria or limit coverage for specific gender-affirming services for transgender people.

“We believe such amendments are warranted in light of the existing trends in health care discrimination and are necessary to better address barriers to health equity for LGBTQI+ individuals,” the proposed rule stated.

Reaction

Most health advocacy groups welcomed the policy, saying it would expand care to those who need it most. Democratic health committee leaders in the House and Senate urged HHS to finalize the rule, saying it would guarantee LGBTQ individuals can access the care they need.

About 56 percent of lesbian, gay and bisexual people and 70 percent of transgender people have reported discrimination in health care, according to the National Health Law Program, an advocacy and litigation organization. This can lead to poor health outcomes as LGBTQ people choose to delay care.

But private health insurers argue the proposal would have negative consequences for private insurance consumers overall.

The America’s Health Insurance Plans trade organization argues that the department’s proposed nondiscrimination framework is overly broad and limits insurers’ abilities to design benefits or plans that control costs. This “could create a slippery slope of eliminating benefit limits that are based on clinical evidence, support value-based care, and ensure affordable premiums,” AHIP wrote in its Jan. 27 comment letter.

The health insurance lobby argues the proposal could restrict issuers’ ability to design benefits that control costs and help consumers manage chronic conditions and could end up making prescription drugs more expensive.

“Establishing a policy that presumes as discriminatory certain formulary placements would undermine issuer efforts to promote medications with higher patient safety results and cost-effective treatments, which will likely increase premium costs for enrollees,” AHIP spokesperson David Allen said.

Carl Schmid, executive director of the HIV+ Hepatitis Policy Institute, a patient advocacy group, said some insurers often put HIV drugs on the highest-cost plan tiers, leading to very high expenses. Under the new proposal, this would count as discrimination.

“It’s not just HIV. It’s other [chronic disease] patients too,” Schmid said.

Other insurers, including the Alliance of Community Health Plans, which represents nonprofit health plans, say CMS isn’t giving insurers enough time to implement these changes. The proposed rule says plans would have 60 days from final publication to make sure their plans complied with the nondiscrimination rules and work with states to assess existing requirements. They suggest an effective date of plan year 2024 or later, rather than in 2023 as proposed.

Conversely, the Association for Community Affiliated Plans, which represents smaller, nonprofit health insurance plans, is all for the new nondiscrimination plan requirements. In its comment letter, the association says many of its member health plans already have committed substantial resources to make sure all patients, including transgender and LGBTQ individuals, can access necessary services.

“We find that their forward-thinking work is — and should be — increasingly the norm,” CEO Margaret Murray said in the association’s Jan. 27 comment letter.

The policy is already igniting conservative backlash over the proposed coverage requirements for insurers.

The Family Research Council’s nine-page comment letter on the proposed rule questions the benefits of gender affirmative care and likens being transgender to having a mental illness.

“[T]hese practices should be put on hold until better evidence exists, but they should certainly not be encouraged through the current proposed rule,” Jennifer Bauwens, director of the Center for Family Studies at Family Research Council, wrote in the council’s comment.

The Heritage Foundation also disputes the validity of gender-affirmative care in its comments on the proposed rule. The foundation’s Jared Eckert argued that some health services for transgender individuals, such as puberty blockers, could be detrimental to a person’s long-term mental health.

Discrimination in insurance signups

Another policy in the rule aimed at limiting discrimination is well-liked by insurers and advocates alike.

The policy under consideration also would ban sexual and gender discrimination when it comes to health insurance signups. In 2020, the Department of Health and Human Services removed sexual orientation and gender identity from the 2010 health care law’s nondiscrimination protections. The new proposal would prohibit marketplaces, brokers and agents from discriminating based on sexual orientation or gender identity.

Like the rules for insurers, CMS rules previously prohibited discrimination in health insurance signups before the Trump administration removed gender identity and sexual orientation from nondiscrimination protections.

Insurers, lawmakers and health care stakeholders all uniformly welcomed this policy reversal, saying the change was overdue and would reduce discrimination in health care.

“This policy will expand access to health coverage, decrease health inequities, and lead to improved outcomes in the LGBTQI+ community,” Democratic health committee leaders in the House and Senate told the Biden administration in their comment letter.

America’s Health Insurance Plans also voiced support for the proposal and urged HHS to finalize this policy as proposed.

“Every American deserves access to high-quality, affordable health care, regardless of race, color, national origin, sex, gender identity, sexual orientation, age, or disability,” AHIP wrote in its comment letter.

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