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Health Insurers Must Provide Gender Reassignment – HHS Proposed Rule

Insurance companies will soon be required to offer equal coverage for transgender transition treatment and surgery for children and adults under a proposal rapidly pushed through the federal rulemaking process by the Biden administration.

The period for submission of public comments on the new rule was limited to an unusually short 22 days, much less than the customary 60 days or more.

The anti-discrimination provisions in the Notice of Benefit and Payment Parameters for 2023, the Biden administration’s proposed rule for the government health insurance exchanges under the Affordable Care Act (ACA), were published in the Federal Register by the U.S. Department of Health and Human Services (HHS) on January 5 and would be effective for insurance plans for 2023.

Essentially, the rule reinstates Obama-era language under the ACA’s section 1557, which deals with discrimination. The Trump administration removed sexual orientation and gender identity from the anti-discrimination language, and Biden’s HHS is putting them back in.

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

‘Circumvents the Law’

The language in the rule is vague and could have unintended consequences, says Matthew Eyles, president, and chief executive officer of AHIP, an insurance company trade group, in a letter of comment on January 27.

“The Department’s proposed nondiscrimination framework is overly broad and could create a slippery slope of eliminating benefit limits that are based on clinical evidence, support value-based care, and ensure affordable premiums,” wrote Eyles.

The rule is legally suspect and not founded on science, Jay W. Richards, Ph. D., senior research fellow, and Jared Eckert, research assistant, at the Heritage Foundation, write in an analysis of the proposed rule.

“In fact, the department’s proposed rule circumvents the law and treats dubious treatments as essential health benefits in qualified health plans,” write Richards and Eckert. “This not only contradicts the best science and medicine, it’s a disaster for insurers, for medical providers, and, most of all, for those struggling with gender dysphoria.”

Transitioning Children

Controversy over transgender treatment of children is an issue in Texas and other states.

Texas Attorney General Ken Paxton (R) issued an opinion, which is binding on state employees, that such therapies and surgeries constitute child abuse under current Texas law, on February 18.

Texas Gov. Greg Abbott (R) directed the Texas Department of Family and Protective Services to investigate instances of children undergoing sex-change procedures for child abuse in a letter, on February 22.

“As OAG Opinion No. KP-0401 makes clear, it is already against the law to subject Texas children to a wide variety of elective procedures for gender transitioning, including reassignment surgeries that can cause sterilization, mastectomies, removals of otherwise healthy body parts, and administration of puberty-blocking drugs or supraphysiologic doses of testosterone or estrogen,” said Abbott.

Paxton’s opinion is being challenged by district attorneys representing five of Texas’s most populous counties, who say they will not enforce Abbott’s order.

“In recent days, elected leaders in Texas have launched a cynical and dangerous campaign targeting transgender children and their parents,” said President Joe Biden in a statement published on March 2.

Science Unsettled

The results of medical studies on the effects of gender transition are contradictory or ambiguous, says Linda Gorman, director of the Health Policy Center at the Independent Institute.

“The science is most definitely unsettled with respect to whether transgender surgery helps or harms individuals with gender dysphoria,” said Gorman. “A federal mandate requiring coverage would short-circuit the normal discovery process that occurs when the truth is unknown. In this case, the federal government should refrain from telling insurers what to do until the truth of the matter becomes clearer.”

‘Social Policy Tool’

The Biden transgender initiative is part of a broader effort to force health insurers to pay for what is ultimately social policy, says Merrill Mathews, Ph.D., a resident scholar at the Texas-based Institute for Policy Innovation.

“Liberals have long viewed health insurance as a social policy tool, not just a health care tool,” said Matthews. “That is, they want health insurers to pay for whatever social policy liberals need someone to pay for. So, they keep broadening whatever is considered health care, so they can force health insurers to pay for it.

“Mandating health insurers to pay for certain transgender-transitioning costs is just the latest example,” said Matthews. “If the proposed rule change is allowed to stand, the initial cost impact on health insurance will likely be minimal—primarily because the number of people seeking gender-affirming surgery and other related medical care is still relatively small. But it would grow more quickly once people realize there would be little to no financial barrier to transitioning.”

‘Inhibits Appropriate Therapy’

Many insurers cover treatments specific to transgendered individuals, says health economist Devon Herrick, a policy advisor to The Heartland Institute, which co-publishes Health Care News.

“Dozens of health plans already provide a range of services for gender dysphoria,” said Herrick. “It is not entirely clear what the Biden Administration’s goal is. My guess is political posturing.

  “A risk of politicizing gender dysphoria treatment is the potential for politics to inhibit the appropriate therapy,” said Herrick. “I’ve seen no estimates but many other mandates over the years increased premiums between one and five percent.”

Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

Bonner R Cohen
Bonner R Cohen
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.

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