Health Insurance Company Fined $200K for Denying Care to Trans People

An investigation by the California Department of Managed Health Care, which oversees HMO plans in the state, concluded in July that insurance company Health Net discriminated against seven of its customers who sought gender transition-related care, the San Francisco Chronicle reports.

Healthcare services denied to the patients from 2013 to 2015 included medical consultations, testosterone injections, bilateral mastectomy, facial feminization surgery, and gender reassignment surgery, according to a letter of agreement signed by both the department's office of enforcement and a Health Net representative. In at least three of the seven cases, Health Net denied coverage specifically because the person was seeking a "sex change." Three people were denied coverage because Health Net considered the procedures sought to be cosmetic in nature; in two of these cases patients were denied coverage for any procedure or service other than gender reassignment surgery.

The company will be forced to pay a $200,000 fine as well as confirm that its health plans are in compliance with state law by September 30. The company will also evaluate whether it should reimburse out-of-pocket medical costs paid by the patients because their procedures weren't covered. At the time this story was published, Health Net had not responded to multiple requests for comment.

According to a DMHC spokesperson, this is the first enforcement action levied against an insurer for violating the state's Insurance Gender Nondiscrimination Act (passed in 2006 and fully enacted in 2012), which prohibits health plans from "discriminating against individuals because of the individual's gender, including gender identity or gender expression."

California was the first state to enact laws barring the blanket exclusion of coverage for services related to gender transition in 2012, according to the Transgender Law Center. In the years since, 15 other states have passed or issued similar statutes and directives. Just this Wednesday, New York Governor Andrew Cuomo directed his administration to issue a letter to state insurers explicitly forbidding them from denying coverage to trans patients because of coding issues (eg denying a prostate cancer screening for a trans woman because the insurance company has the patient listed in its records as a woman).

In dictating how the California insurer should treat transgender patients from now on, the department made clear that all requests for coverage should be evaluated on a case by case basis, and that surgeries "historically considered 'cosmetic'" should be seen differently when recommended for people seeking to transition. Medical and health care organizations alike, such as the World Professional Association for Transgender Health, have endorsed gender reassignment surgery and related procedures as medically necessary and beneficial for willing patients with gender dysphoria. The American Medical Association says insurers should cover treatment options that a patient and their doctor consider appropriate.

In July, the US House of Representatives voted down a measure that would have banned coverage of transition-related care for military personnel. President Donald Trump later tweeted that he wanted to ban transgender people from military service altogether and though the status of such a policy remains unclear, Broadly exclusively reported that one trans service member's surgical procedure was abruptly canceled this week.

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