The N.C. State Health Plan has appealed a federal judge’s order that resumed payments for medical treatments, including hormone therapy and surgeries, for transgender individuals.
Judge Loretta Biggs of the Middle District of N.C. ruled June 10 in favor of plaintiffs who included several transgender people or their parents. Biggs’ order required the state’s health plan to resume coverage that day.
The appeal was filed Tuesday in the U.S. Court of Appeals for the Fourth Circuit. State Treasurer Dale Folwell, who oversees the state health plan, is a defendant in the case.
The plan insures more than 750,000 teachers, state employees, the governor, current and former legislators, state university and community college personnel and their dependents, and non-Medicare retirees and their dependents. It is the largest buyer of medical and pharmaceutical services in North Carolina.
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Folwell said the state health plan’s board announced Wednesday that it would no longer exclude treatments connected with “sex transition or modifications.”
Folwell and the health plan board claim Biggs’ order “deprived the Plan of the benefit of a jury trial, where experts could transparently debate whether sex transition operations are or are not medically necessary.”
“We believe the judge’s order is legally incorrect, Folwell said.
Among people potentially affected by the appeal is Stewart Jeffers, who is undergoing gender transition treatments that began in January 2020.
Jeffers, 21, has been covered by the state health plan through his father, Tripp, a former history and philosophy teacher at Parkland High School.
“This is for me to have a better life, and are necessary surgeries and procedures just like any other necessary surgeries and procedures,” said Stewart Jeffers, who underwent a gender-affirming procedure on June 20 at a private medical facility.
However, Biggs’ order did not affect Jeffers’ $8,000 out-of-pocket expense since that bill was due before the June 10 resumption of state health plan coverage for gender transition procedures.
He paid for the procedure with about $5,000 from fundraising efforts and $3,000 in savings.
Stewart expects to benefit from future hormonal treatment procedures that can cost up to $150 per visit. Those treatments started, at once a month, are now every six months and will become once a year around the end of 2022.
He also has been paying for prescriptions out of pocket.
According to a statement from Folwell, the state health plan’s refusal to cover surgical and hormonal treatments related to the diagnosis of gender dysphoria dates back to the 1990s.
In December 2016, Treasurer Janet Cowell and the health plan board voted to allow coverage for a year, citing projected federal regulatory changes.
The board vote took place three weeks before Folwell began his first term as treasurer on Jan. 1, 2017.
The Lambda Legal Defense and Education Fund Inc. and Transgender Legal Defense & Education Fund filed suit in March 2019.
Folwell said he requested Attorney General Josh Stein represent both the state health plan and the UNC System in the lawsuit. Stein chose to represent the UNC System, which eventually settled for an undisclosed amount.
Biggs determined the state health plan’s refusal to cover medical care related to gender transition “discriminates based on sex and transgender status in violation of the Equal Protection Clause of the U.S. Constitution and discriminates because of sex in violation of Title VII” of the federal Civil Rights Act.
“Defendants are … ordered to reinstate coverage for ‘medically necessary services’ for the treatment of gender dysphoria. The issue of damages is reserved for trial.”
Folwell said that “I’ve always said that if the legislature or the courts tell me we have to provide for sex transition operations and treatments, I would.”
N.C. State University professor Julia McKeown, one of the plaintiffs in the 2019 lawsuit, said in a June 10 news release from Lambda Legal that “after years of fighting for fair treatment, finally having a court decide that these health-care exclusions are wrong is vindicating.”
“As government employees, all we want is equal access to health care, but we were denied just because we are transgender.”
Folwell has said his stance on excluding gender transition care from the state health plan is part of his overall effort “to lower health care costs for those that teach, protect and otherwise serve.”
“This case has always been about protecting the authority of the board to sustain the plan for current, future and retired members, and nothing else,” he said.
The Associated Press reported June 10 that the health plan board, when agreeing to cover the medically necessary services for 2017, estimated the annual cost for such coverage would be several hundred thousand dollars.
Biggs wrote that the plaintiffs’ doctors and experts, medical associations and the plan’s third-party administrators agreed that such treatments “can be medically necessary to treat gender dysphoria in some cases.”
Biggs also wrote that “defendants have not submitted any admissible evidence to refute that these treatments were ‘medically necessary,’ and it appears both NCSHP and Blue Cross agree that they would have been covered in absence of the exclusion.
“Defendants’ belief that gender-affirming care is ineffective and unnecessary is simply not supported by the record.”
Tripp Jeffers said his son was covered by the state health plan for most health procedures, but was excluded from coverage of his transition procedures.
“He had to raise thousands of dollars on his own, because the state treated him like he wasn’t a real patient,” Tripp Jeffers said. “That’s unfair.”
Tripp Jeffers said the judge’s ruling is “is a victory for families who deal with this discrimination on a daily basis.”
“Dale Folwell defends this discriminatory practice as a so-called cost-saving measure, but that doesn’t explain why educators and other state employees have had to pay premiums under his tenure for health insurance that was provided for free to employees prior to his election,” Tripp Jeffers said.
Tripp Jeffers began work in June for the N.C. Association of Educators as a labor-management consultant and says, “The flawed state health care plan is one of many reasons I have left the classroom after 28 years.”