Antidiscrimination Litigation in Transition-Related Health Care

Since the passage of the Affordable Care Act (ACA), there has been significant litigation about it. The U.S. Supreme Court famously dealt with the ACA’s individual mandate, and federal circuit and district courts have heard hundreds of lawsuits about the ACA, ranging from coverage of preexisting conditions to the refundable premium tax credit.

One area of increasing ACA-related litigation—and diverging circuit court opinions—is litigation about the rules against discrimination when providing health care. Specifically, courts across the country are addressing litigation challenging measures taken to limit or eliminate health care for transgender individuals. Litigators addressing such disputes must incorporate into their arguments not only the complex legislative history behind the ACA but also a growing number of transition-related lawsuits.

Statutory History: Antidiscrimination Statutes

Congress passed Title IX as part of the Education Amendments of 1972. Pub. Law No. 92-318, 86 Stat. 235 (June 23, 1972) (codified at 20 U.S.C.C. §§ 1681–1688). The verbiage of the statute seemed clear: “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” The phrase on the basis of sex became not only a rallying call for gender equality but also the subject of many groundbreaking Supreme Court cases paving the road for women’s equality. Moreover, it facilitated other antidiscrimination statutes throughout the 1970s.

Fast-forward to March 23, 2010, when President Obama signed the ACA into law. Among its complex regulations, the ACA explicitly applied existing antidiscrimination legislation, including Title IX, to the health-care context. To clarify the existing nondiscrimination statutes, the Department of Health and Human Services (HHS) has promulgated rules as a means of guidance on how to implement and enforce the ACA. The nondiscrimination provisions of the ACA and one specific HHS rule have led to a number of lawsuits across the country and have created a battleground for the question of whether transgender individuals may legally be denied health care on the basis of their gender identity. Thus, ongoing litigation demonstrates that the phrase on the basis of sex is not as clear as it may seem.

Section 1557 of the ACA prohibits discrimination in the provision of health care:

[A]n individual shall not, on the ground prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) [Title VI], title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) [Title IX], the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) [ADA], or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) [section 504], be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance. . . .”

42 U.S.C. § 18116(a). Despite the novelty of the ACA and section 1557 in particular, this provision did not actually create any new rules prohibiting discrimination. Rather, it codifies protections that already existed in some of the most long-standing nondiscrimination federal statutes: Title VI, Title IX, the ADA, and section 504.

For its part, the HHS attempted to clarify section 1557 through the promulgation of a rule entitled “Nondiscrimination in Health Programs & Activities” (Rule). 81 Fed. Reg. 31,376–31,473 (May 18, 2016) (codified at 45 C.F.R. § 92). Unlike the underlying statute, the Rule explicitly specifies that discrimination on the basis of sex includes “termination of pregnancy” and “gender identity.” 45 C.F.R. § 92.4. Moreover, the Rule defines gender identity as “an individual’s internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual’s sex assigned at birth” and explains that the “gender identity spectrum includes an array of possible gender identities beyond male and female.” 81 Fed. Reg. at 31,392. Simply put, the Rule prohibits insurance companies, states, employers, and others from excluding transition-related health services from insurance plans.

Like many other aspects of the ACA, however, this provision against discrimination has been challenged repeatedly by groups opposed to providing care for trans people. Almost immediately, states and private organizations challenged section 1557 and the Rule, arguing that trans people are not a protected class under the law.

Case History: Sex and Gender

In 2016, eight states banded together with several private, religious health-care providers to challenge the applicability of the Rule, arguing that the protections of section 1557 did not include protections for transgendered individuals. The Texas court, in its ruling on the states’ motion for preliminary injunction, sided squarely against trans people. Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660 (N.D. Tex. 2016). In denying Chevron deference to the HHS’s interpretation of the text of section 1557, the court held that “the meaning of sex in Title IX unambiguously refers to the biological and anatomical differences between male and female students as determined at their birth.” Id. at 687 (internal quotations omitted). Because the Rule defined sex not only as biological differences but also as termination of pregnancy and gender identity, the court held that the HHS revised the definition of sex as incorporated into Title IX. Id. For the Texas court, it was clear that on the basis of sex, as originally written in 1972 and then reincorporated into the ACA, prohibited discrimination on the basis of a “binary definition of sex”— that is, biologically male or female. Id. at 668 (internal quotations omitted). The court went on to discuss other issues, including whether prohibiting discrimination on the basis of gender identity violated the Religious Freedom Restoration Act, and concluded by instituting a nationwide injunction on the implementation of the Rule.

One year later, a similar issue arose in California, but the court in that case concluded that the application of the Rule was immaterial because section 1557 itself prohibited such gender identity discrimination. Prescott v. Rady Children’s Hosp.—San Diego, 265 F. Supp. 3d 1090 (S.D. Cal. 2017). In coming to its conclusion, the court echoed the Texas court, noting that the protections in section 1557 were based on existing statutes, including Title IX. However, the court went on to cite U.S. Supreme Court cases that held that federal courts look to Title VII cases for guidance on Title IX claims. Id. at 1098 (citing Franklin v. Gwinnett Cty. Pub. Sch., 503 U.S. 60 (1992) and others). Using Title VII precedent, the court noted that sex has routinely been defined as encompassing both sex—that is, the dichotomy of male and female adopted by the Texas court—and gender. Id. (citing Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)). The California court also cited cases from the First, Sixth, Seventh, Ninth, and Eleventh Circuits to support the claim that discrimination against transgendered individuals is prohibited by Title VII and Title IX and, consequently, by the ACA.

Similarly, in 2017, the Seventh Circuit ruled in Whitaker v. Kenosha Unified School District that discrimination based on gender identity fell under the term sex as used in Title VII and Title IX. 858 F.3d 1034 (7th Cir. 2017). Although Whitaker did not involve the ACA or the application of the HHS Rule, it relied on substantial Title VII and Title IX cases to hold that sex discrimination includes sex stereotyping—that is, “the disparate treatment of men and women resulting from sex stereotypes.” Id. at 1047 (quoting Price Waterhouse, 490 U.S. at 251). The court in Whitaker exhaustively provided holdings from district courts and circuit courts from across the country that underscored the right of a trans person to bring a Title VII or Title IX claim for discrimination based on sex stereotyping. Id. at 1048–49 (listing cases).

Because section 1557 of the ACA explicitly incorporates the protections of Title IX, the ruling in Whitaker is instructive for future discrimination claims under the ACA. Unfortunately, however, the exceedingly clear rulings from the Seventh Circuit and a variety of district courts across the country have not stemmed attempts to discriminate on the basis of sex and gender identity.

On the Basis of Sex and Recent Efforts to Discriminate

Recently, two transgendered women in Wisconsin brought suit against the State of Wisconsin Employee Trust Fund and the Group Insurance Board—the institutions responsible for dictating coverage for state insurance—for excluding coverage of transition-related care from the state insurance. Boyden v. Conlin, 341 F. Supp. 3d (W.D. Wis. 2018); see also Flack v. Wis. Dep’t of Health Servs., 328 F. Supp. 3d 931 (W.D. Wis. 2018).

In Boyden v. Conlin, the plaintiffs brought Title VII and ACA section 1557 claims against the state for openly structuring the state insurance coverage in a discriminatory manner that excluded transition-related coverage. In fact, the plaintiffs complained that transition-related care was originally covered by the state insurance as mandated by the ACA but that the defendants made a politically motivated decision to exclude such coverage after the Texas court issued a national injunction against the HHS rule in Franciscan Alliance, Inc. v. Burwell.

For its part, and despite the Seventh Circuit ruling in Whitaker, the state argued, inter alia, that Title VII allows claims for sex discrimination and not for “transgender status.” Boyden, No. 17-CV-264-wcm (Dkt. No. 81). Similarly, the state claimed that section 1557, through Title IX, only protects against discrimination on the basis of sex as defined dichotomously by the Texas court. Interestingly, the state also attempted to justify the discriminatory insurance exclusion through the Spending Clause in Article I of the Constitution, arguing that Wisconsin accepted federal funding for health care without knowing that the funding would include antidiscrimination provisions. Moreover, the state held that the exclusion is not facially discriminatory because nontransgendered people (cisgender people) are not able to receive the same sorts of treatments for psychological distress. As such, the state argued, the insurance exclusion prohibiting coverage for transitional-related care protects against discrimination of cisgender people. Id.

In October 2018, a unanimous jury awarded both plaintiffs in the Boyden case almost a million dollars in damages for the constitutional harm they suffered. The state did not appeal the verdict.

Transgender Individuals and the Future of Health-Care Discrimination

The mere existence of the insurance exclusion in Wisconsin—as well as the multiple cases challenging it—makes it clear that the application of Title IX and section 1557 of the ACA vis-à-vis transgender individuals is not a settled matter. Despite rulings in the controlling 7th Circuit to the contrary, the State of Wisconsin is maintaining that transgender individuals are not protected by Title IX or section 1557 of the ACA. The implication is clear: Regardless of whether it believes the insurance exclusion to be discriminatory, the state believes that it is permissible under federal and state law to discriminate against transgender people. Unsurprisingly, Wisconsin is not alone in this view: Trans-related discrimination cases have been heard, and favorably decided, in the 1st, 6th, 7th, and 11th Circuits, as well as in district courts in Minnesota, Florida, Massachusetts, Virginia, Maryland, Washington, Pennsylvania, California, Illinois, Nebraska, Colorado, Kentucky, Connecticut, Arizona, Arkansas, Oklahoma, Texas, New York, and the District of Columbia. These cases have protected against trans-related discrimination through a variety of laws, including Title XII of the Civil Rights Act, Title IX of the Educations Amendments Act, the Equal Protection Clause of the U.S. Constitution, the Equal Credit Opportunity Act, the Gender Motivated Violence Act, and the Health Care Rights Act. It seems highly likely, therefore, that this issue will remain active in the courts unless and until this issue is taken up by the Supreme Court. In the meantime, trans advocates across the country have been attempting to protect the trans community through the consistent implementation of Title IX and Title VII and section 1557 of the ACA.

Litigators getting involved in trans-health cases not only must understand the statutory history and relevant cases prohibiting discrimination against the trans community but also must be aware of inevitable future opinions on the subject.