Folwell, State Health Plan swim against rising tide with denial of insurance coverage to transgender individuals

North Carolina is not the only state whose transgender state employees and dependents are without insurance coverage under their state’s health plan.

But the state’s blanket exclusion of treatments for gender dysphoria—from counseling and hormone treatment to gender confirmation surgery—puts it firmly in the minority.

Only 12 states in the U.S. currently have explicit exclusions of transgender and transition-related health care in their state employee health benefits. Seventeen states and Washington D.C explicitly provide for this type of care as part of their employee health benefits. Twenty-one states don’t specifically cover the treatment but do not have a blanket exclusion, making it easier for patients to appeal for some treatments and for the coverage to expand to include them.

“Generally speaking, it’s a positive trend,” said Logan Casey with the Movement Advancement Project, a Colorado-based group that tracks state stances on LGBTQ rights issues.

Casey’s group uses publicly available U.S. Census data, comprehensive studies, the latest surveys and original reporting to map policies impacting LGBTQ people all over the country. Its healthcare laws and policies map (see below) shows North Carolina moving against the national trend toward transgender acceptance.

“More and more states are deciding to move in the direction of non-discrimination protections or remove blanket exemptions,” Casey said. “By providing the data and making it plain where this has happened already, you can see it’s not just possible to provide this sort of coverage but it’s imperative to do so.”

The American Medical Association, American Psychiatric Association and even Blue Cross/Blue Shield of North Carolina, which administers North Carolina’s State Health Plan, recognize gender dysphoria as a serious medical condition. They support the treatments that have emerged from more than 40 years of research. The state’s top experts on the treatment of transgender patients call the treatments essential and often life-saving.

Gender dysphoria is not a mental illness. The American Psychiatric Association defines it as “a conflict between a person’s physical or assigned gender and the gender with which he/she/they identify.”

But, Casey said, the map clearly shows the issue is more one of politics than science.

Along with North Carolina, the list of states with explicit exclusions of transgender-related care is composed almost exclusively of politically conservative areas: Arizona, Arkansas, Florida, Idaho, Louisiana, Mississippi, Nebraska, North Dakota, Ohio, Tennessee and West Virginia.

Science doesn’t change according to state lines, but Casey said his group’s maps make it easy to see where mainstream science is being rejected for political reasons.

In North Carolina, the State Health Plan falls under the jurisdiction of the Office of the State Treasurer. The Plan’s 10 member board of trustees is largely composed of political appointees. Folwell and State Budget Director Charlie Perusse are ex officio members. Two members are appointed by Gov. Roy Cooper, a Democrat. The others are appointed by Folwell or the General Assembly, whose GOP majority has insisted in court that transgender identity does not exist, but is the result of improperly treated mental illness.

In 2017, just as former Treasurer Janet Cowell was leaving office, a decision was made to lift the State Health Plan’s blanket exclusion for transgender treatment. North Carolina wasn’t alone in pursuing such a course. Across the country, states were moving to covering things like talk therapy, hormone treatment and gender confirmation surgeries in order to conform with federal non-discrimination laws that, under President Barack Obama’s administration, came to include transgender people.

Other states—most notably, Wisconsin—were actually forced to do so after losing federal lawsuits over discrimination in the last year.

But When Republican Dale Folwell won the race for North Carolina treasurer in 2016, he made it clear he intended to revive transgender exclusions. Before taking office, Folwell railed against the treatment as unnecessary, too expensive and out of step with his primary goal of cutting costs. He and the State Health Plan’s board of trustees let the extension of coverage for transgender treatment lapse for the 2018 coverage year.

Last month, when transgender state employees and their dependents came before the trustees to give testimony and plead for the restoration of coverage, Folwell again dismissed the idea.

“Until the court system, a legislative body or voters tell us that we ‘have to,’ ‘when to,’ and ‘how to’ spend taxpayers’ money on sex change operations, I will not make a decision that has the potential to discriminate against those who desire other currently uncovered elective, non-emergency procedures,” Folwell said in a statement to Policy Watch.

“Sex change operation” is not a term used by medical professionals treating transgender people, insurance companies or the LGBTQ community. It is widely considered offensive both because of its technical inaccuracy and because a wide array of procedures—not just one operation—are utilized in gender transition.

Many transgender people do not elect to have surgical procedures as treatment for gender dysphoria. The variation in treatment makes it difficult to generalize in discussions of treatment costs—particularly in states like North Carolina, where the state has not undertaken extensive research into possible costs and is working from just one year of data during which the treatment was covered.

Last year Segal Consulting researched national trends and assessed the cost impact of transgender treatment in Wisconsin. The company found between two and five people out of 159,000 members in the state’s Group Health Insurance Program were anticipated to need transgender-related services in a given year. The potential annual cost: between $100,000 and $250,000 out of the state’s $1.3 billion in non-Medicare premiums.

“It’s actually a very minimal cost in the larger context of a budget,” said Casey. “There is a relatively small transgender population in the U.S. The best estimates are about 0.6 percent of the population. But for that population, this is often life-saving care.”

“We also don’t apply that sort of logic to other medically necessary treatments,” Casey said. “We don’t say, ‘Too little of the population has this affliction, so we’re not covering that.’”

The Health Plan’s board of trustees continues to debate the issue. At least one member has called for lifting the exclusion before the beginning of the next coverage year in January.

Robert Broome, executive director of the State Employees Association of North Carolina said his group’s membership has yet to take a position on the issue.

“We’re in a fact gathering mode right now as a staff,” Broome said in an interview this week. “We haven’t taken a position yet, but it’s something where we may take a position if we hear from the members on it.”