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This Note addresses a major barrier to care that transgender individuals face: "categorical exclusions" barring payment for healthcare related to gender transition in state Medicaid programs, along with policies prohibiting payment for such care when deemed "cosmetic." It first argues that because the dysphoria and discrimination that transgender individuals experience affect their quality of life and mental well-being, and derive from a discord between their appearance and gender identity, those considerations should be taken into account in the legal determination of medical necessity. As medical studies and the views of major medical associations demonstrate, healthcare for gender transition has been found medically necessary for some individuals to mitigate their gender dysphoria.
This Note then describes the arguments for and against the invalidity of categorical exclusions and other policies that deny transgender individuals access to medically necessary care, focusing on Section 1557 of the Affordable Care Act as well as more general provisions of federal Medicaid law. It then examines these issues in the context of litigation regarding New York's limitations on transgender healthcare, which ultimately culminated in a medical necessity standard. Finally, it considers the arguments that Medicaid coverage for gender transition would be too costly, and that requiring states to cover such care would undermine principles of federalism.
I. INTRODUCTION
"Cosmetic" and "experimental" are words of choice for health insurers seeking to deny claims for transgender individuals hoping to undergo medical transition.1 There is a long history of deeming medical care for transgender people seeking to transition as unneeded or unproven treatment, medically unnecessary and not worth payment by private insurance premiums or the public treasury. This tactic has taken two forms: as a means to justify a categorical ban on any transition coverage, or more recently a way of cordoning off a set of specific procedures as cosmetic or unproven.
Wholesale categorical exclusions are increasingly viewed as invalid, whether under Affordable Care Act regulations or as a matter of Medicare coverage determinations or federal Medicaid law.2 Even among jurisdictions that have repealed categorical exclusions in their Medicaid programs, however, many still place restrictions on procedures deemed cosmetic. These states assert that those procedures, among them electrolysis, facial reconstruction, voice therapy, and sexual reassignment surgery, are not properly considered medically necessary treatment for...