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Iowa Medicaid denial of transgender surgery unlawful, judge rules

At least nine states explicitly exclude gender-affirming care in Medicaid coverage.

An Iowa law that prohibits Medicaid coverage for sex reassignment surgeries for transgender residents violates state law and the state constitution, a judge ruled in a decision made public Monday.

Judge William Kelly ordered the Iowa Department of Human Services to provide coverage for sex reassignment surgeries when ordered to treat gender dysphoria, a psychological distress that results from an incongruence between one’s sex assigned at birth and one’s gender identity. It often begins in childhood, and some people may not experience it until after puberty or much later, according to the American Psychiatric Association.

At least nine states across the U.S. explicitly exclude gender-affirming care in Medicaid coverage, while 24 states and Washington, D.C., explicitly include this type of care, according to the Movement Advancement Project, an LGBTQ think tank. The remaining states have no explicit policy.

The ruling is a victory for Aiden Vasquez and Mika Covington, two Iowans represented by the American Civil Liberties Union of Iowa.

Image: Aiden Vasquez
Aiden Vasquez.ACLU

Kelly said state and federal courts in the past 16 years have found that gender identity discrimination is a form of sex discrimination which is prohibited under civil rights laws. He also found the law violated the equal protection clause of the state constitution.

It is not challenged in the record that surgical treatment for gender dysphoria is a serious medical condition and the surgery is recommended for Vasquez and Covington by medical professionals as necessary and effective, the judge said. He said Medicaid coverage is fundamental to ensure the availability of that treatment for economically disadvantaged Iowans.

“Once the medical community determined that surgery is medically necessary to treat this health issue, the government lost its rational basis to refuse to pay for the surgery,” Kelly said in a ruling signed on Friday but posted publicly with online court records on Monday. “The law appears to draw an arbitrary distinction. So, there is no plausible policy reason advanced by, or rationally related to, excluding transgender people from Medicaid reimbursement for medically necessary procedures.”

Rita Bettis Austen, legal director of the ACLU of Iowa, called the decision “a historic win for civil rights” in Iowa.

“It recognizes what we’ve long known, that transgender Iowans must not be discriminated against, and that they are protected by the Iowa Constitution’s guarantee of equal protection, as well as by the Iowa Civil Rights Act,” Bettis Austen said.

The ACLU of Iowa filed a lawsuit in April against the state of Iowa challenging a 2019 law that allows Medicaid to deny payment for sex reassignment surgeries for transgender residents.

Vasquez and Covington initially sued in 2017 and a state court judge found the policy violated the Iowa Civil Rights Act and the Iowa Supreme Court in 2019 upheld that decision. The court concluded that Iowa’s Medicaid program may not categorically discriminate against transgender people seeking gender-affirming, medically necessary care.

Shortly after the court ruling, Republicans in the Iowa Legislature passed an amendment as part of a last-minute addition to a human services budget bill in response to the court’s ruling. That change stated that any government agency in Iowa may decline to use taxpayer money for “sex reassignment surgery” or “any other cosmetic reconstructive or plastic surgery procedure related to transsexualism, hermaphroditism, gender identity disorder, or body dysmorphic disorder.”

Vasquez and Covington, however, had to take their cases through the Department of Human Services system and apply for surgery, have it denied based on the new law and then again pursue a challenge in court. The Iowa DHS has since denied coverage to them. Vasquez is a transgender man who was diagnosed with gender dysphoria in 2016 and Mika Covington is a transgender woman who was diagnosed with gender dysphoria and began receiving hormone therapy in 2015.

Gov. Kim Reynolds signed the bill into law in May 2019, arguing it only narrowly clarifies that Iowa’s Civil Rights Act does not require taxpayer dollars to pay for sex reassignment and other similar surgeries.

Reynolds’ spokesman Alex Murphy said she is disappointed by the ruling “and disagrees with the district court’s ruling on Medicaid coverage for transgender reassignment surgeries. We are reviewing the decision with our legal team and exploring all options moving forward.”

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