Iowa Supreme Court rules transgender patients can use Medicaid for transition-related care

DES MOINES, Iowa - Transgender Iowans can use Medicaid funds to pay for transition-related care, including surgeries, according to a unanimous Iowa Supreme Court ruling Friday.

The court’s decision strikes down the administrative code governing Medicaid in Iowa that classifies transition-related surgeries as "cosmetic, reconstructive or plastic surgery" and explicitly bans "surgeries for the purpose of sex reassignment." The justices agreed with a district judge's ruling that the rules contradicted protections in the Iowa Civil Rights Act.

That law's "gender identity classification encompasses transgender individuals — especially those who have gender dysphoria — because discrimination against these individuals is based on the nonconformity between their gender identity and biological sex," Justice Susan Christensen wrote for the court.

This decision is thought to be the first by a state's highest court holding that transgender people have the right to use public money for transition-related surgeries. As issues of LGBT rights swirl nationally, the decision could help open the door for challenges to bans in other states, about half of which have language similar to Iowa’s in their administrative code.

"As the ruling showed, this case presented a difficult question involving individual rights and the state’s interests," said Lynn Hicks, spokesman for the Attorney General's Office. "This issue was a first for Iowa’s courts, and we thank the court for its guidance and for resolving this issue."

The state Department of Human Servies declined to comment.

TRANS IN IOWA: A special Des Moines Register series of reports

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The verdict ended an almost two-year legal battle that hinged on whether transition-related surgery was “medically necessary” or a procedure provided solely psychological purposes.

After years of dealing with denials and headaches regarding their health coverage, Carol Ann Beal, 42, of northwest Iowa, and EerieAnna Good, 28, of the Quad Cities, sued the Department of Human Services in 2017. They alleged that the state’s blanket ban denying their use of public funds for doctor-prescribed surgery violated the equal protection clauses in both the Iowa Civil Rights Act and the state constitution.

“The record evidence shows that this surgery is medically necessary,” John Knight, an attorney with the ACLU representing Beal and Good, told justices when the case was argued. “It’s really lifesaving treatment for a number of individuals.”

In his June decision, Polk County Chief District Judge Arthur Gamble concurred, saying the decades-old regulation "has not kept up with law and medicine." He ordered the department to approve the women’s request for coverage.

But the state appealed, arguing the ban is not discriminatory because the department denies all surgeries performed primarily for psychological reasons — which is how it has characterized transition-related surgeries.

“We are covering these surgeries in the same instances when the primary purpose is to address a non-psychological purpose,” state Assistant Attorney General Matthew Gillespie said during oral arguments. “And we don't cover surgeries in the same instance, regardless of gender identity, when the surgery is performed primarily for a psychological purpose.”

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Gender identity — or the deeply held sense of who one is that may differ from the sex organs with which one was born — and sexual orientation were added to the Iowa Civil Rights Act as protected classes in 2007.

Under that statute, transgender Iowans have legal protections against discrimination in education, employment, housing and public accommodations. Medicaid, a state and federally funded program, is considered a public accommodation.

Daniel Hoffman-Zinnel, executive director of One Iowa, a statewide LGBTQ organization, said the ruling sets a strong judicial precedent for protecting transgender Iowans' civil rights. He called gender-affirming surgery "powerful, life-changing and absolutely essential."

"This decision will, quite literally, save lives," Hoffman-Zinnel said.

In a statement Friday, Beal and Good said they were thrilled with the decision. Beal described herself as "extremely happy for those people who will come after me."

"It’s hard to believe that it’s taken so many years for Iowa laws to catch up with the reality of transgender Iowans," Good said, calling herself honored to "help the hundreds and thousands of other transgender people out there who definitely need this type of medical care."

The medical necessity

Beal has known she was a woman despite being born with male genitalia since before she started kindergarten.

She started presenting as a girl at 10 and began taking hormones in her teens after being diagnosed with gender dysphoria, the medical term for feeling that one's inner masculinity or femininity is incongruent with his or her biological sex.

Both her family and her spouse supported her decision to go through with this litigation, Beal said when the lawsuit was filed in 2017.

"You go through so many years transitioning, and now I hit a brick wall with Iowa's discriminatory ban on Medicaid coverage for transition-related care," Beal said in 2017, her voice cracking with nerves. "It has caused me stress and depression and affects every aspect of my life."

The question of the "medical necessity" of these procedures often lies at the heart of conversations about transition-related care.

When prescribed by a doctor, all forms of transition care, including surgeries, are recommended by most professional medical organizations, including the American Medical Association, the American Psychological Association and the American Psychiatric Association.

But not every transgender person is interested in surgery, Dr. Joe Freund, one of the most sought-after transition-care doctors in the state, previously told the Register.

Transitioning is a spectrum, and some patients find alignment simply by dressing in gender-specific clothing. Other patients may find hormone-replacement therapy enough while some may need surgery to make themselves whole, he said.

Dr. Nicole Nisly, co-founder of the award-winning University of Iowa LGBTQ Clinic, has said she has many patients on Medicaid, some of whom meet the medical criteria for surgical intervention and are in desperate need of that kind of care.

Without these surgeries, those patients can experience extreme depression and anxiety and may have suicidal thoughts.

"When they are denied this care it is heartbreaking for us and heartbreaking for them," Nisly previously said. "Imagine it from their perspective: They have been on hormones and transitioned in every other way for a year and then they find out they can't take that extra step to fully become themselves.

"Some (of my patients) do become suicidal."

In the district court ruling, Gamble wrote that DHS did not “rebut the medical evidence that gender affirming surgery is medically necessary treatment” and called the exclusion of coverage “unreasonable, arbitrary and capricious.”

The denial was issued “without regard to the law and facts,” the judge wrote. “The agency acted in the face of evidence upon which there is no room for difference of opinion among reasonable minds.”

What will it cost?

DHS has also resisted on the grounds of the high cost of transition-related care. The agency has argued that its regulation against transition care "serves the purpose of conserving limited state resources."

While Gamble agreed that cost savings is a "legitimate government interest," he wrote that the ban "achieves this goal through an extreme degree of underinclusiveness."

Tabulating the cost of transition is difficult because of the variation of care needed or desired, but the Philadelphia Center for Transgender Surgery prices the full suite of procedures for both transgender women and transgender men at more than $100,000.

However, single surgeries cost much less. For example, a vaginoplasty, the creation of a vagina, or a phalloplasty, the creation of a penis, costs about $20,000.

Despite what could be considered high costs, transgender people make up a relativity small portion of the national population. One estimate found about 0.3 percent of the total population, or about 964,000 people nationally and 9,300 in Iowa, identify as transgender, according to The Williams Institute, a think tank at UCLA's law school.

A smaller subset of that population would seek surgeries.

At the time the original suit was filed, the ACLU and local doctors pointed to mastectomies as an example of the inherent unfairness of the ban.

Breast-removal surgery costs the same whether it is covered as cancer treatment or as a treatment for gender dysphoria. Only one of those surgeries was banned — even if doctors in both cases deem the surgery to be "medically necessary."

Advances in other court cases

The 6-0 Supreme Court ruling came on the heels of another step forward for transgender rights in Iowa.

Last month, Jesse Vroegh, a transgender man and former prison nurse, won his discrimination case against the state after he was denied access to the men's restrooms and locker rooms and denied transition-related care.

He was awarded $120,000 in damages.

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The Iowa ACLU has also previously represented Meagan Taylor, a transgender woman discriminated against at a West Des Moines hotel. The highly publicized case resulted in an undisclosed settlement.

In this case, Beal has said that she didn't set out to become a trailblazer, but wanted to "make it easier for younger people who need this surgery."

"I look forward to the day when someone fighting to get the transition-related medical care they need isn't in the news,” she said.

Follow Courtney Crowder and Luke Nozicka on Twitter: @CourtneyCare and @LukeNozicka

This article originally appeared on Des Moines Register: Iowa Supreme Court rules transgender patients can use Medicaid for transition-related care