NC health plan discriminates against transgender workers, federal appeals court rules

A divided federal appeals court ruled that North Carolina’s state health insurance plan discriminated against transgender patients by not covering gender-affirming care.

Transgender state workers sued the state in 2019 over a coverage exclusion in the State Health Plan for treatments for gender dysphoria, the medical term for distress occurring when someone’s physical sex doesn’t match their gender identity.

The 4th Circuit U.S. Court of Appeals sided with the workers on Monday, finding that the exclusion violated the Equal Protection Clause of the U.S. Constitution by discriminating on the basis of gender identity and sex.

The case could be appealed to the U.S. Supreme Court.

Defendants in the case, which included Republican state Treasurer Dale Folwell, argued that the exclusion did not specifically target transgender people because it applied to everyone diagnosed with gender dysphoria.

“In this case, discriminating on the basis of diagnosis is discriminating on the basis of gender identity and sex,” Judge Roger Gregory, who was appointed by Bill Clinton and later renominated by George W. Bush, wrote in the majority opinion.

“Gender dysphoria is so intimately related to transgender status as to be virtually indistinguishable from it,” Gregory wrote. “The excluded treatments aim at addressing incongruity between sex assigned at birth and gender identity, the very heart of transgender status.”

In a statement released Monday, Folwell said he disagreed with the court’s ruling.

“Untethered to the reality of the plan’s fiscal situation, the majority opinion opens the way for any dissatisfied individual to override the plan’s reasoned and responsible decisions and drive the plan towards collapse,” he said.

A lower court agreed with the workers in 2022, but the case was appealed to the 4th Circuit, which heard the case in September.

The court heard the case en banc, meaning all 14 judges presided. Seven judges, all of whom were nominated by Democratic presidents, joined Gregory in his majority opinion, while the rest dissented.

In a dissenting opinion, Judge Julius Richardson, a nominee of Donald Trump, agreed with the state’s view of the exclusion.

“The exclusions do not deny someone coverage for medical services based on the person’s sex or transgender status,” Richardson wrote. “Rather, they deny everyone coverage for certain services based on the medical diagnosis for which the person is seeking those services.”

The State Health Plan covers over 740,000 public employees and their dependents.

The North Carolina General Assembly passed several laws targeting transgender people last year, including a ban on gender-affirming care for minors and a ban on transgender women’s participation in women’s sports.