Bostock’s Implications for the Affordable Care Act

Prof. Shirley Lin sends along this post from 2020 New York University Law graduate Kathryn Evans who is an incoming Civil Rights Fellow at Katz, Marshall, and Banks, LLP. 

.The Supreme Court’s decision in Bostock v. Clayton County, Georgia is a victory for LGBTQIA workers that will no doubt reverberate beyond the employment sphere. Justice Gorsuch sought to keep the majority’s ruling limited, writing that it held only that firing someone because they are transgender or homosexual violated Title VII’s prohibition on sex discrimination. But, as the dissenting justices point out, its logic will almost certainly extend to other federal statutes that prohibit sex discrimination. Bostock explicitly held that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” This seems to foreclose any argument that another statute forbidding discrimination “because of” or “on the basis of” sex allows differential treatment of someone based on their sexual orientation or gender identity. And because it analyzed the claims under but-for cause, its holding will bear upon claims under a variety of analogous federal statutes.

One such statute is the Affordable Care Act (ACA). Section 1557 of the ACA, 42 U.S.C. § 18116, provides that any health care entity receiving federal funds through the ACA cannot exclude, deny benefits to, or otherwise discriminate against any patients “on the ground prohibited under . . . title IX of the Education Amendments of 1972.” Title IX prohibits discrimination “on the basis of sex” in federally-funded educational programs. Federal courts generally look to Title VII to interpret similarly worded portions of Title IX, because both outlaw sex discrimination. Thus, an interpretation of Title IX—and therefore of the ACA—that is faithful to Bostock’s reasoning would say that those statutes forbid federally-funded education and healthcare programs from discriminating against someone based on their LGBT status.

The Trump administration announced a final rule interpreting Section 1557 just days before the Supreme Court’s Bostock ruling. The new rule is designed to undo a 2016 Obama administration rule that had interpreted Section 1557’s nondiscrimination requirements broadly, amongst other things, specifically including gender identity and sexual orientation as protected categories within “sex.” Finding that definition to be too broad, the new rule removes any definition of sex from the regulations implementing Section 1557, instead deferring to “relevant existing regulations and the relevant case law with respect to [Title IX], as applied to the health context.”

Bostock thus appears to negate the intended effect of the rule change. While the Trump administration removed explicit prohibitions on gender identity and sexual orientation discrimination from the regulations in order to “conform to the plain meaning of the underlying civil rights statutes” in Section 1557, the Court has now determined that both forms of discrimination are prohibited by the plain meaning of the statute. Rather than finding protection in the regulations that implement the ACA, LGBT individuals will almost certainly be protected by the ACA itself, a much more durable kind of protection that cannot be altered by the executive alone. But what exactly will the law require? Some obvious cases are analogous to firing an employee, such as an insurance company refusing to insure the transgender community or a doctor refusing to see any lesbian patients for routine check-ups. But what services would those insurers have to cover and would those doctors provide?

Take for example, breast surgery. UnitedHealthcare, the largest health insurer in the US, covers mastectomies for any individual with breast cancer. It also considers breast reconstruction to be medically necessary after a mastectomy, noting “the importance of postsurgical psychological adjustment.”  It also acknowledges that gender confirmation surgery can be effective treatment for gender dysphoria, depression, and anxiety, so it considers many surgeries to be medically necessary for individuals diagnosed with gender dysphoria. One such covered surgery is a total mastectomy for transgender men. But breast enlargement for transgender women is not covered. Thus, this policy pays for gender-affirming top surgery for transgender men, but not transgender women. The insurer also pays for cisgender women to augment their breasts after a mastectomy, but not for transgender women to augment their breasts, although both would relieve psychological distress which is caused by a biological condition — either cancer or gender dysphoria.

Courts will soon address Bostock’s impact on the ACA. For example, an appeal to the Fifth Circuit in Franciscan Alliance, Inc. v. Azar, a case challenging the 2016 Obama regulation’s interpretation of “sex” as overbroad, was recently stayed pending the decision in Bostock after plaintiffs successfully argued that it would “have a direct bearing on this case,” given that the ACA incorporates Title IX’s prohibition on sex discrimination, which itself is analogous to Title VII. Although Bostock does not provide all of the answers, it provides those arguing for greater protections for LGBT individuals with firmer ground to stand on.