FAQ: California’s Ban on Transgender Exclusions in Health Insurance

Frequently Asked Questions about the

California Department of Managed Health Care Director’s Letter on Transgender Exclusions

Overview

The California Department of Managed Health Care (DMHC) has ordered California’s health plans to remove blanket exclusions of coverage based on gender identity or gender expression. This is being done to comply with the California Insurance Gender Nondiscrimination Act, passed in 2005.

The Director’s Letter also provides that patients who are denied coverage can appeal the decision for review by DMHC. Removing these outdated and discriminatory exclusions brings California up-to-date with the latest medical expertise and will provide countless transgender Californians with increased access to medically necessary health care.

Click here to read the Director’s Letter and our press release issued on April 9, 2013.



Why is this important?



For years, transgender Californians have been denied access to health coverage due to discriminatory exclusions in health plans. Even after passage of the Insurance Gender Nondiscrimination Act in 2005, insurance companies persisted in limiting care based on an individual’s transgender status. Regulators are finally saying this is no longer permissible.

The DMHC letter directs health plans to remove benefit and coverage exclusions related to gender transition as well as limitations based on gender identity or gender expression. This development should ensure parity in coverage, and significantly increase medically necessary services available to transgender people.

The new Director’s Letter also allows transgender people to access DMHC’s Independent Medical Review (IMR) process if a health plan denies a specific medical service or treatment. Before the Director’s Letter, transition-related care was classified as a coverage exclusion and was ineligible for the independent medical review.

Who will this impact?

22.5 million Californians are enrolled in health plans regulated by DMHC. Until the Director’s letter was released on April 9, 2013, the majority of individual, small group, and large employer health care insurance plans regulated by DMHC had blanket exclusions restricting coverage for transgender people. Those exclusions will no longer be permitted and must be removed. Effective immediately, transgender patients have access to the Independent Medical Review (IMR) process if a medically necessary claim is denied by their carrier.

An additional 3.7 million people are enrolled in health plans regulated by the California Department of Insurance (DOI). DOI released regulations clarifying nondiscrimination in plans regulated by that body on September 2, 2012 (10 CCR § 2561.2) (.pdf)

Because insurance companies must comply with DMHC and DOI Director’s Letters in order to sell insurance in the state, the DMHC and DOI guidance carry the force of law in California.

The DMHC and DOI Director’s Letters do not impact self-insured plans. Many larger businesses have “self-insured” plans governed by ERISA, a federal law that preempts state nondiscrimination protections, that are regulated by the Department of Labor. Those health plans will be unaffected by DMHC and DOI Director’s Letters.

What does this mean for individuals who live in California and work for a company based out of the state?

All employees residing in California are impacted by the ruling, unless covered by a self insured plan. Many large companies are self insured. The DMHC Helpline can help you determine what kind of health plan you have. Kaiser Permanente, one of the largest insurers in California, is regulated in California and subject to DMHC guidance.

What does it mean for people who work for a California-based company but who live out of state?

The DMHC Director’s Letter, like the DOI regulation, only impacts individuals covered by plans regulated by California. Employees residing in other states will not be impacted by California insurance regulations.

Does this include children and youth?

Yes, if that care is deemed to be medically necessary.

When does this take effect?

The DMHC Director’s Letter is effective as of April 9, 2013.

What will be covered? Who decides?

The DMHC Director’s Letter states that medically necessary transition-related surgery and other care must be covered by health care insurance sold in California. However, if a claim is denied, what constitutes medically necessary care for a particular individual will be determined through the independent medical review process.

The Independent Medical Review (IMR) involves 1-3 physician reviewers with relevant expertise in the area of medicine and who have no conflicts of interest. When an appeal is filed following the denial of coverage for treatment, the panel reviews the relevant scientific literature and generally accepted standards of care, the medical record of person in question, and what has been denied by health plan. Only then will they make a determination specific to that individual as to whether the care is medically necessary. If the IMR is decided favorably, the insurance plan must provide the needed service or treatment. To access the IMR process, call the DMHC helpline.

What if I am denied coverage for my transition-related care?

If a patient is denied coverage, they should contact the DMHC Department of Managed Health Care’s Help Center at 1-888-466-2219 / www.HealthHelp.ca.gov

If you are covered by a PPO it is likely regulated by the Department of Insurance. Their helpline can be reached at 800-927-HELP / www.insurance.ca.gov/contact-us/

Patients should also contact Transgender Law Center’s helpline for assistance with the IMR process at 415.865.0176 x306 / www.transgenderlawcenter.org

Where else do policies like this exist?

Oregon, Colorado, and the District of Columbia also have bans on transgender exclusions in health insurance. Over 25% of fortune 500 companies have also followed suit, as well as cities such as Berkeley and San Francisco.

Oregon, Colorado, and the District of Columbia have similar Director’s Letters restricting discriminatory transgender exclusions in state-regulated health plans.

How does this Director’s Letter impact health reform?

Under the Affordable Care Act, each state decides what is included in their health plans. This decision means that all insurance companies participating in California’s health exchange will need to comply with the Director’s Letter.

What will this cost?

An increase in health insurance costs is not expected because of this Director’s Letter. Employers who have removed exclusions from their health plans typically find their costs so minimal as to warrant no additional cost to employees. If anything, the Director’s Letter will result in a cost savings. When transgender people aren’t able to access medically necessary health care, they must resort to short-term and socially costly alternative forms of care such as emergency rooms.

Why should policy holders have to pay for sex change operations?

We all know someone who has been denied medically necessary care by an insurance company working to protect its bottom line. It’s unfair, painful, and downright dangerous when it happens, and it happens all too often. Decisions about health care should be made between a doctor and their patient, not by insurance industry executives. Ending discriminatory policies that deny people access to medically necessary care and educating providers is the right thing to do and reflects California’s values of fairness.

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