California penalizes insurance agency for not providing coverage for gender reassignment surgeries

The California Department of Managed Health Care has issued a $200,000 fine against a health insurer for refusing to provide coverage to several patients who sought gender reassignment surgeries.

According to SF Gate, the department issued an enforcement action against the insurance agency Health Net for violating the Insurance Gender Nondiscrimination Act, which prohibits health plans from discriminating against people based on gender identity or expression.

In the letter to Health Net, the department stated that the insurer and its medical groups have denied requests from seven enrollees who were seeking coverage for medical services related to gender reassignment surgery between 2013 and 2015.

"As a result of the plan and/or its delegated medical groups' denial, seven enrollees were denied health care services such as consultation, testosterone injections, gender reassignment surgery, bilateral mastectomy, and facial feminization surgery," the letter stated, as reported by Christian News Network.

"In three of the seven cases, the plan denied on the basis that the requested services were cosmetic in nature, and therefore not covered. In two of these cases, the plan relied on a categorical limitation in the EOC (evidence of coverage) that limited covered services to the transgender surgery, and excluded all other services beyond the actual surgery," it continued.

Health Net's policies prohibit coverage for procedures that are aimed at changing one's "physical characteristics" to be like those of the opposite sex. However, regulators maintain that the policy violates state law, and has determined that the insurer must pay a $200,000 administrative penalty.

The insurance company has agreed to comply with the department's requests by Sept. 30, including submitting written confirmation that its health plans comply with state anti-discrimination laws. Health Net will also evaluate whether to reimburse the expenses incurred by the seven patients as a result of the procedures not being covered by the insurance. The department has not named the seven individuals involved, citing patient confidentiality.

California is one of 15 states that have laws or regulations that prohibits the exclusion of coverage for transition-related care.

In 2013, the California Department of Managed Health Care ordered health insurers to remove coverage exclusions and limitations related to gender transition from insurance plans. The department has reportedly taken three enforcement actions against other health care plans in the past over their handling of diagnoses and services for people with gender dysphoria.

While the American Medical Association does not take a position on specific treatment options for gender dysphoria, the organization has indicated that treatments for the condition must be covered by insurers as long as the patient and the physician have determined that it is the most appropriate option.