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For transgender Americans, access to necessary health care can be fraught with challenges. Section 1557 of the Affordable Care Act (ACA) prohibits discrimination on a wide variety of grounds for any "health program or activity" that receives any sort of federal financial assistance.
But the specifics of how that section is interpreted and enforced are left up to the Department of Health and Human Services (HHS) and the Office for Civil Rights (OCR). Not surprisingly, the Obama and Trump administrations took very different approaches to ACA Section 1557. But the Biden administration has reverted to the Obama-era rules.
In 2020, the Trump administration finalized new rules that rolled back the Obama administration's rules. This came just days before the Supreme Court ruled that employers could not discriminate against employees based on sexual orientation or gender identity. The Trump administration's rule was subsequently challenged in various court cases.
And in May 2021, the Biden administration issued a notice clarifying that the Office of Civil Rights would once again prohibit discrimination by health care entities based on sexual orientation or gender identity.
The Biden administration subsequently issued a proposed rule in 2022 to update the implementation of Section 1557 and strengthen nondiscrimination rules for health care. The proposed rule was finalized in 2024, to "restore and strengthen civil rights protections for individuals consistent with the plain meaning of the statutory text."
The 2024 rule expands nondiscrimination protections based on sexual orientation, gender identity, sex characteristics, and pregnancy-related conditions including pregnancy termination.
ACA Section 1557 has been in effect since 2010, but it's only a couple of paragraphs long and very general in nature. It prohibits discrimination in health care based on existing guidelines—the Civil Rights Act, Title IX, the Age Act, and Section 504 of the Rehabilitation Act—that were already very familiar to most Americans (i.e., age, disability, race, color, national origin, and sex).
Section 1557 of the ACA applies those same non-discrimination rules to health plans and activities that receive federal funding.
Section 1557 applies to any organization that provides healthcare services or health insurance (including organizations that have self-insured health plans for their employees) if they receive any sort of federal financial assistance for the health insurance or health activities.
That includes hospitals and other medical facilities, Medicaid, Medicare, student health plans, Children's Health Insurance Program, and private insurers that receive federal funding. This previously did not include Medicare Part B, but the 2024 final rule added Medicare Part B to the list of covered entities.
For private insurers, federal funding includes subsidies for their individual market enrollees who purchase coverage in the exchange (marketplace). In that case, all of the insurer's plans must be compliant with Section 1557, not just their individual exchange plans.
Self-insured employer-sponsored plans are not subject to Section 1557 unless they or their third-party administrator receive some type of federal funding related to health care activities. The majority of people with employer-sponsored health coverage are enrolled in self-insured plans.
To clarify the nondiscrimination requirements, the Department of Health and Human Services (HHS) and the Office for Civil Rights (OCR) published a 362-page final rule for implementation of Section 1557 in May 2016.
At that point, HHS and OCR clarified that gender identity "may be male, female, neither, or a combination of male and female." The rule explicitly prohibited health plans and activities receiving federal funding from discrimination against individuals based on gender identity or sex stereotypes.
But the rule was subject to ongoing litigation, and the nondiscrimination protections for transgender people were vacated by a federal judge in late 2019.
In 2020, the Trump administration finalized new rules which reversed much of the Obama administration's rule. The new rule was issued in June 2020, and took effect in August 2020. It eliminated the ban on discrimination based on gender identity, sexual orientation, and sex stereotyping, and reverted to a binary definition of sex as being either male or female.
Just a few days later, however, the Supreme Court ruled that it was illegal for a workplace to discriminate based on a person's gender identity or sexual orientation. The case hinged on the court's interpretation of what it means to discriminate on the basis of sex, which has long been prohibited under US law. The majority of the justices agreed that "it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex."
The Biden administration announced in May 2020 that Section 1557's ban on sex discrimination by health care entities would once again include discrimination based on gender identity and sexual orientation.
And in 2022, the Biden administration published a new proposed rule for the implementation of Section 1557, rolling back the Trump-era rule changes and including a new focus on gender-affirming care (as opposed to just gender transition care).
That rule change was finalized in 2024, officially reinstating rules that prohibit discrimination in healthcare based on sexual orientation or gender identity.
The current Section 1557 implementation rule "does not require a specific standard of care or course of treatment for any individual, minor or adult." So under that rule, health plans are not required to cover gender-affirming care or any other specific care. They are required, however, to make coverage decisions in a non-discriminatory manner. This means covered health plans are not allowed to categorically exclude gender-affirming care coverage when the same care is covered in other circumstances.
Even before the Obama administration's rule was blocked by a judge and then rolled back by the Trump administration, it did not require health insurance policies to "cover any particular procedure or treatment for transition-related care."
The rule also did not prevent a covered entity from "applying neutral standards that govern the circumstances in which it will offer coverage to all its enrollees in a nondiscriminatory manner." In other words, medical and surgical procedures had to be offered in a non-discriminatory manner, but there was no specific requirement that insurers cover any specific transgender-related healthcare procedures, even when they're considered medically necessary. That is still true under the Biden administration's interpretation of Section 1557.
Under the Obama administration's rule, OCR explained that if a covered entity performed or paid for a particular procedure for some of its members, it could not use gender identity or sex stereotyping to avoid providing that procedure to a transgender individual.
So for example, if an insurer covers hysterectomies to prevent or treat cancer in cisgender women, it would have to use neutral, non-discriminatory criteria to determine whether it would cover hysterectomies to treat gender dysphoria. These protections were rolled back under the Trump administration, but have been reinstated by the Biden administration.
And gender identity cannot be used to deny medically necessary procedures, regardless of whether it affirms the individual's gender. For example, a transgender man cannot be denied treatment for ovarian cancer based on the fact that he identifies as a man.
But the issue remained complicated, and it's still complicated even with the Biden administration's stronger Section 1557 nondiscrimination rules.
Under the 2016 rule, covered entities in every state were prohibited from using blanket exclusions to deny care for gender dysphoria and had to utilize non-discriminatory methods when determining whether a procedure will be covered. But that was vacated by a federal judge in 2019.
However, the new rules finalized in 2024 by the Biden administration state that a covered entity may not "have or implement a categorical coverage exclusion or limitation for all health services related to gender transition or other gender-affirming care."
However, HealthCare.gov's page about transgender health care still states that "many health plans are still using exclusions such as “services related to sex change” or “sex reassignment surgery” to deny coverage to transgender people for certain health care services. Coverage varies by state."
The page goes on to note that "transgender health insurance exclusions may be unlawful sex discrimination. The healthcare law prohibits discrimination on the basis of sex, among other bases, in certain health programs and activities."
The page advises that "if you believe a plan unlawfully discriminates, you can file complaints of discrimination with your state’s Department of Insurance, or report the issue to the Centers for Medicare & Medicaid Services by email to marketconduct@cms.hhs.gov." This language has existed on that page for several years, despite various changes in the way the federal government has interpreted Section 1557.
Prior to the 2016 guidance issued in the Section 1557 final rule, there were 17 states that specifically prevented state-regulated health insurers from including blanket exclusions for transgender-specific care and 10 states that prevented such blanket exclusions in their Medicaid programs. And as of 2024, the list of states that ban specific transgender exclusions in state-regulated private health plans has grown to 24, plus the District of Columbia.
Starting in 2023, Colorado became the first state to explicitly include gender-affirming care in its benchmark plan (used to define essential health benefits), ensuring that all ACA-compliant individual and small-group health plans in the state must provide that coverage.
While Section 1557 was initially a big step towards equality in health care for transgender Americans, it does not explicitly require coverage for sex reassignment surgery and related medical care. And the implementation of Section 1557 has been a convoluted process with various changes along the way. Most recently, the Biden administration has restored nondiscrimination protections based on gender identity.
It depends on the health insurance plan. This description from Aetna and this one from Blue Cross Blue Shield of Tennessee are good examples of how private health insurers might cover some—but not all—aspects of the gender transition process, and how medical necessity is considered in the context of gender-affirming care.
Since 2014, Medicare has covered medically necessary sex reassignment surgery, with coverage decisions made on a case-by-case basis depending on medical need. And the Department of Veterans Affairs (VA) has announced in June 2021 that it has eliminated its long-standing ban on paying for sex reassignment surgery for America's veterans.
But Medicaid programs differ from one state to another, and there are pending lawsuits over some states' refusals to cover gender transition services for Medicaid enrollees.
Over the last several years, many health plans and self-insured employers have opted to expand their coverage in order to cover sex reassignment surgery and other gender-affirming care. But although health coverage for transgender-specific services has become more available, it is still far from universal.
This issue is likely to face protracted legal debate over the coming years, and coverage will likely continue to vary from one state to another and from one employer or private health plan to another.
Many health plans in the U.S. are subject to ACA Section 1557, which prohibits discrimination based on gender. But this section is implemented via HHS rules, which have changed over time: The Obama administration issued rules to protect people from gender-related discrimination in health care, the Trump administration relaxed those rules, and the Biden administration has strengthened them once again.
The rules could change again under a future administration, since the specific details of the non-discrimination rules are not defined in the ACA itself. And even with the current rules in place—which prohibit discrimination in healthcare based on sexual orientation or gender identity—federal rules do not require health plans to cover any particular services related to transgender healthcare.
If you need gender-affirming medical care, you'll want to carefully consider the specifics of the health policy you have or any that you may be considering. If you think that you're experiencing discrimination based on your gender identity, you can file a complaint with the Office of Civil Rights. But you may find that a different health plan simply covers your needs more comprehensively.
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By Louise Norris
Norris is a licensed health insurance agent, book author, and freelance writer. She graduated magna cum laude from Colorado State University.
