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Health insurance and the LGBT community

LGBT community making gradual gains in access to health insurance coverage through employers, private market

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During the recent Congressional debate over health reform, the proposed legislation was notable for its ambitious plans to remove long-standing barriers to health coverage, including pre-existing conditions that have kept millions of Americans uninsured. But the legislation was also particularly encouraging to a coalition of Americans who have long faced additional barriers to coverage.

In November 2009, the U.S. House of Representatives passed H.R. 3962, legislation that included provisions promising improved access to health insurance coverage for the lesbian, gay, bisexual and transgender (LGBT) community. Most notably, the legislation would have extended equal tax treatment for employer-sponsored health benefits to domestic partners.

That provision was ultimately cut from the Patient Protection and Affordable Care Act that was signed into law by President Barack Obama, but its passage by the House was a sign of progress for advocates seeking broader access to health coverage for the LGBT community.

Advocates have long sought legislative action remove barriers to health insurance coverage for LGBT populations that have historically been less likely to be covered by both employer-sponsored health insurance and non-group individual health insurance.

No marriage may mean no coverage …

One major issue has been the lack of availability of coverage for same-sex partners through employer-sponsored health plans. Even though coverage has been slowly expanding, a recent survey of employer benefits by the Kaiser Family Foundation showed that only one in five U.S. employers offered domestic partner benefits that cover same-sex partners.

State recognition of same-sex couples’ right to marry has been a recent factor improving access to employer coverage. But only a handful of states – currently fives states and the District of Columbia – legally recognize same-sex marriages. And if a state doesn’t recognize a same-sex partner as a spouse, employers are less likely to feel an obligation to offer spousal benefits. For same-sex couples, the result is that not only are partners denied coverage, but coverage may also be denied to the child of a same-sex partner who has not been adopted.

Even in states that recognize same-sex marriage, companies may fall outside of state laws because they self insure, says Lee Badgett, Research Director at the Williams Institute, which studies public policy issues that affect the LGBT community.

… or more expensive coverage

And, while more companies offer domestic partner coverage each year, same-sex partners still pay more for their coverage when they receive the benefit. Unlike heterosexual couples, same-sex couples don’t receive a federal tax break for the spouse of the covered employee.

As Jeff Krehely of the Center for American Progress notes, “any federal benefit is off the books because of the Defense of Marriage Act,” which – since 1996 – has defined “spouse” as a member of the opposite sex, and thus limits federally regulated benefits to heterosexual couples.

Had the 2009 House legislation survived intact, the ACA would have resolved that issue. “In terms of policy related to same-sex couples, that would be considered a real milestone,” says Badgett.

Individual market is challenging

Beyond employer-sponsored health plans, the outlook is often bleak.

“Insurance company practices tend to target the LGBT community, with many coverage exclusions for pre-existing conditions,” says Kellan Baker, with the National Coalition for LGBT Health. Baker says LGBT individuals tend to have less access to preventive care and screenings and to have more risk factors – including higher rates of HIV/AIDS and various cancers – that are conspicuous to insurance carriers determined to keep high risks off their rolls.”

Krehely agrees, noting that LGBT applicants also tend to have a more pronounced need for mental health services – in part because homophobic discrimination may cause chronic stress – and treatment or medications could be flagged by insurance carriers as evidence of pre-existing conditions.

Transgender individuals, in particular, face significant hurdles to health coverage, says Baker. “For transgender people, insurance companies have probably decided their entire medical history is a pre-existing condition,” he says.

The Transgender Law Center notes that most transgender applicants are denied coverage when they reveal their status or medical history – such as hormone treatments – that would indicate they’re transgender. Depending on the reason, for exclusion, applicants may have some recourse. Still, even if covered, most health policies specifically exclude transgender-related care and services, the Center notes.

Community has hope for reform

In recent years, there have been more frequent signs of progress when it comes to LGBT access to health coverage. “The real progress is happening at the state level. More states are allowing same-sex couples to marry,” says Badgett. “That, more than anything has increased access.”

More companies are also providing domestic partner coverage, with the most change occurring at larger firms. As of last year, 57 percent of Fortune 500 companies offered domestic partner coverage, according to the Human Rights Campaign. (Companies in the western part of the United States were more likely to offer such coverage while Southern states are listed as the least likely to offer same-sex health benefits.)

Baker says the community was also heartened by passage of the Affordable Care Act – despite omission of the tax benefit. “The big thing is that the reform law extends coverage to 32 million Americans who didn’t have it – including people in the LGBT community.”

The law will also make a huge difference to the community by prohibiting coverage exclusions based on pre-existing conditions, starting in 2014. (Individuals who have been without insurance for at least six months can already apply for high risk insurance pool coverage at the state level – an early deliverable of the Affordable Health Care Act.)

The community remains cautiously optimistic about legislative gains, he says, with the tax exclusion on employer-sponsored benefits for same-sex couples continuing to be a legislative goal for LGBT advocates. Just as important will be policy changes that drive improved data collection.

“The fact that we don’t have good demographic data on the LGBT population is a huge weakness,” Krehely says. Additional data collection through federal surveys would help further pinpoint health care and health coverage disparities faced by populations and provide evidence for needed remedies.

A sense of optimism

But Krehely says he’s seen “tremendous progress” in focusing attention LGBT health care issues over the past five or six years. “There’s much more awareness of LGBT disparities now, and that’s really important. We’re hoping we can build on that.”

Badgett also sees the LGBT community making gradual – but not rapid – gains. “I’m optimistic that we’re on the right path,” she says. “Though it would be nice to be going faster.”