How Section 1557 of the Affordable Care Act protects LGBTQI+ individuals

The answer is that it depends on the health plan. There are no federal rules – including the 2024 final rule for Section 1557 – that require health plans to cover gender-affirming surgery.

The FAQs issued alongside the final rule clarify that it “does not require [health plans] to cover a particular health service for the treatment of gender dysphoria…. Rather, it prohibits health insurance issuers, state Medicaid agencies, and other covered entities from excluding categories of services in a discriminatory way. Coverage must be provided in a neutral and nondiscriminatory manner.”⁵

A state can require state-regulated health plans (meaning plans that aren’t self-insured) to cover gender-affirming surgery, either via a state mandate or the state’s Essential Health Benefits (EHB) benchmark plan, which sets coverage requirements for individual and small-group plans.

In 2023, Colorado became the first state to include gender-affirming care in its EHB benchmark plan. As a result, most surgical procedures used for gender affirmation are now covered by most individual and small-group plans in Colorado.¹⁰

In some states, however, individual-market health plans specifically exclude gender-affirming surgery from their coverage.¹¹ HealthCare.gov notes that “these transgender health insurance exclusions may be unlawful sex discrimination,” and clarifies that discrimination complaints can be filed with state insurance departments or reported to CMS by email at [email protected].¹²

Gender-affirming care encompasses a wide range of psychological and medical treatments. In addition to the gender affirmation surgery discussed above, gender-affirming care also includes services such as counseling and psychotherapy, speech therapy, hair removal, and hormone therapy.¹³

Section 1557 of the ACA and its associated implementation rules do not require any particular services to be covered by health insurance. They only prohibit a health plan from denying or excluding coverage in a discriminatory manner. So under the 2024 final rule, covered health plans cannot categorically exclude coverage for gender-affirming care, or exclude coverage on the basis of sex when the same care is covered for other purposes.⁹

The final rule does not specify exactly what would constitute a discriminatory health coverage decision. The rule states that if a discrimination complaint is received, “OCR [Office for Civil Rights] must conduct a fact-specific inquiry into allegations of discriminatory actions and consider a covered entity’s proffered reason for the challenged action.”

So the rule still allows health plans to use utilization management tools and exclude coverage for certain services. But it also notes that “excessive use or administration of utilization management practices that target a particular condition … could be discriminatory under this rule.”¹⁴

The Transgender Legal Defense & Education Fund has a resource page that links to various insurers’ guidelines on coverage criteria for numerous types of transgender-related medical care. But it’s important to note that some apply to Medicaid while others apply to various types of private insurance coverage.

And fully insured ( not self-insured) major medical health coverage is primarily regulated at the state level.¹⁵ So if an insurer offers policies in multiple states, the coverage may differ from one state to another to comply with each state’s requirements.

The takeaway point is that people in need of gender-affirming care should pay close attention to the details of their own health insurance policy and any policy alternatives they’re considering, instead of relying on resources that broadly summarize how various insurers cover gender-affirming care.

Learn more: How fertility treatment and IVF are covered by health insurance

Self-insured group plans, which cover the majority of people with employer-sponsored health insurance,¹⁶ are not subject to state insurance rules and are instead regulated by the federal government. For these plans, the employer determines the benefits that are provided. State-mandated benefit requirements are not applicable, and neither are Essential Health Benefit rules.¹⁷

Self-insured plans (and their third-party administrators) are subject to 1557 non-discrimination rules if they directly or indirectly receive federal financial assistance.¹⁸

Again, the Section 1557 rules do not require any particular services to be covered. They only require health plans to be non-discriminatory in their coverage determinations. But it’s noteworthy that one legal analysis noted that “it is generally impracticable for a self-funded ERISA-covered plan to exclude coverage for gender-affirming care as there are significant risks of litigation, penalties, or loss of federal financial assistance in implementing such an exclusion.”¹⁹

Each state runs its own Medicaid program jointly with the federal government. Certain services are required to be covered,²⁰ but coverage of gender-affirming care is optional. As a result, there is significant state-to-state variation in Medicaid coverage of gender-affirming care.²¹

Medicaid is subject to Section 1557’s non-discrimination requirements, which means coverage determinations must be made in a non-discriminatory manner. In April 2024, in a case that’s likely headed for the Supreme Court, a federal appeals court ruled that West Virginia Medicaid and the North Carolina State Health Plan (coverage for state employees) were discriminating on the basis of sex and gender identity by refusing to cover gender-affirming care.²²

Medicare coverage of gender-affirming care is determined on a case-by-case basis, depending on medical necessity. In 2014, Medicare removed a long-standing ban on coverage for gender-affirming surgical care.²³ CMS clarified in 2016 that they were not issuing a National Coverage Determination (NCD) for gender-affirming surgery, and noted that coverage determinations for gender-affirming surgery would continue to be made on a case-by-case basis by local Medicare Administrative Contractors (MACs) and Medicare Advantage plans.²⁴

This means that there is not a uniform national Medicare coverage policy for gender-affirming care, including surgery. So it’s not as straightforward as the coverage for something like a colonoscopy, which has a national Medicare coverage rule.²⁵

If you have Medicare and are in need of gender-affirming care, you and your doctor may need to provide proof of medical necessity to your Medicare Advantage plan (if you’re enrolled in one) or your local MAC (if you have Original Medicare). The coverage decision will be made based on the specifics of your case.²⁶

Section 1557 of the Affordable Care Act is only half a page, and clarifies that the regulations to implement the non-discrimination provisions are left up to the Secretary of HHS.

The statutory text of ACA Section 1557 simply says that an individual shall not “be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title.”²⁷

And it clarifies that the prohibited discrimination falls under rules stemming from the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, and Section 504 of the Rehabilitation Act of 1973.

Beyond that, the details are left to HHS. So it’s not surprising that we’ve had multiple iterations of rulemaking for ACA Section 1557, as HHS perspectives shift under changing presidential administrations.

Specifically, the administrations have differed in their interpretation of which entities are subject to Section 1557 rules, and on how the nondiscrimination protections should apply with regards to sexual orientation, gender identity, and pregnancy related conditions.²⁸

Each time the rules are changed, it’s called a “final” rule. But that just means that a proposed rule was issued, a comment period was opened, and a rule was finalized. It doesn’t mean the rule can’t change in the future, as we’ve seen multiple times with Section 1557 rulemaking.

Here’s how the interpretation of Section 1557 requirements has changed over time:

The 2016 Final Rule was the first round of Section 1557 rulemaking, which included protections against discrimination based on gender identity, sex stereotypes, and sexual orientation. The rule clarified that a person’s gender identity “may be male, female, neither, or a combination of male and female.”

The 2020 Final Rule – the second round of Section 1557 rulemaking – removed the 2016 ban on discrimination based on gender identity, sex stereotyping, or sexual orientation. The rule also reverted to a binary definition of sex as either male or female.

So although people could still submit discrimination complaints to OCR, Section 1557 was being interpreted in a way that prevented the agency from finding that a person was discriminated against based on gender identity or sexual orientation, since those were no longer considered grounds for discrimination.

But soon after the 2020 rule was finalized, the Supreme Court ruled in Bostock v. Clayton County that an employer could not discriminate based on a person’s gender identity or sexual orientation, as that would constitute discrimination “because of sex.”⁶

The following year, under a new administration, HHS issued a notification that for consistency with Bostock, HHS would “interpret and enforce section 1557 of the Affordable Care Act prohibition on discrimination on the basis of sex to include: Discrimination on the basis of sexual orientation; and discrimination on the basis of gender identity.” But it would be three more years before an updated version of Section 1557 rulemaking was finalized.

2024 Final Rule – The third round of Section 1557 rulemaking expands the number of entities subject to Section 1557 rules and broadens the scope of nondiscrimination protections. This rule prohibits discrimination based on gender identity, sexual orientation, sex characteristics, and pregnancy-related conditions (including termination of pregnancy). It also specifically addresses LGBTQI+ health care nondiscrimination protections, including healthcare for transgender people.

Litigation over Section 1557 has been ongoing throughout the years since the first rule was finalized in 2016.⁹ Most recently, Florida’s Attorney General and the Catholic Medical Association filed suit against HHS in May 2024, seeking to overturn the 2024 rule.²⁹

Additional lawsuits are expected in the coming months, particularly when state law conflicts with Section 1557 requirements.³⁰ For example, some states have enacted laws allowing medical providers to refuse to treat LGBTQI+ patients,³¹ or prohibiting gender-affirming care for transgender youth.³²

And since Section 1557 leaves implementation up to HHS, the rules could change again under a future administration. So although the 2024 rule expands non-discrimination protections in health care, the issue is not yet settled.