Insurance companies that sponsor plans sold under the Obama law, or available through Medicare Advantage, do receive federal payments, what the law terms “financial assistance.”
In a formal explanation, HHS said the regulation would apply to such an insurer “for all of its health plans, as well as when it acts as a third party administrator for an employer-sponsored group health plan.”
The insurance industry doesn’t relish the role of middleman enforcer.
It would be an added burden for insurers who participate in federal programs, said Clare Krusing, spokeswoman for America’s Health Insurance Plans. A large employer might be reluctant to hire such insurers as administrators if that undermines control of their health plans — and raises costs.
“It creates an uneven playing field” for insurers, said Krusing.
An increasing number of large employers are voluntarily covering transgender treatment, following medical recognition that it can lead to healthier outcomes overall for the individuals involved. The number was up to 418 last year, from none in 2002, according to HHS. Medicare began covering medically necessary sex-reassignment surgery in 2014. Traditionally it had been seen as an elective procedure, and carried a social stigma.
Costs are hard to assess because relatively few individuals pursue gender transition and the degree of medical intervention can differ dramatically in each case. Individual costs can range to tens of thousands of dollars.
Dru Levasseur, director of the Transgender Rights Project for the civil rights group Lambda Legal, said the proposed regulation would be “a sea change for the insurance industry.” But if Medicare and plans sold under the health law cover gender transition treatments, so should large employers, he said.
“These exclusions are not in line with the medical community’s understanding, and it’s time for them to be removed,” said Levasseur.
With the Obama administration in its last year, officials are under pressure to finalize the health law’s nondiscrimination rule. The legislation itself is six years old.
Jocelyn Samuels, head of the HHS civil rights office, said in a statement that the agency is reviewing feedback on its proposal. “This is another example of this administration’s commitment to giving every American access to the health care they deserve,” she said.
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