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Every State Can Implement Transgender-Inclusive Health Coverage

Every State Can Implement Transgender-Inclusive Health Coverage

A case study of the Oregon Insurance Division shows how statutes already on the books in every state give state policymakers the authority to end antitransgender discrimination in health insurance.

Transgender attorney Sara Schnorr, a partner at Edwards, Angell, Palmer & Dodge LLP, speaks at their offices in Boston, February 3, 2011. (AP/Elise Amendola)
Transgender attorney Sara Schnorr, a partner at Edwards, Angell, Palmer & Dodge LLP, speaks at their offices in Boston, February 3, 2011. (AP/Elise Amendola)

Transgender people have consistently been subject to health care coverage policies that arbitrarily cut off access to the care they need. State policymakers in Oregon, however, have recently stepped up to end this kind of discrimination.

It is no secret that pervasive bias and discrimination have pushed transgender Americans to the margins of society. Health insurance coverage has been no exception. While many people are able to rely on health insurance coverage to offset some of the costs of both routine and emergency health care, insurers have frequently relied on outdated assumptions about transgender people in order to justify categorical exclusions—limitations and exceptions to services offered under a health insurance plan— denying them coverage for medically necessary care, even when those services are provided to other people enrolled in the plan.

But recent motion toward coverage parity for transgender people at the state level shows that these barriers are not immovable. In fact, a close examination of the recent announcement by the Oregon Insurance Division that insurance companies doing business in Oregon must expand access to care for transgender people reveals that every state has the legal infrastructure to end antitransgender discrimination in health insurance—and that they can do it without passing a single new law.

There are three kinds of statutes already on the books in some combination in every state that give policymakers the authority to end antitransgender discrimination in insurance: public-accommodations laws, prohibitions on unfair trade practices in insurance, and grants of discretionary authority to insurance regulators. Let’s examine in further detail how state policymakers can use these statutes to end this discrimination.

Public-accommodations laws

The announcement from the Oregon Insurance Division primarily rested on the gender-identity antidiscrimination protections applicable to public accommodations—places or entities offering goods, services, or facilities to the public—under the Oregon Equality Act. The insurance division interprets insurance to be a “public accommodation” despite previous case law to the contrary because “any argument that insurance is not a public accommodation in view of recent developments in the industry … would probably fail.” Particularly because starting in 2014 individual and group insurers will no longer be able to reject applicants for coverage based on health status or other factors—meaning that insurance plans will be broadly open to the public—it has become increasingly clear that public-accommodations laws will cover insurance companies.

In Oregon, where the state public-accommodations antidiscrimination law includes gender identity-based protections, the insurance division articulates the clear application of the statute to health insurance:

Any health care services that are ordinarily or exclusively available to individuals of one sex may not be denied based on the perceived gender identity of a person when the denial or limitation is due only to the fact that the insured is enrolled as belonging to the other sex or has undergone, or is in the process of undergoing, gender transition.

This interpretation is portable to the majority of the 16 states and the District of Columbia that have gender identity-inclusive public-accommodations nondiscrimination laws.

But even in states that do not have specific gender-identity protections in their public-accommodations laws, this kind of statute can still support gender-identity nondiscrimination in insurance. Many states—from Alaska to Wyoming—include “sex” as a protected class in their public-accommodations laws. Recent interpretations by federal courts and executive agencies demonstrate an increasing understanding that sex-based protections cover transgender people through an interpretation of the term “sex” that includes gender identity and nonconformity with sex stereotypes.

It is clear that through public-accommodations statutes, policymakers in most states have the authority to prohibit discriminatory exclusions that target transgender people on the basis of their gender identity and sex. But two other types of laws lend further support to ending unfair and outdated limitations on coverage.

Prohibition on unfair trade practices in insurance

Importantly, the Oregon Insurance Division’s announcement was not based on the state’s inclusive public-accommodations law alone. In fact, it writes that, “Even if insurance as a public accommodation is disregarded, the division concludes insurance must abide by the nondiscrimination policy [of the Oregon Equality Act] for a second reason.” This second rationale can be found in insurance-specific statutes that do not mention gender identity or sex and further proves that all states can follow suit and protect transgender consumers from discrimination.

One of the statutes the insurance division pointed to is a provision of the Unfair Trade Practices Act—a piece of model legislation advanced by the National Association of Insurance Commissioners, which is the standard-setting and regulatory-support organization created and governed by the chief insurance regulators from all 50 states. The Unfair Trade Practices Act contains a broad provision that prohibits unfair discrimination between individuals of the same class and risk for premiums, fees, rates, benefits payable, and terms of a health insurance policy. This provision has been adopted in all but a handful of states.

As the Oregon regulators note, this statute is a broad prohibition on discrimination by insurers—including in benefits—that requires distinctions made by insurers to be “based on sound actuarial principles or related to actual or reasonably anticipated experience,” rather than based on arbitrary distinctions on the basis of race, sex, gender identity, or other factors. Under this simple statute, nearly every state in the United States has the authority to eliminate gender identity-based discrimination in insurance through a straightforward reading of its own laws.

Grants of discretionary authority to insurance regulators

The final takeaway from Oregon’s process for prohibiting antitransgender discrimination in insurance is that state insurance regulators are often given significant discretion to prohibit unfair insurance practices.

In Oregon, the director of the agency overseeing insurance regulation is permitted to reject plans that contain “provisions which are unjust, unfair or inequitable.” This kind of authority is also vested in insurance regulators across the country, in states including Alabama, Wisconsin, and South Carolina—just to name a few. State insurance regulators should use this discretionary authority to protect all consumers, regardless of their gender identities.


Insurance commissioners across the country have the statutory tools to prohibit arbitrary discrimination against transgender people in health insurance. The nondiscrimination victory in Oregon is worth celebrating not only because many transgender people across the state will have better access to the health care they need, but also because it proves that these kinds of protections do not have to be held captive in other states by political barriers, outdated opinions on medical science, or discriminatory stereotypes.

Every state can end discrimination against transgender people in health insurance. The time to act is now.

Andrew Cray is a Research Associate for LGBT Progress at the Center for American Progress.

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