LGBTQI+ People Are Underinsured and Experience Health Insurance Discrimination in Key Areas

As the Trump administration and congressional Republicans take aim at federal programs that provide crucial health care, data from the Center for American Progress’ 2024 LGBTQI+ Community Survey detail some progress in health care access. However, discrimination and barriers to equitable health care remain high. Worse, proposals from the current administration and Congress would undo much of the advancements made by gutting Medicaid, letting the Affordable Care Act’s (ACA) enhanced tax credits expire, and limiting coverage of transgender health care. These proposals would have devastating consequences for the lives and health of everyday Americans, but they would have an especially outsize impact on LGBTQI+ people.

In March 2025, the Trump administration issued a proposed rule that included provisions prohibiting ACA marketplace plans from covering gender-affirming care as an essential health benefit. Many marketplace plans already cover transgender health care to some extent, and this proposed rule—which has since been finalized—would cause states to either ignore transgender health care entirely or leave them responsible for defraying the costs of coverage. At the end of May, the Centers for Medicare and Medicaid Services (CMS) announced that it was investigating an “unspecified number of hospitals” over their provision of transgender health care for youth.

Additionally, during the final hours of the budget reconciliation process in the House, Republican lawmakers added prohibitions on transgender health care for youth and adults enrolled in Medicaid or the Children’s Health Insurance Program (CHIP). As of June 26, those prohibitions on transgender health care were included in a long list of provisions found to violate the Byrd rule and thus require 60 votes in the Senate.

Amid the backdrop of these restrictions and attacks that would have immediate impacts on LGBTQI+ people’s health and well-being, this column outlines the current status of insurance coverage for LGBTQI+ adults in the United States.

Discrimination in health care continues to be a problem despite improving coverage rates for LGBTQI+ people

LGBTQI+ people have historically had lower rates of insurance coverage than non-LGBTQI+ people. While the numbers are improving, there is still a significant gap between the two groups: In 2022, 86 percent of LGBTQI+ adults had health insurance, compared with 93 percent of non-LGBTQI+ people.

LGBTQI+ and non-LGBTQI+ people have employer-based coverage at the same rates. However, only 26 percent of transgender adults have such coverage through their own employer, compared with 37 percent of non-LGBTQI+ adults. Due to factors such as decreasing stigma and better protections against discrimination, people who are out as LGBTQI+ are more likely to be young and unmarried, which may be at least one reason for this gap in coverage. For example, by expanding dependents’ coverage through the age of 26, the ACA uniquely improved insurance coverage for young adults in same-sex couples. These numbers demonstrate that more LGBTQI+ people must rely on others to maintain insurance coverage.

Last year, transgender adults were enrolled in marketplace plans at the same rate as cisgender people (6 percent). Translated to real numbers, this means that at least 64,740 transgender adults had marketplace coverage in 2024.

According to CAP data, more than one-quarter of transgender people receive health insurance through Medicaid. Indeed, LGBTQI+ adults are statistically significantly more likely to be enrolled in Medicaid than non-LGBTQI+ adults, and LGBTQI+ households also rely on CHIP at statistically significant higher rates than non-LGBTQI+ households—7 percent versus 4 percent. The proposed coverage restrictions of the budget bill would limit access for 40 percent of transgender people who have insurance through federal programs or the ACA marketplace.

Discrimination by insurance providers also remains a significant problem for LGBTQI+ people. Recent surveys of health care providers in 2024 and 2023 show that insurance denials and coverage difficulties impede their ability to serve LGBTQI+ patients. In fact, CAP survey data show that 12 percent of transgender adults were denied insurance coverage for their hormone replacement therapy (HRT) prescriptions and 10 percent were denied coverage for gender-affirming surgeries.

The rising number of bans on reproductive and transgender health care is causing widespread harm. LGBTQI+ people are more likely to suffer care shortfalls due to reproductive bans, and the bans on transgender health are burdensome for patients and providers. Notably, 7 percent of transgender adults were denied insurance coverage due to recently passed state abortion bans. CAP data only capture the experiences of adults, but research shows that significant numbers of trans youth also cannot access the health care that they need.

Improved nondiscrimination policies—which are now under threat thanks to the Trump administration—and changes in the definition of infertility should have improved coverage rates for same-sex couples. But unfortunately, insurance denial numbers are not widely available, so patients and policy advocates are often left in the dark. According to CAP survey data, 4 percent of all LGBTQI+ adults were denied coverage in 2024 or faced burdensome requirements to receive coverage. Notably, denial rates are statistically significantly higher for LGBTQI+ adults of color compared with white LGBTQI+ adults: In 2024, 8 percent of LGBTQI+ adults of color were denied fertility preservation and 7 percent were denied fertility treatments—compared with 3 percent and 4 percent, respectively, for white LGBTQI+ adults.

The survey shows that LGBTQI+ adults still experience discrimination and denials at the doctors’ office. As CAP has previously reported, 8 percent of all LGBTQI+ adults experienced conversion therapy in the past year; and 17 percent did not feel comfortable sharing their identity with their provider. Additionally, almost 1 in 5 transgender adults had to educate their physicians and more than 1 in 10 LGBTQI+ adults had to educate their mental health providers.

Each year, LGBTQI+ adults also earn less than non-LGBTQI+ adults. For example, the income gap for transgender households in 2024 was 70 percent, with a resulting annual loss of $24,800. This income gap means that LGBTQI+ adults have less disposable income to pay for out-of-pocket health care expenses. And notably, CAP analysis found that House Republicans’ version of the budget bill would increase costs by thousands for individuals and families across coverage types. As LGBTQI+ people are more likely than their non-LGBTQI+ counterparts to earn lower incomes, they would be disproportionately harmed by these health care cuts.

Conclusion

Now that the prohibition on transgender health care for people enrolled in Medicaid and CHIP was ruled to violate the Byrd rule, policymakers have more options to address the insurance difficulties facing LGBTQI+ people. In order to address the looming threats, policymakers must tackle both high rates of discrimination and high health care costs—both of which disproportionately affect LGBTQI+ people.

Shield laws, which protect patients, families, and providers in various ways, are an option for policymakers to implement right now: 33 states do not have a shield law. Policymakers should also propose legislation to prevent discrimination on the basis of sexual orientation and gender identity in insurance coverage—which only 15 states and the District of Columbia currently do. At the same time, in order to manage the problem of costs, policymakers and advocates must continue to fight against all cuts to Medicaid and marketplace subsidies.

Over the past two decades, health care coverage for LGBTQI+ people has improved drastically, but ongoing attacks have the potential to reverse much of that progress and leave LGBTQI+ people without affordable, safe health care.