Attorney defends transgender care exclusions in North Carolina

RALEIGH, NC (AP) — An attorney representing leaders of North Carolina’s state employee health plan defended the ban on gender-affirming treatments in a federal appeals court on Wednesday and faced a barrage of criticism from his chief justice.

State Treasurer Dale Folwell and chief administrator of the state health plan seek to overturn a court order Demands that the plan pay for “medically necessary services,” including hormone therapy and some surgeries, for transgender workers and their children. The judge had ruled in favor of the employees and their dependents, who in a 2019 lawsuit said they were denied coverage for gender-affirming care under the plan.

Attorney John Knepper told a three-person panel at the US Fourth Circuit Court of Appeals in Richmond, Virginia that the plan routinely excludes some medically necessary procedures based on cost, but does not make any of those determinations based on sex or sex.

“The plan failed,” said Knepper. “In this case, too, the state health plan fully covers all health risks. There are just some health risks it doesn’t cover.”

The plan, overseen by Folwell’s office, provides medical care to more than 750,000 teachers, government employees, retirees, lawmakers and their families. While it provides counseling for gender dysphoria and other diagnosed mental illnesses, it does not cover treatment “related to gender reassignment or modification and related caregiving.”

Chief Circuit Judge Roger Gregory said the exclusions unnecessarily singled out a protected class, despite Knepper’s repeated assertion that gender identity was not a factor.

“Why engage in transgender dysphoria” to balance the books asked Gregory, who was appointed on the hiatus by President Bill Clinton, who was later retried by President George W. Bush in 2001.

“The plan picks on everyone,” Knepper replied, noting that its outside administrators are unaware of a person’s gender identity or transgender status.

Also on the panel were Circuit Judge Albert Diaz, President Barack Obama’s choice, and Circuit Judge G. Steven Agee, President George W. Bush’s nominee for the court. There is no indication of when they will reign.

In accordance with a June federal court ruling that found the denial of coverage unconstitutional, Folwell and the State Health Plan Board of Trustees were forced to reinstate coverage last July of trans health procedures the plan once provided for a single year in 2017.

US District Judge Loretta Biggs ruled that the plan unlawfully discriminates against transgender people and violates both the Constitution’s equal protections clause and Title VII of the Civil Rights Act based on gender. Folwell called the verdict “legally incorrect” and appealed in August.

Tara Borelli, Lambda Legal’s senior counsel, asked the court to uphold the lower court’s ruling, arguing on behalf of state officials Wednesday that these exclusions amount to targeted discrimination. Lambda Legal and the Transgender Legal Defense & Education Fund filed the original lawsuit in March 2019 on behalf of trans workers.

Seventeen other states and Washington, DC, all of which cover gender-affirming treatments under their state employee health plans, submitted amicus briefs in support of North Carolina employees.

“What they’re asking of this court is to take down the legal pen and salvage that exclusion by rewriting it because the one they accepted and actually have to defend is so untenable,” Borelli said. “There is so clear discrimination based on gender and transgender status.”


Hannah Schoenbaum is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that brings journalists into local newsrooms to cover undercover topics.


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